Transcript HIGHER EDUCATION FUNDING IN INDIANA: THE ROLE OF THE INDIANA COMMISSION FOR HIGHER EDUCATION Trustees Academy A u g us t 3 0 , 2 01 0 Indiana Commission for H.

HIGHER EDUCATION
FUNDING IN
INDIANA: THE ROLE
OF THE INDIANA
COMMISSION FOR
HIGHER EDUCATION
Trustees
Academy
A u g us t 3 0 , 2 01 0
Indiana
Commission for
H i g h e r E d uc a t i o n
Contextual Information
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INDIANA’S PUBLIC
HIGHER EDUCATION SYSTEM
5 four-year Public Postsecondary
Institutions
2 two-year Public Institutions
31 Public Campuses and 12
Instructional Sites
407,000 Students in 2008-09
1,500 buildings worth $12B
$2.3B in salary and compensation
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Contextual Information
Total FY 10 estimated expenditures by all Indiana
public postsecondary institutions
$5,090,667,914
Total FY 10 General Fund estimated expenditures
by all Indiana public postsecondary institutions
$3,487,676,807
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2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
$1,400,000,000
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
1991-92
1990-91
1989-90
$600,000,000
1988-89
1987-88
1986-87
1985-86
1984-85
1983-84
1982-83
1981-82
1980-81
1979-80
1978-79
1977-78
1976-77
1975-76
STATE OPERATING APPROPRIATIONS TO
PUBLIC POSTSECONDARY INSTITUTIONS
state appropriations 1976 - 2011
$1,228,799,413
$1,200,000,000
$1,000,000,000
$800,000,000
Compound Annual Growth Rate: 4.7%
$400,000,000
$200,000,000
$-
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STATE GENERAL FUND EXPENDITURES BY FUNCTION
FY 2010
14%
Approximately $13 billion total
3%
5%
48%
5%
13%
K-12
Higher education
Medicaid
Teacher Pensions
Corrections
Child Welfare
Other
13%
Source: State Budget Agency (note: includes all Higher Educ. expenditures)
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Indiana Commission for Higher Education
Role in Developing the State Higher
Education Budget
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OVERVIEW OF THE STATE BUDGET PROCESS
 CHE and State Budget Agency issue budget instructions
to the public postsecondary institutions each biennium
 Institutions submit formal budget requests to the state
 CHE compiles and reports the institutional budget
requests
 CHE issues budget recommendations to Governor and
General Assembly
 Governor issues budget recommendations to General
Assembly
 CHE staff works with legislative staff during legislative
session to help craft the budget
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STATE APPROPRIATIONS TO HIGHER
EDUCATION FY 2009-2011
$ in millions
FY 2009
Campus Operating
Debt Service (fee replacement)
FY 2010 FY 2011 %Δ FY 09-11
$1,280 $1,232 $1,229
-4%
$177
$168
$194
10%
Line Items
$88
$70
$70
-21%
R&R
$31
$0
$0
-100%
SSACI
$249
$262
$269
8%
$1,826 $1,731 $1,761
-4%
TOTALS
Note: not all appropriations were released; some state appropriations were
replaced with federal stimulus funds
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CUMULATIVE CHANGE IN STATE APPROPRIATIONS
BY FUNCTION FY 00 – FY 11
159%
150%
125%
100%
69%
75%
50%
25%
23%
20%
0%
operating
debt service
line items
SSACI
R&R
-25%
-50%
-75%
-100%
-100%
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CHE FUNDING RECOMMENDATIONS
 Informed by Reaching Higher: Strategic Directions for Higher
Education in Indiana
 Recognizes that by law independent boards of trustees for
each public institution with responsibility for the soundness
of that institution
 Indiana needs a comprehensive, integrated and
complimentary system of higher education
 Focus areas of reaching Higher include:
 College Preparation
 Affordability
 College Completion
 Economic Development
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CHE RESPONSIBILITIES RELATED TO HIGHER
EDUCATION BUDGET
 Make recommendations for state appropriations to
higher education
 Institutional appropriations
 Capital projects and R&R
 State Student Financial Aid
 Non-Binding tuition targets
 Post budget responsibilities
 Review certain expenditures
 Review certain capital projects
 Make recommendations on budget reductions (when
necessary)
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CHE RECOMMENDATIONS FOR CAMPUS
OPERATING APPROPRIATIONS
Fungible dollars appropriated to the
institutions
Appropriations are made to individual
regional campuses; one appropriation to
ITCCI
Generated through (an evolving) collection of
formulae
Performance funding policies
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EVOLUTION OF CHE FUNDING
RECOMMENDATIONS
2001
2003
2005
2007
2009
Enrollment Change
Enrollment Change (credit Enrollment Change (credit Enrollment Change (credit Enrollment Change (credit (successfully completed
hours enrolled)
hours enrolled)
hours enrolled)
hours enrolled)
credit hours)
Inflation Adjustments
Inflation Adjustments
Inflation Adjustments
Inflation Adjustments
Equity Adjustment
Equity Adjustment
Equity Adjustment
Equity Adjustment
Plant Expansion/leases
Plant Expansion/leases
Research Support
Incentive
Research Support
Incentive
Change in number of
degrees
Change in On-Time
graduation Rate
Two Year Transfer
Incentive
Program Adjustment
Research Support
Incentive
Research Support
Incentive
Change in number of
degrees
Change in On-Time
graduation Rate
Two Year Transfer
Incentive
Low Income Degree
Completion Incentive
Workforce Development
Incentive (funding noncredit coursework)
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CAPITAL PROJECTS




