1. FY 2014 Budget Review & FY 2015 Budget oUTlook
Business
March 19, 2014

2. Budget Review & Outlook
WSU funding situation:
High cost structure (faculty salaries are on par with peer research universities)
Low tuition rates (tuition rates are on par with regional Michigan universities)
State support has decreased (FY 2002 $240 M; FY 2013 $183 M)
Decreases in General Fund fund balances over last several years
WSU has relied on enrollment growth and tuition increases to balance the budget from FY 2001 to FY 2010
FY 2001 to FY 2010: fall credit hours increased by 52,138 over this time or 1.8% per year on average; in addition, tuition rates increased by 8.3% on average
Recently enrollment has declined and tuition restraint has prevented substantial tuition increases
FY 2010 to FY 2014: fall credit hours decreased by 22,355 over this time or -2.4% per year on average; in addition, tuition rates increased by 4.9% on avg.
FY 2015 & FY 2016: fall credit hours continue to decline; tuition rates expected to be approximately 3.2% or less.
Projected future decline in Research funding will have negative impact on General Fund budget
Governors’ FY 2105 Higher Education proposed budget for WSU includes:
State Appropriation increase of $7.3 M, which is a 1.3% over total general fund budget
Tuition restraint of 3.2% for undergraduate resident students
All incremental State Appropriations are conditional upon meeting requirement of tuition restraint

3. Enrollment Trends Credit Hours: fall 2000 to fall 2015
Projections
Credit Hours production are at approximately same levels as fall 2002
Faculty headcount has increased by 8% since fall 2002

4. Total Research & Development Expenditures
$ in Millions
Proj.
Total R & D expenditures are projected to decrease because of Federal Grants & Contracts funding reduction
ICR Revenues
$ in Millions
Current ICR projections are: FY 2014 = $31 M; FY 2015 = $29 M
FY 2015 projected ICR revenues are 25% below FY 2012 levels
Proj.
Proj.

5. Financial Aid Budget Changes
($000)
Institutional Financial Aid increased by 38% or $17 M from FY 2010 to FY 2014
Need-based aid grew by 139% during this time
The $17 M increase accounts for 52% of the total expenditures increases at WSU since FY 2010
For FY 2015 & FY 2016, it is assumed that the financial aid budgets will increase at the rate of tuition

6. FY 2015 State Higher Education Budget
Total MPU increase of 6.1% or $76.9 M
WSU Allocation was $7.3 M or 4.0%
Base Restoration $5.8 M
Performance Funding $1.5 M
Undergrad Critical Skills Awarded $378 k—22% of funding
Research Expenditures $509 k—11% of funding
Metrics Compared to Peers $652k—67% of funding
Six Year Graduation Rate
Total Degree Completion (includes graduate degrees)
Inst. Support as % of Core Expenditures
Student Receiving a Pell Grant
Impact on Total General Fund Budget
Total General Fund Budget = $576.5 M
State allocation of $7.3 M equates to 1.3% increase on total budget
Requirements to receive any incremental funding:
Resident undergraduate tuition increase below 3.2%
WSU Suggested Improvements for Metrics
Incorporating Pell Grant data
Revising Peers List
Larger weight in improvement

7. Enrollment Update--YTD
Review FY 2015 & FY 2016 Assumptions
Revenue Assumptions
State Appropriations
FY 2015 = 4.0%
FY 2016 = 3.0%
Tuition & Fees
Rate increase of 2.9% for both years (and all programs)
Enrollment Changes
FY 2015 = -2.6%
FY 2016 = -1.5%
Indirect Cost Recovery
FY % decrease or $4 M
FY Stable
Investment Income
FY 2015—decrease of $1 M
FY 2016—at FY 2015 levels
Expenditure Assumptions
Compensation:
Academic= 2.5%
Non-Academic = 2.0%
Utilities
MBRB = $1.1 M
ATEC = $0.3 M
Fringes
FY 2015 = 4.0%
FY 2016 = 4.0%
Additional initiatives:
FY 2015
Campaign $1.5 M
Retention $0.5 M
Debt Service $0.3 M
MBRB $TBD
FY 2016
Debt Service $1.3 M

8. Enrollment Update--YTD
Preliminary FY 2015 & FY 2016 Budget Outlook

9. POTENTIAL REDUCTIONS CONCEPTS
Budget reductions for Schools/ Colleges will not allocated ATB
Metrics will be used to determine allocations
President and Provost will also determine changes in budgets
Potential Metrics to be used
Enrollment changes
Research productivity
Philanthropy
Degrees awarded
Retention
Profitability
Community Engagement

10. Metric Analysis Enrollment Metric (4x) Research Metric (2x)
Fall 2010 to Fall 2014 (projection)
50% weighted on where course was offered
50% weighted on student major
Research Metric (2x)
Research Awards per FT Faculty Member
FY 2010 base year compared to three year average
FY 2011 to FY 2013
Philanthropy (2x)
Retention (1x)
FTIAC retention where appropriate
Fall 2009 base compared to three year average
Degrees Awarded (2x)
Undergraduate, Graduate and Professional Degrees considered
Profitability (2x)
Only direct revenues and expenses considered (State Appropriations and overhead not included)
“Profit Generator”—considered if School / College was a profit maker
“Margin Changes”---recognizes Schools / College where financial position has improved
Community Engagement (1x)
Changes in number of students served in “Out of Classroom Learning Experiences
All scoring was typically compared to Total University averages

11. Undergrad Change = -10%; Graduate Change = -42%
Business Total
Enrollment
Faculty & Staff
Undergrad Change = -10%; Graduate Change = -42%
Total Change = -20%
FT Faculty Change = -16%
FT Staff Change = 3%

12. Accounting Fall 2009 to Fall 2013 Undergrad Change = -1.7%;
Total Change = -0.9%

13. Business & Finance Fall 2010 to Fall 2013 Undergrad Change = -11.1%
Total Change = -26.6%

14. Marketing & Supply Chain Mgmt.
Fall 2010 to Fall 2013
Undergrad Change = 19.1%;
Grad Change = N/A%
Total Change = 19.1%

15. Mgmt. & Information Systems
Fall 2010 to Fall 2013
Undergrad Change = -18.4%;
Grad Change = N/A%
Total Change = -18.4%

16. Profitability

17. FY 2015 Budget Outlook Concerns Positives
Impact of tuition increase above restraint levels
Enrollment & ICR concerns
Additional costs (debt service; capital campaign, etc.)
Positives
New leadership
Facility improvements
MBRB, Macomb, Student Center, Labs
Fund Raising at record levels
Development of new programs and partnerships
OCC Partnership with Nursing; Schoolcraft partnership
Retention and Recruitment Strategies
Diversification of financial aid