1. MnSCU Biennial Budget FY10- 11

2. What is it? Every other year, MnSCU develops an operating budget. Request new money from legislature Board of Trustee’s approve and then advocate at the legislature

3. Our Role? Provide input during development of biennial budget recommendation Advocate (or not) for funding of the biennial budget (legislature) One money is appropriated, again provide input on how money is spent

4. Example (FY08 – 09) November 2006 MnSCU requests $177 million for biennium budget June 2007 Legislature gives MnSCU ~ $152 Million Increase in Appropriation for FY 2008 & FY 2009 Board of Trustees approve to spend money this way $146.5 Million in “On-Going” Money $22 Million Underrepresented and Underserved $56.8 Million for Inflation $62.8 Million for Technology $10 Million goes to Campuses $5 Million Non-Resident Tuition Buy Down $5.5 Million One time Money Legislative Initiatives

5. Example (FY08 – 09) June 2008 State Legislature approves $8.6 million cut to MnSCU $1 million one time money cut from reserves $7.6 million base cut $5 million from Technology $2.6 million from Office of Chancellor These cuts are tails into the next biennium

6. Next Biennial Budget (FY10 – 11)

7. 1+1=3 Remember, when talking about biennial budget math, 1+1=3 Example: Buy down tuition 1% at our state u’s for one year cost ~$3 million For the biennium 1 st year: – 1% $3 million 2 nd year: Buy down last year again - $3 million and another 1% for the current year = $3 million Total $9 million

8. Background Predicting over $2 Billion State Budget Deficit Translate into 6% reduction across state agencies State Department says 3% inflation increase Will be higher in November Forecast MnSCU needs ~$133 million for the biennium to break even at this inflation rate Translates into ~7% tuition increase per year to break even (1% Tuition = $6.5 Million)

9. MSUSA Request Inflation funding only

10. Chancellor’s Recommendation Table 1 Minnesota State Colleges and Universities Fiscal Years 2010-2011 Biennial Operating Budget ($ in millions) Request Components (From Leg) FY2010FY2009 Bienniu Inflation $15.9 $32.2 $48.1 Tuition Assistance $15.0 $19.5 $34.5 Academic Initiatives $9.5 $16.7 $26.2 State University Faculty Compensation Special $5.9 $12.0 $17.9 Total New State Appropriation Request $46.3 $80.4 $126.7 Tuition Assumption: 4% universities; 3% colleges $22.4 $45.6 $68.0 Total New Revenues $68.7 $126.0 $194.7 Reallocation Commitment $7.0 $13.0 $20.0

11. Inflation - $133 Million 3% Assumption Higher Ed Index 3.8% State appropriation: $48.1 million Tuition: $68.0 million. The package assumes a 4 percent ($222 per year) average annual tuition increase at the universities and a 3 percent ($122 per year) average increase at the colleges. Reallocation: $6.9 million of existing resources will be reallocated to supplement the amount available to cover inflation.

12. Tuition Assistance - $34.5 Million $10.6 Million - Tuition Buy Down at state colleges State will supplement lost revenue so they see 4% revenue $5.3 Million – Expand Power of You Program Expand to 4 more campuses $18.6 Million – Part-Time Student Grant Program 4-14 Credits $150/semester Help about 60,000 students

13. Academic Initiatives $26.2 Million in State Resources $13.1 Million in Reallocation

14. Academic Initiatives – Workforce 2020 $10 Million - Healthcare and Manufacturing education Mostly Nursing Programs $10 Million – STEM Programming $1.2 Million – Entrepreneurship and Small Business Education

15. Academic Initiatives – Metro Area Planning $5 Million – Capacity building for the Metropolitan Area Plans yet to be decided

16. State University Faculty Compensation Special $17.9 Million Inflationary raised included in inflation funding. 2.5% increase 1.5% salary increase 1% benefits increase

17. State Chair Frederick’s Thoughts Asking too much $ in a bad economy Too many initiatives Not enough $ in inflation

18. MSUSA Current Stance

19. State Chair Frederick’s Recommendation Push for more money invested in inflation to maintain academic standards and quality Ask that initiatives currently being funded be re-evaluated New initiatives funded by reallocating from initiatives that are not working

20. Schedule September 15 th – 16 th – First Reading October 8 th – Board of Trustee Public Hearing Wells Fargo, Downtown St. Paul November 18 th – 19 th – Second Reading

21. Questions?