Requested by institutions with no restrictions
Only exception is a formula to generate R&R appropriations
CHE makes capital project recommendations
Capital projects may be:
 State funded, requires General Assembly authorization
 Non-state funded, sometimes requires General Assembly
authorization
 Cash funded
 Authorized to issue debt – debt may or may not be repaid by the
state
 Includes projects:
 New construction
 Repair or renovation
 Infrastructure
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HISTORICAL CAP PROJECTS REQUESTS, CHE
RECOMMENDATIONS AND AS PASSED
$700,000,000
$600,000,000
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,000
$1995
1997
H.E. Requested
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1999
2001
2003
2005
CHE Recommended
Note: GA approvals have exceeded CHE recommendations by $930M
2007
2009
GA Approved
CHE REVIEW OF CAPITAL PROJECTS
 Certain capital projects require state review and approval
 CHE REVIEWS and makes recommendations on capital
projects that have been requested by the institutions
 Statutory review depends on many things, including:
 Type of project
 Total cost of the project
 Source of project funding
 After CHE recommendation, projects move to State
Budget Committee, State Budget Agency, Indiana
Finance Authority and Governor
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STUDENT FINANCIAL AID
 A very complex, but important issue to af fordability
 Financial aid comes from many sources, but chiefly:




Federal government
State appropriations (SSACI)
Institutional aid
Private foundations/owners/employers
 Financial Aid study jointly undertaken by CHE and SSACI to be
presented in September to State Budget Committee
 Aligning financial aid policy with state higher policy: particularly
college completion
 Recognizing the “new normal” student – majority of financial aid
applicants are “non-traditional students with different types of needs
and require a new approach to financial aid policy
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THE GENERAL ASSEMBLY MAKES FINAL
DETERMINATION
 CHE makes recommendations
 The Trustees by statute have virtually all of the decision
making power and responsibility for institutional budgets and
administration
 The General Assembly is always free to accept, modify or
reject the CHE recommendations
 CHE must work with institutional staf f, the legislature, other
parts of state government and other stakeholders
 CHE recommendations are almost never adopted to the dollar,
but the General Assembly has always passed higher education
budgets based on Commission recommended policies
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