2007-09 Higher Education Budget Recommendations Presented to: Ways and Means Committee January 30, 2007 1

HOW DOES INDIANA COMPARE?

2

Higher Education Appropriations per FTE by State, 2005 14,000 12,000 10,000 8,000 6,000 4,000 2,000 U.S.

Indiana

5,825 5,282

0 Wy om in Al g as ka Hawa Con ii cti cu New J M t ers as ey Nev sa ad ch a us ett New M s ex G ic o eo rg Nort ia h Ca rk ro lin Ill a in oi s Id ah Del o aware Te nn Rho se de e Is la nd Ka ns Wi sc as on si n M ai Ke ne ntu ck Ari y zo na Neb ra sk M is a Wa so sh uri in gto Cal Uni n ifo te rn ia d St ate M Pe ic s hi nn ga sy n lv M an in ia ne so ta Te xa s Uta In h di an a Io Lo So wa ui uth si an Ca a ro lin Vi a rg Al in ia ab O am kl a ah om Fl M a ori is da si ss ip pi O Ark So hi o an uth sa s Da ko M ta ary Nort la nd h Da ko O We ta re st go Vi n rg in M ia on ta na Col ora New Ha m do ps hi Ve re rm on 3 t Source: SHEEO SHEF,

State Higher Education Finance FY2005

.

60% 50% 40% 30% 20% 10% 90% 80%

77%

70% Net Tuition as a Percentage of Public Higher Education Total Educational Revenues by State, 2005 Indiana

50%

U.S.

37% 13%

0% Ve rm New Ha on m t ps hi Col re ora Del do aware M la O Pe nd re nn go sy n lv an M ia on Rho ta de na Is la M So nd ic hi uth ga n Da ko In ta di an a O hi o Io So Al wa ab uth am Ca a ro lin Vi We a rg st in Vi ia rg in ia M M ai in ne ne Nort so ta h Da New J ko ta M ers Te nn as ey es sa se ch e us Con ett ne s cti M cu is M t so is si uri ss ip pi Ka ns Ark as an sa Ke s ntu Wi ck sc Uni y on te si n d St ate Ari s zo na Neb ra sk a O Uta kl h ah om a New Yo rk Te xa Ill s in Lo oi ui s si an Nort Fl a ori da h Ca Wa ro lin sh in a gto Al n as ka Id ah o Nev ad a Hawa Cal ii ifo rn G ia eo rg Wy ia om in New M g ex ic o 4 Source: SHEEO SHEF,

State Higher Education Finance FY2005

.

Total Educational Revenues per FTE for Public Institutions by State, 2005 $16,000 Indiana $14,000 U.S.

$12,000 $10,585 $10,000 $9,196 $8,000 $6,000 $4,000 $2,000 $ Fl ori Cal da ifo Lo rn ui ia O si an kl a ah om Ark Nort a an sa s h Da Wa ko sh We ta in st gto Vi M n rg is in si ia ss ip Col pi ora do Te xa s Uta M on h ta na New M ex ic o Id ah G Uni o eo te rg ia ate Neb Source: SHEEO SHEF,

State Higher Education Finance FY2005

.

s ra sk So Ari a uth zo na Da ko ta O hi O o re go Vi n rg Al in Nort ia ab am h Ca a ro lin Ill a in Ke oi s ntu Wi ck sc y on M si is n New Ha so m uri ps uth hi Ca re ro lin Ka a M ns in as ne so ta Nev ad ary a la nd Io wa In di Te an nn a es se e New Yo rk M ai M Pe ic ne hi nn ga sy n lv an Rho ia de as Is sa ii la ch nd us ett Ve s rm Wy on t om in New J g ers Del ey Al Con as ka ne cti cu t 5

Change in State and Family Share of Education Expenditures FY1995 to FY2005 100% 40% 30% 20% 10% 90% 80% 70% 60% 50%

Tuition & Fees 40.6% 40.7% 40.9% 41.4% 41.6% 42.4% 43.3% 2.2% 2.5% SSACI Aid 2.7% 2.7% 57.2% State Operating Appropriations 56.8% 56.4% 55.9% 3.0% 2.9% 3.0% 45.4% 48.1% 49.5% 50.1% 3.4% 55.3% 54.7% 53.7% 51.2% 3.7% 4.1% 48.1% 46.3% 4.0% 45.9%

0% 1994-95 1995-96 1996-97 Source: Indiana Commission for Higher Education.

