1 The FY 2006 Budget Request and Future Impacts Strategic Planning Study Session January 20, 2005

2 FY 2005 Budget $1.79 Billion Campus BudgetsBudget by Fund Type

3 NOTE: The FY 2005 numbers are based on approved budgets. Total Budget--$1,790 M Educational Budget $696 M

4 Breakdown of CU’s Budget--FY 2005 Unrestricted (Educational) Revenues:  State general fund, tuition, student fees, indirect cost recoveries (ICR), and other miscellaneous revenues This $668 million goes directly to support academic programs, salaries, and general operating costs across the University’s four campuses $668M Restricted and Designated Revenues:  Federal grants, contracts and gifts: ($571 million) These funds are not available for the University’s instructional programs or general operating costs and are restricted for CU faculty research projects  Self-funded entities revenues: ($551 million) (e.g., Athletics and Housing) Self-funded entities may have either federal, State statutory, and/or bond restrictions on the use of (surplus) revenues, in addition to operating within their own revenue stream. Therefore, these funds are not available for University instruction or general operating costs. $1,122M CU System (four campuses) total operating budget $1.79 B

5 Campus Sources for the Educational Budget-FY 2005

6 Revenues for Residents vs. Peers Avg. $7,329 $16,209 $7,201 $7,306 $9,806 $11,340 CU’s Revenues from Resident Students Versus Peer Averages?

7 If CU was at Peer Average, How Much Additional Revenue Would it Generate? Calculation: Peer Avg. – CU = Variance Variance * Resident FTE =Revenue shortfall UCB: $16,209 (without UCB) - $7,329 = $8,880 $8,880 * 18,177 = $161 M UCCS: $ $7,201 = $2,605 $2,605 * 5,844 = $15 M UCD: $11,340 - $7,306 = $4,034 $4,034 * 8,268 = $33 M Total of $209 M (without HSC)

8 Impact for CU: Rely on Other Resources Loss of State support has exacerbated the need for CU to pursue other revenue streams Non-State revenue sources to support the education of Colorado resident students: Non-Resident Tuition Additional Student Fees Indirect Cost Recoveries Gifts & Endowment Income Entrepreneurial Income Challenge with Non-State revenues Declining and shifting markets Already pledged for designated uses

9 Program Investments Compliance and Fiduciary Sustain and Enhance Existing and Emerging Programs Faculty Compensation—Salary and Benefits Recruitment & Retention New lines Students Financial Aid Programming inside and outside of the classroom Facilities Deferred Maintenance Information Technology Equipment & Utilities Research Infrastructure Impact for CU: Lack of Educational Investments

10 FY 2006 Budget: Request Recap Generate $49 M of additional revenues for the Educational Budget. Revenues can come from a combination of general funds, tuition or fees. These revenues will cover educational expenses such as: Faculty and staff compensation, financial aid, utilities, insurance, investments in information technology and other costs associated with unfunded enrollments.

11 FY 2006 Budget: Impact on Tuition Principles for Adjustments in Tuition Rates: Tuition increase will be determined by the amount of additional general fund revenue available Tuition structures will change in order align with the implementation of the College Opportunity Fund Colorado residents who are Pell eligible will experience net tuition increases no greater than 5.4%. Campuses will allocate more than 20% of the additional undergraduate resident tuition revenue to need based financial aid.

12 FY 2006 Budget: Tuition Rate Concepts Undergraduates: UCCS & UCD: All resident students will have a base 5.5% tuition increase. Part time students maximum net increase will be 5.5%. Implement a linear tuition structure over next two years. Maximum possible net increase for any resident student who applies for need based financial aid will be 14%. UCB Develop a tuition structure that reflects market conditions 40% of resident freshman do not apply for any type of financial aid Resident students who families earn $50,000 or less will have a maximum net increase of 5.5%. Resident students who families earn $80,000 or less will have a maximum net increase of 9.5%. Graduates: Graduate tuition rates will be determined by market for graduate and professional programs.

13 Other Operating Expenses Financial Aid CU Anticipated Expenditure Increases FY 2006: Expenses Associated with Unfunded Enrollment Utilities & Facilities Faculty & Exempt 4.3% Classified Staff 4.3% Total Investments Needed: $49 M or 7.7% Note: Faculty & Staff amounts include adjustments for Salary and H,L,D. Add’l Financial Aid