Transcript Tuition Policy Advisory Committee Meeting September 2, 2003 Committee Meeting #1 Today’s Agenda President’s Welcome Procedural Issues Background Information – recent history – university finances… – next year’s budget –

Tuition Policy Advisory
Committee Meeting
September 2, 2003
Committee Meeting #1
Today’s Agenda
President’s Welcome
Procedural Issues
Background Information
– recent history
– university finances…
– next year’s budget
– tuition & fees
Welcome and Thank You
for Agreeing to Serve!
Procedural Issues
Working Timeline
Week Beginning 2
Recommended Working Timeline:
TPC Meeting Sessions
TPC Public Hearing
Tuition Policy Committee presents recommendation to President
Public Hearings / Comment Period (2 Hearings)
President develops final Regental recommendation
Submission date for Chancellor / Regent's Materials
Chancellor Tuition Policy Deliberations
Regents Tuition Meeting - 11/18
September
8 15 22 29
October
6 13 20 27
November
3 10 17 24
Recent History
Recent History
Aging infrastructure confirmed by third party studies –
conclusion: Under funding R&R $20M per year
Infrastructure fee proposed but rendered impractical by
AG ruling
Legislative solutions sought with limited success
UBC focused on $40M recurring shortfall for the FY03/04
fiscal year:
$ 5M Aggressive cost savings measures
$25M General budget reductions undertaken
$10M R&R budget reduced to cover final legislative “dings”
Legislative Session Outcome
Positives
Negatives
• 100% IDC Retention
+$20M
• Tuition Flexibility
• Continued downward trend
in State financial support
 GR reduction ($22M)
 P/T Benefits
($6M)
 90 Day Wait
($2M)
 TX Tomorrow ($3M)
$20M
-$33M
 B-on-Time
($?M)
 Higher tuition set asides
Budget issues to Deal with
$30M annual shortfall in R&R funding
– $20M annual coming into the year
– $10M reduction to balance the Fy03/04
budget
$15M recurring shortfall in competitive
compensation funding
University Finances
University Finances
FY03/04 Total University Budget $1.44B
Educational
& General
Component
59%
$846.7M
+ 6.8%
Total University
Budget
$1.44B
+ 4.7%
or $63M
Endowment
Component
9%
$129.1M
– 1.0%
Research
Component
Auxiliary
Component
20%
12%
$292.2M
+ 12.6%
$176.6M
+ 2.2%
University Finances
How does State General Revenue fit into the Picture?
(in millions)
30 Years
1972/73
State GR Funding
$
Total Budget
$ 119.9 $ 360.6 $ 726.9 $ 1,444.6
Percent State Funding
20 Years
1982/83
10 Years
1992/93
57.9 $ 168.8 $ 207.7 $
48.3%
adjusted for expense shift ===>
46.8%
28.6%
Today
2003/04
291.8
20.2%
19.4%
The Permanent University Fund (PUF)
Why isn’t it enough?
PUF Lands ==> 02’ Market Value $6.7B
<== return on investment
Available University Fund
2/3 UT System
1/3 A&M System
System Costs
PUF Bonds
UT Austin
UT Austin
Fy03/04 $109.4M
UT Austin receives about 30% of the
total distributed income from the PUF
Next Year’s Budget
Budget Accomplishments
For our State
• Improved research competitiveness
For our Students
• Additional faculty positions
• Increased tuition & scholarship support
• Capacity to invest in specific programmatic initiatives
For our Employees
• Preservation of a competitive benefit program
• Possibility of mid-year salary program
It was a challenge to balance the
budget!
Efficiency Improvements
• $5M from Office Supplies & Credit Card
changes…more to come
Across-the-board Budget Reductions
• $25M total reductions…$4M from occupied
positions
Reduced Infrastructure Funding
• $10M reduction in an area already under
funded!
What are our Continuing
Challenges?
Infrastructure Funding - $30M
annual shortfall
Facility Aging Drives Repair & Renovation (R&R)
Requirements
There is a significant bubble of R&R requirements in the near
future.
4,000,000
3,500,000
Gross Square Footage
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
1910
1920
1930
1940
1950
1960
1970
1980
1990
Construction Decade
A substantial portion of the University’s Plant, those projects built in the 50’s
through 80’s, is approaching 30-60 years old and will require substantial repair
and renovation.
Why is a Near Term Infrastructure Solution
Needed – Why can’t this wait?
• Campus & Building Safety
• Cost
• Usability / Habitability
• Continuity of Plant Operations
What are our Continuing
Challenges?
Competitive Compensation Program
Funding - $15M recurring
Tuition & Fees
Appropriation & Tuition and Fees Collected per FTE
1999/00
UT vs. Peer Institutions
Approp.
$25K
$23,306
$22,503
AUF (income from the PUF)
T&F
$21,573
$20K
$16,868
$15,224
$15K
$13,265
$10K
$5K
$0K
Michigan
UC Berkeley
UCLA
Wisconsin
Illinois
UT Austin
Competitive Position – Tuition & Mandatory Fees
UT vs. Other Institutions
(2002 Data)
$35,000
$30,000
$29,256
$28,206
$29,060
$29,600
$27,612
$27,549
$27,230
$28,400
$25,000
$23,289
$19,990
$20,000
$17,961
$15,000
$10,490
Tuition
In-State Tuition
$10,000
$7,411
Out-of-State Tuition
Avg. 4-Year Private
Avg. 4-Year Public Out-of-State
$5,000
$3,950
Avg. 4-Year Public In-State
$4,780
$0
Co lumbia
Dartmo uth
Harvard
M IT
No tre Dame
P rinceto n
Rice
Stanfo rd
Yale
Source: Morgan Stanley, based on information from the College Board and the Chronicle of Higher Education..
M ichigan
(A nn A rbo r)
Texas
(A ustin)
Virginia
A Rule of Thumb for Planning
Every dollar increase in tuition
generates about $1M of net
revenue, after set-asides, for the
University on an annual basis.
Therefore, a student taking 28 SCH
annually would pay $28 more in
tuition per year for each $1
increase in tuition.
Next Steps
The Challenge Summary
Infrastructure Funding - $30M annual
Compensation Program Funding - $15M
recurring
Possible Near Term Solutions
• Reduce expenses elsewhere and reinvest in
R&R
• Just completed exhaustive effort
• Impossible to not impact people
• Reduce / eliminate January compensation
program
• Increases competitive issues
• Not a long-term fix
• Increase tuition
Thank You