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 6

Compare State Revenue Growth with Higher Education Appropriations FY00 – FY 07 revenue growth higher education approps 13.4% 8.8% 2.9% 4.5% 0.0% 7.5% 0.7% 7.5% 3.6% 5.5% 2.0% 2.5% 2.8% -3.0% -3.8% -0.2% 7 Note: FY 07 estimated

6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Compare Revenue Projections to CHE Higher Education Institutional Funding Recommendation Revenue Projection CHE Recommendation 4.2% 5.0% 4.5% 5.0% FY 08 FY 09 Note: FY 08 and FY 09 from December 14, 2006 revenue projections 8

Commission for Higher Education Responsibilities and Funding Priorities

• Debt Service • Research • Enrollment • Degree Completion • Operating Support • Repair and Rehabilitation • SSACI 9

Growth in Debt Service

Debt Service as a Percentage of Debt Service and Operating

14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Note: includes debt service in FY 09 for CHE recommended new capital projects 10

Debt Service Growth

Operating Debt Service FY 1980 FY 1985 FY 1990 FY 1995 FY 2000 FY 2005 FY 2007 FY 2009 Avg. Annual % Incr. 1980 to 2009 Total % Increase 1980 to 2009 $335.6

$497.3

$743.3

$824.6

$1,025.4

$1,176.1

$1,185.3

$1,220.0

4.4% 237% $17.0

$34.5

$64.0

$79.4

$104.8

$110.2

$131.2

$169.8

7.3% 620% DS as % of Oper. + DS 4.8% 6.5% 7.9% 8.8% 9.3% 8.6% 10.0% 11.8%

Research Funding

Total institutional research & development expenditures per capita for Indiana, US and Selected States

160 $146.2

$138.3

$135.1

$134.3

140 $115.1

120 $102.4

$102.9

100 80 60 $56.9

40 $43.5

$57.4

$42.6

$67.3

$65.3

$25.8

20 0 Michigan Indiana Illinois Ohio Minnesota Kentucky Nation 1990 2004

12 Source: National Center for Higher Education Management Systems (using National Science Foundation; U.S. Census Bureau).

Research Funding Incentive

• Matches University Expenditures on Research Expenditure Growth $.50 per $1 • Matches Federal, Industry and Competitively Awarded Private Foundation Research Grants • Includes IUB, PUWL & IUPUI Health 13

College-going Rate

Percent of high school graduates enrolled the next fall in higher education

50.5% 54.3% 55.0% 57.1% 58.0% 58.6% 60.5% 57.3% 60.0% 56.5% 62.0% 56.7% 62.0% 55.5% 1992 Ranked 34th 1994 1996 1998 Indiana 2000 Nation 2002 2004 Ranked 10th

Source: Mortenson, T. Postsecondary Education Opportunity, Oskaloosa, Iowa. (Note: Technical corrections were made to three states: Indiana, Kentucky, and Utah in the 2004 data and are reflected in the chart).

14

Adult Participation in Postsecondary Education for Indiana and Selected States

California Alaska Maryland Hawaii Illinois Washington Virginia Michigan U.S.

Florida Oklahoma

5.6% 5.4% 5.2% 4.8% 4.8% 4.7% 4.6% 4.4% 4.2% 4.0% 6.4%

Indiana 0.0% 1.0% 2.0% 3.0%

3.6%

4.0% 5.0% 6.0% 7.0% Source: U.S. Census Bureau, Decennial Census, 2000.

