PENNSYLVANIA STATE SYSTEM OF HIGHER EDUCATION

Spring 2014 Adjustments Board of Governors’ Meeting April 9, 2014 PASSHE Budget Update

Total Budget $2,183.7 Educational and General $1,562.4 Auxiliary $327.9 Restricted $ /14 Total Budget $ in Millions As of October 2013

Salaries & Wages $796 52% Benefits $353 23% All Other Operating $307 20% 2013/14 E&G Expenditures and Uses $ in Millions E&G Expenditures: $1,562 As of October 2013

2013/14 and 2014/15 E&G Budget As Presented October 2013 ($ in Millions)

Tuition, Fees $1,015.2 Funding Requirement * Requires $7 million in university cost reductions. Note: Other includes miscellaneous revenue and use of carryforward. Numbers may not add due to rounding. $ in Millions Appropriation $ /15 E&G Budget Request $ in Millions E&G Budget: $1,606.9 * Other $ % E&G Appropriation $16.5 Assume Tuition Increase Similar to CPI $27.3 Priority Programs Line Item $18.0 $61.7 As of October 2013

$ in Millions 18% Reduction PASSHE Appropriations *Based upon Governor’s recommended Commonwealth budget. State Appropriations Recent Funding History

Agenda Enrollment Projections Annualized Full-Time Equivalent 5,801 or 5.2% less than 10/11 As of October 2013

Revised Enrollment Projections Annualized FTE Students 2013/14 % Change2014/15 FTE Change % Change Original104,589103,815(774)(0.7%) Revised104,682103,428(1,254)(1.2%) Difference930.1%(387)(0.4%) Current enrollment projections reveal:  Improvement for FY 2013/14  Greater reduction in 2014/15 enrollment

Revised 2013/14 E&G Budget $ in Millions

2014/15 Cost Drivers Categories Percent Increase$ in Millions Salary Adjustments * 3.1%$23.9 Health Care 7.0% ** $12.6 Revised Health Care$9.5 Retirement *** 21.4%$18.2 Consumer Price Index3.0% * Estimated cost of required adjustments based on a static complement. ** Varies by health care program. *** Includes estimated PSERS/SERS rate change of 29%.

Projected Retirement Costs 32 % 27 % SERS Rates as % of Salary 2013/1415.1% 2014/1520.0% 2017/1831.6% 2014/15 E&G cost increase for SERS and PSERS: $13 million

Tuition, Fees $1,015.2 Funding Requirement $58.6 * Requires $7 million in university cost reductions. Note: Other includes miscellaneous revenue and use of carryforward. Numbers may not add due to rounding. $ in Millions Appropriation $412.8 Revised 2014/15 E&G Requirement $ in Millions E&G Budget: $1,603.8 * Other $117.2