House Appropriations Committee Louisiana Board of Regents March 31, 2011

Louisiana Public Postsecondary Education Board of Regents LOUIS LONI Southern System SU A&M SU Law Center SU Ag. Research Ctr. SU - New Orleans SU - Shreveport LSU System LSU A&M UNO LSU - Shreveport LSU - Alexandria LSU - Eunice LSU - Law Center LSU - Ag. Center LSUHSC-NO LSUHSC-Shreveport Pennington U of LA System Grambling LA Tech McNeese Nicholls Northwestern Southeastern U of L - Lafayette U of L - Monroe LCTCS Baton Rouge CC Bossier Parish CC Delgado CC Nunez CC River Parishes CC South LA CC LA Delta CC Fletcher Technical CC SOWELA Technical CC 7 Regional Technical Colleges Proprietary Schools LUMCON Learning Centers LOSFA 2 2

Annual Enrollment for Public Institutions

Certificates and Degrees Awarded 28% - Diplomas 24% Associate Degrees 6% Baccalaureate Degrees -10% Master Degrees 11% Doctoral Degrees

Three Main Goals Board of Regents Focus To increase the education attainment of its citizens; To invest strategically in university research; and To become a more efficient and accountable enterprise.

State/Student Share

Constitutional Authority Board of Regents: (Article VIII, Section 5 [D][4]) The Board of Regents is required by the Louisiana Constitution to develop a funding formula as a component of the Master Plan for Public Postsecondary Education: “At a minimum, the plan shall include a formula for equitable distribution of funds to the institutions of postsecondary education.” Management Boards: (Article VIII, Section 12) Appropriations for the institutions of higher education shall be made to their managing boards.  The funds appropriated shall be administered by the managing boards and used solely as provided by law.

Formula Implementation

History of Development of Formula Act 1465 of 1997 set performance-based budgeting requirements Core objectives: total enrollment, minority enrollment, retention (campus and statewide) and graduation rates 2007 Formula Workgroup recommendation Core objectives: focus existing and new dollars on performance and results, make the formula more sensitive to missions of institutions, make cost metric values in the formula analysis more precise and current 2011 Proposed Formula Core objectives: align with GRAD Act; set two-year and four-year institutions equidistant from their respective peer groups; end of course counts will be used to drive cost calculations; hold harmless metric to establish maximum annual funding loss

Formula Implementation Rates ** Includes ARRA Funds (area shaded in red shows impact of ARRA funds)

Total State Funds for All Formula Institutions Four-Year Institutions Two-Year Institutions* Total State Funds for All Formula Institutions Cost Calculation Performance Cost Calculation Performance *Includes all 2-year institutions

85% Distribution Based on Cost Calculation Funding Formula 85% Distribution Based on Cost Calculation Student Credit Hours funded based on SREB peer faculty costs comparisons by discipline Funds on End of Course instead of 14th class day except for the technical colleges Follows best practices trends of other states Responds to the Postsecondary Education Review Commission (PERC)

25% for Performance: Funding Formula 15% SGF 10% Tuition Authority Performance funds retained through successful GRAD Act performance Standardizes definition of performance Tracked on one set of agreed upon Student Success Metrics

Path Forward Funding Formula Adopt legislative recommendation for phase-in of the funding formula so that campuses can manage funding shifts Sustain formula for multi-years to allow performance to take root Adopt process to address loss of performance funding (10 percent tuition and performance dollars) and rehabilitation plan requirements as a result of failed GRAD Act performance Review future need to increase and expand GRAD Act performance measures Adopt statewide implementation of End of Course measure

FY 2011-12 Executive Budget 15

Total Change Existing Budget FY 2010-11 to FY 2011-12 Executive Budget Total Change Existing Budget FY 2010-11 to FY 2011-12 Annualize FY 2010-11 Mid-year Expenditure Reduction (34.7) Net Adjustments to Hospitals (UCC, UPL, etc.) 19.0 Increase to TOPS 39.2 Decrease 8G Support Fund Budget (Based on REC) (6.2) Annualize FY 2010-11 GRAD Act Revenues 44.5 Full Time Tuition for 12 to 15 hours 74.5 Operational Fee 13.0 LCTCS Stabilization Fee 10.7 Total 160.0

ARRA Funds Substitution Executive Budget ARRA Funds Substitution Remove ARRA from State Funds (189.4) Revenue from FY 2011-12 3-4-5 Tuition Increase 37.4 Revenue from FY 2011-12 GRAD Act Tuition Increase 53.3 Increase HIEF Statutory Dedication (Self Generated Carry Forward) 97.2 Orleans Parish Fund to Delgado 1.5 Total -

Adding $1.29B transfer of all State General Funds to Board of Regents. Executive Budget 2011-12 Executive Budget Adding $1.29B transfer of all State General Funds to Board of Regents.

2011-12 Executive Budget Executive Budget Annualization of FY 10-11 Mid-Year expenditure reduction. This reduction is being allocated across the total State General Funds base.

2011-12 Executive Budget Executive Budget Multi-step process for addressing loss of American Recovery and Reinvestment Act of 2009 (ARRA). Means of financing substitution: replacing ARRA with state general funds.

2011-12 Executive Budget Executive Budget This reduction is being allocated across the total State General Funds base of all institutions that received ARRA funds in FY 09 and FY 10.

2011-12 Executive Budget Executive Budget Higher education’s funding level reflects $97.2 million in tuition funding freed up and carried forward from FY 2010-2011. These funds will be allocated back to the campuses that generated the tuition revenue being carried forward.

2011-12 Executive Budget Executive Budget Budgeted Projected Self Generated Increases FY 11-12 3-4-5 $37.4m FY 11-12 GRAD Act $53.3m *Tuition Cap 12 to 15 hours $74.5m *Operational Fee Index Change $13.1m *LCTCS Stabilization $10.7m Annualization of FY 10-11 GRAD Act $46.6m *Subject to legislative approval

Executive Budget 2011-12 Formula Funding Base

2011-12 Preliminary Formula Funding Distribution Model Executive Budget 2011-12 Preliminary Formula Funding Distribution Model

HB 1 Postsecondary Education TO FY 11-12 27,703 (TO) Difference 6004 Non SGF Funded Positions + 862 Vacancies

Goal: Baseline: Overall Decline: 5% annual personnel reduction ACT 1000 Goal: 5% annual personnel reduction Baseline: FY 07-08 Overall Decline: 6.17% FY 08-FY 11

Average Salaries of Full-Time Instructional Staff

GRAD Act

GRAD ACT 35 participating institutions Annual Review process underway Management Boards (April) Regents Annual Review (May-June)

Performance Objectives GRAD Act Performance Objectives Student Success Increase graduation rates, completers, and partner with high schools Articulation and Transfer Increase student retention Workforce and Economic Development Alignment with workforce needs Institutional Efficiency and Accountability Align program needs regionally and by demand