15

Progress Toward 10-Year Enrollment Goal Current: 29,636 More Students

30,000 25,000 20,000 15,000

Goal: 30,000 More Students

10,000 5,000 0 2000 2001 2002 2003 Source: Indiana Commission for Higher Education, Student Information System.

2004 2005 2006 2007 2008 2009 16

400,000

Fall Headcount Enrollment in Indiana Postsecondary Institutions

350,000

Total 346,378

300,000 250,000 200,000 150,000 100,000 50,000 0

Public 266,790 Private* 79,588

17 Source: Annual Editions of Report of Enrollment in Indiana Colleges and Universities, prepared for the Indiana Association of Collegiate Registrars and Admissions Officers. Independent Colleges of Indiana. Commission for Higher Education Student Information System. *Awaiting update

Percent of first-time full-time degree-seeking students earning a baccalaureate degree for Indiana’s public colleges, 2004

College/University

Indiana University Bloomington Purdue University West Lafayette Ball State University Indiana State University University of Southern Indiana Indiana University East Indiana University Kokomo Indiana University Northwest Indiana University South Bend Indiana University Southeast IUPUI Purdue University Calumet Purdue University North Central IPFW

4-Year Grad Rate

41% 31% 26% 19% 13% 4% 8% 7% 5% 4% 5% 4% 1% 3%

6-Year Grad Rate

71% 64% 52% 40% 32% 19% 23% 24% 21% 26% 22% 22% 11% 19% NOTE: Graduation rates calculated using the national GRS formula for first-time full-time degree seeking students.

Source: The Education Trust, College Results Online, Databank/Reporting Tool using data collected by the U.S. Department of Education’s National Center for Education Statistics (NCES) through the IPED Graduation Rate Survey.

18

Percent of first-time full-time degree-seeking students earning an associate degree for Indiana’s public community colleges, 2004

College/University

Ivy Tech Community College of Indiana Vincennes University

2-Year Grad Rate

4% 11%

3-Year Grad Rate

18% 19% NOTE: Graduation rates calculated using the national GRS formula for first-time full-time degree seeking students.

Source: For 3-year grad rate, Ivy Tech’s data gathered from reports on the IPEDS Graduation Rate Survey published by the Office of Institutional Research at ITCCI. For 3-year grad rate, Vincennes data gathered from U.S. Department of Education’s National Center for Education Statistics (NCES) through the IPED Graduation Rate Survey Peer Analysis System. For 2-year grad rate, data gathered from the CHE SIS system.

19

Six-Year Graduation Rates Relative to Peer Groups

Range of Peer Groups

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

20 Source: National Center for Higher Education Management Systems (IPEDS Graduation Rate Survey, 2003)

60%

Six and Three Year Degree-Completion Rates in Indiana Postsecondary Education by Race and Degree

56% 50% 40% 47% 33% 35% 30% 30% 26% 20% 10% 0% All Students African American Associate Degree Hispanic Baccalaureate Degree Source: National Center for Education Statistics, 2003 IPEDS Graduation Rate Survey 21

New Incentives • Degree Growth Incentive • Time to Degree Incentive • Transfer Incentive

22

Degree Growth Incentive

• Change in number of degrees conferred • Includes all resident students regardless of entry (first time, transfer, continuing) or status type (part-time, full time) • This is a simple calculation that measures change in the number of degrees conferred over a specified period of time and multiplied by $3,500 for Associates Degree and $4,000 for Baccalaureate Degree (increase only) • Appropriation is the greater of Change in Degree funding

or

Enrollment Change funding 23

On-Time Completion Incentive

• Change in On-Time Degree Completion Rate (4yr. And 2yr.) • Includes all full-time, degree-seeking resident students • Measures change in the graduate rate of cohorts • Uses the Graduation Rate Survey national methodology and compares rates measured over a specified period of time • Appropriation is most recent cohort graduation rate minus previous cohort graduation rate: pays $5,000 for increase in bachelor degrees and $2,500 for associate degrees 24

