1. 2015-17 Postsecondary Budget Recommendation December 18, 2014 1

2. 2 Higher Education Budget

3. Overview Operating Line items Capital Projects Repair & Rehabilitation Tuition & Mandatory Fees 3

4. Operating 4

5. 5 2 Year % Change (2011 Base Year)

6. Full-Time Equivalent vs. Headcount FTE: standardized way of measuring credit production # credit hours attempted during FY 30 (24 for graduate) Headcount: count of students attending an institution Examples: – Shelley attends college part time at 8 credits per semester. (.5FTE; 1 headcount) – Keith attends college full time at 15 credits per semester. (1 FTE; 1 Headcount) 6 FTE=

7. Resident FTE flat / Declining 7

8. Budget Recommendation – Guiding Principles Maintain commitment to student financial aid Maintain state’s support for higher education Use inflation indices (e.g., CPI, HECA) to inform recommended higher education funding Align recommendation to Reaching Higher, Achieving More strategic plan – Student-centered, mission-driven, workforce-aligned – Completion, productivity/affordability, quality 8

9. Recommendation - Operating FY16: Increase performance funding pool to 7% in FY16 with 4% reallocation ($46.4M) and 3.23% ($37.4M) Total FY16 Performance Funding: $83.8M FY17: Increase performance funding pool to 8% in FY17 with 5% ($58M) reallocation and 3.26% ($37.8M) Total FY17 Performance Funding: $95.8M Performance funding = 4.4% of total annual higher education funding 9

10. Line Items 10

11. Recommendation - Line Items Fund previously existing line items (excluding USI $2M, BSU $4.087M and IPFW $2M which were rolled into FY15 base funding) No newly requested line items recommended If previously existing line item increases requested were in excess of the operating increase, increases were reduced to max operating increase Fund Dual-Credit at current $50 per credit hour (a 77.5% increase from previous biennium; $6,398,600 increase in dollars) BIF Dedicated funds included in submissions funded at requested levels as no request exceeded operating increase (excluding MHEC contract) 11

12. Capital Projects 12

13. Higher Education Capital Projects Focus on: – Priority one projects – Deferred maintenance of buildings – Projects that improve academic space needs for campuses Consider the impact on student fees and state support for capital projects (debt service) Maintain overall debt levels near 10% of operating funds 13

14. Capital Projects Recommended Capital Projects Requested: – 31 Projects – $761,700,000 Capital Projects Recommended: – 7 Projects – $285,000,000 Debt Service per year: $22M 14

15. Ball State STEM & Health Professionals Facility Renovation & Expansion Project, Phase I: $62.5M Indiana State College of Nursing, Health, and Human Services Project: $64M Ivy Tech Muncie New Construction & Renovation: $25.0M IU Bloomington Old Crescent Renovation Phase II: $48.5M PU West Lafayette Agriculture & Life Sciences Facility Phase I: $30.0M USI Classroom Renovation/Expansion Health Professionals Center: $8.0M VU Center of Science, Engineering and Mathematics: $20.0M 15 Capital Projects Recommended

16. Repair & Rehabilitation 16

17. Repair & Rehabilitation Support Focus on investment allocation target to support maintenance and upkeep on academic/administrative buildings – 1.0% per year of current facility and infrastructure value Recommend repair and rehabilitation funding as partnership between state and institutions Recommend state support of investment goal at 0.50% each biennium - $31.7M from state in 2016 and 2017 (11.5% increase in overall funding) Total deferred maintenance as of 2012: $1.8B 17

18. 18 Percent increase in SFA if 21 st Century Scholars is held flat Overall Higher Education Budget

19. Funding Per FTE Past 5 Years 19

20. Tuition Targets: Commission sets nonbinding targets for tuition and mandatory fee increases after each budget session – Last biennium: limit to CPI or no more than 2% Tuition Structures: This biennium, Commission also looking at tuition structure as a tactic for student success – Do students pay by the credit hour or a flat rate? – How does that influence on-time completion? 20 Looking Ahead

21. Summary Bottom line: Increased investment in higher education means: – Additional financial support per resident FTE – Continued support for state financial aid programs – Increased state support for capital investment and maintenance of facilities – Targeted funding for returning adults Ultimate Outcome: Enhanced ability to meet the goals and initiatives of Reaching Higher, Achieving More 21