1. Budget Road Map December 2009

2. Approach How much state reduction and how soon? How much of that amount can be mitigated with revenue growth and how soon? Difference is what we need to approach via expense reductions.

3. Current Multiyear Fiscal Planning Scenario “Old Plan”

4. Current Multiyear Fiscal Planning Scenario “Good”

5. Current Multiyear Fiscal Planning Scenario “Not So Good”

6. Fiscal Year20082009 2010 20112012 (Revised) (1st Revision)(2nd Revision) State 118130100 8455 100??? ARRA 0030 4675 200

7. Avoid this situation: “Not So Good” Outcome w/out Preparation – Severe, Rapid Expense Reduction We would need to adapt to the negative situation in which we would find ourselves – being unsatisfied with unpalatable choices (even historically unacceptable choices) would not excuse a lack of action Many of the choices we would need to consider to emerge financially viable from such a fiscal crisis might, in a variety of ways, be harmful to parts of our university community – but our primary responsibility would be to emerge with a financially viable university that maintained as much quality as possible in our academic programs

8. Assumptions – Mission/Vision: under any circumstances, what guides us? As a Land Grant University committed to public access, we need to try to keep tuition increases limited (affordability) As a Land Grant University, we need to maintain quality and excellence so that we are offering access to some of the best education available in the world The two above assumptions will conflict and we will need to balance them

9. Assumptions – Fiscal FY11 –9% Tuition increase for resident undergraduates will be available to us in FY11 –Our non-resident undergraduate tuition is near the top of the market but VPEA should advise us on setting this rate –Graduate tuition has minimal fiscal impact and recommendations should be formulated by VPGA FY12 –If there are additional declines in state support, there will be a loosening of tuition controls Affordability Paradox Access to Quality Balance

10. Affordability Paradox Access to Quality Balance Fiscal Assumption Implications: Revenue Growth Enrollment incentives for FY11 Options for major changes in tuition approach for FY12 By program Credit hour gap closure to 12 “simplification” Linked to enrollment incentives

11. Fiscal Assumption Implications: Expense Reduction Salary reduction? Furlough? Suspend employer retirement contribution? Cuts Level needed?

12. "Governor’s Budget" FY08FY09FY10FY11FY12 Expenses 118130125115 Cuts 005100 Resources 118130 133120 State 11810055100 New net tuition 515 Previous new base tuition 5 Base revenue subtotal 11810055105120 ARRA 03075180 Furloughs (1X) FRCR Reserve (1X) 100 Institutional Reserve (1X) 1X Subtotal 03075280 FRC Reserve (end of year) 102328

13. "$80M" FY08FY09FY10FY11FY12 Expenses 118130125115100 Cuts 0051015 Resources 118130 115100 State 1181005510080 New net tuition 515 Previous new base tuition 5 Base revenue subtotal 11810055105100 ARRA 0307500 Furloughs (1X) FRCR Reserve (1X) 100 Institutional Reserve (1X) 1X Subtotal 03075100 FRC Reserve (end of year) 105

15. Tentative Approach Target $10M FY11 cut while holding mandatory costs to a bare minimum – Positions well for Governor’s model or worse; adequate for more negative models November 31 report from Committees on enrollment incentives and FY12 tuition options – Categorization of Recommendations Model for implementation Hold for future reference Not supported P&B Hearings – January (post-December state revenue forecast)