Transfer Incentive

• Provides funding to two-year colleges for students that successfully transfer to public four-year institutions • Appropriation is the greater of Transfer Incentive funding

or

Enrollment Change funding 25

Operating Support

• Funds Campus Operating 1.4% FY 08 and 2.0% in FY 09* • Funds Line Items 3.0% in FY 08 and 3.0% in FY 09 Note: Institutional operating increases 3.1% and 4.7% 26

History of R&R 2000-2007

Formula Total Appropriated Total R&R Distributed 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 FY 07 estimated 0 1999-01 2001-03 2003-05 2005-07 27

CHE SSACI Recommendation

• Higher Education Award and Freedom of Choice Award funded to keep caps flat in FY 08 and increase caps 3% in FY 09 • Fully funds 21 st Century Scholars Awards • Fully funds fee remission programs for veterans, National Guard and public safety officers • Other SSACI programs flat or small inflationary increases • Total SSACI Increases of 7.2% (FY 08) and 4.3% (FY 09) 28

CHE 2007-09 HIGHER EDUCATION BUDGET RECOMMENDATIONS

29

Base Appropriation Increases

(includes SSACI) FY 07 FY 08 Appropriation $1.613 billion $1.699 billion FY 09 $1.783 billion Does not include payment delay repayment $62M % chg.

5.3% 4.9% 30

Base Appropriation Increases

(excludes SSACI) FY 07 FY 08 Appropriation $1.396 billion $1.465 billion FY 09 $1.539 billion Does not include payment delay repayment $62M % chg.

5.0% 5.0% 31

Capital Appropriation Increases

Appropriation % chg.

FY 07 FY 08 $157 million $188 million 20.0% FY 09* $201 million 7.1% * Includes first year of debt service for CHE recommended capital projects 32

Capital Appropriation Increases ($ millions)

Debt Service R&R

TOTAL

FY 08 FY 09* $25.9

$13.3

$5.4

$0.0

$31.3

$13.3

* Includes first year of debt service for CHE recommended capital projects 33

Existing and New Debt Service Increases IU Totals PU Totals ISU Totals USI Totals BSU Totals VU Totals ITCCI Totals

Total: 2008

9.0% 13.8% 30.0% 60.8% 14.8% 38.9% 58.1%

19.7% 2009*

5.3% 14.0% 0.2% 23.4% -1.7% 18.8% 11.3%

8.1%

* Includes first year of debt service for CHE recommended capital projects 34

Debt Service as a share of New Appropriations*

DEBT SERVICE 19% 40% 60% 81% FY 08 FY 09 * Includes first year of debt service for CHE recommended capital projects FY 09 35

Institutional Operating Appropriation Increases

(excludes SSACI) Appropriation % chg.

FY 07 FY 08 FY 09 $1.239 billion $1.277 billion $1.337 billion 3.1% 4.7% 36

Operating Appropriation Increases Over FY 07 Base

($ millions)

2008 2009

Research Support Incentive* Enrollment Change Incentive* Change In Degrees Incentive** $10.2

$6.6

$0.0

$20.4

$13.2

$6.7

On-Time Degree Completion Incentive** Two-year campus Transfer Incentive** Campus Operating Support (1.4% / 2.0%) Line Item Operating Support (3.0% / 3.0%) New Academic Programs Other Plant Expansion

TOTAL

$0.0

$0.0

$16.8

$1.2

$2.0

$1.4

$0.0

$38.3

$3.4

$0.5

$40.9

$2.7

$9.3

$1.0

$0.0

$98.7

37 * Funded 50% in FY 08 and 100% in FY 09; ** Funded 100% in FY 09

New Academic Programs Increases Over FY 07 Base

IUPUI – Columbus (a) PU Statewide Technology and TAP Programs (a)(b) Fast Track to College

2008

$.9M

$.1M

$1.0M

2009

$1.9M

$1.7M

$4.8M

BSU Entrepreneurial Prog.

$0.0M

$1.0M

Total:

Notes:

$2.0M

(a) Funds new programs related to Cummins expansion

$9.3M

(b) Roll-out of statewide programs 38

Institution Operating Appropriations

IU Totals PU Totals ISU Totals USI Totals BSU Totals VU Totals ITCCI Totals

Total % chg

2.7% 3.1% 1.3% 2.7% 1.4% 1.4% 5.8%

2.9% 2008

$470.6M

$324.2M

$74.9M

$36.2M

$124.7M

$36.9M

$152.4M

$1,220M % chg

4.1%

2009

$489.8M

4.6% $339.2M

2.6% 4.9% $76.9M

$37.9M

4.2% $128.9M

4.4% $38.5M

6.0% $161.6M

4.4% $1,271M

39

R&R Base Appropriations Funds 50% of 2007-09 R&R Formula

IU Totals PU Totals ISU Totals USI Totals BSU Totals VU Totals ITCCI Totals

Total % change over FY07 2008

$12.6M

$9.9M

$2.3M

$.6M

$3.4M

$1.1M

$1.1M

$31.0M

21.1% 2009

$12.6M

$9.9M

$2.3M

$.6M

$3.4M

$1.1M

$1.1M

$31.0M

40

Payment Delay Repayment

(Does Not Go Into Base) IU Totals PU Totals ISU Totals USI Totals BSU Totals VU Totals ITCCI Totals

Total 2008

$12.2M

$8.6M

$2.2M

$.8M

$3.3M

$.9M

$3.1M

$31M 2009

$12.2M

$8.6M

$2.2M

$.8M

$3.3M

$.9M

$3.1M

$31M

CHE recommends these payments be used for R&R 41

CHE 2007-09 SSACI Budget Recommendations

FY 2007 Higher Education Awards* Freedom of Choice Awards* $120,674,940 $46,035,799 FY 2008 6.2% $128,125,919 6.9% $136,917,883 0.0% $46,035,799 1.3% FY 2009 $46,640,885 21st Century Scholar Program Awards Statutory Fee Remissions $19,171,429 33.3% $18,148,108 10.5% $25,546,085 1.0% $25,811,511 $20,055,513 0.5% $20,150,884 * Funds cap increases of 0% in FY 2008 and 3% in FY 2009 42

CHE 2007-09 SSACI Budget Recommendations

SSACI Hoosier Scholar Awards SSACI Minority Teacher Scholarship SSACI College Work Study SSACI Grant Administration SSACI Southeast Indiana Contract for Space SSACI 21st Century Scholar Program Administration SSACI Part-time Student Grant Program SSACI Nursing Scholarships SSACI National Guard Supplemental Grant FY 2007 400,000 399,768 805,189 1,240,723 603,407 0.0% 0.0% 0.0% 3.2% 0.0% FY 2008 400,000 399,768 805,189 1,280,998 603,407 0.0% 0.0% 0.0% 0.0% 0.0% FY 2009 400,000 399,768 805,189 1,280,998 603,407 2,000,000 5,250,000 402,142 3,299,821 1.1% 2,021,000 0.0% 5,250,000 0.0% 0.0% 402,142 3,299,821 0.0% 2,021,000 0.0% 5,250,000 0.0% 0.0% 402,142 3,299,821 43

Recommended New Capital Projects

PUWL Boiler #6 VU Electrical Infrastructure/Substation Phase II USI College of Business/General Classroom Building IUB Cyber Infrastructure Buildings IUPUI Neurosciences Research Building ITCCI Fort Wayne Technology Center & Demolition Costs PUNC Student Services & Rec. Center A&E ITCCI Logansport Building

TOTAL RECOMMENDED STATE FUNDING

$53,000,000 $2,000,000 $24,900,000 $18,300,000 $20,000,000 $26,700,000 $1,000,000 $10,500,000

$156,400,000

RECOMMENDED FOR AUTHORITY ONLY PUWL Mechanical Engineering Addition $33,000,000 44