1. FY 2012/13 Budget Update Board of Governors Finance, Administration, and Facilities Committee April 4, 2012

2. Agenda  2012/13 Budget Request  Governor’s Recommendations  Revised PASSHE Projections PASSHE Budget Status

3. 2012/13 E&G Budget as Approved by Board Dollars in Millions Note: Numbers may not add due to rounding. Revenue/Sources2011/122012/13$ Change% Change Tuition$841.1$868.4$27.33.2% Fees174.2177.12.91.7% State Appropriation412.8421.48.72.1% All Other Revenue70.570.2(0.3)-0.4% Use of Carryforward Funds19.312.0(7.3)-37.9% Total Revenue/Sources$1,517.9$1,549.1$31.22.1% Expenditures & Transfers Salaries & Wages$783.9$788.9$5.00.6% Benefits316.9344.127.28.6% Subtotal, Compensation$1,100.8$1,133.0$32.22.9% Utilities36.938.01.13.0% Services & Supplies257.8256.0(1.8)-0.7% Capital Expenditures & Transfers122.3122.0(0.3)-0.2% Total Expenditures & Transfers$1,517.9$1,549.1$31.22.1% Revenue/Sources Less Expenditures/Transfers $0.0

4. Commonwealth Outlook  “Pennsylvania economy is still in recovery and has not yet emerged from the ‘Great Recession.’”  Mandatory expenditure increases are projected to eclipse revenue projections. Pensions, healthcare, corrections, debt service State Revenues $386.9 million or 1.9% below estimate -3.4% -6.1% -3.5% *Estimates are not provided for July * -3.6% -5.9% -0.5% 0.9% 2.4%

5. $ in Millions 18% Reduction PASSHE Appropriations *E&G appropriation of $412.8 million. Governor has asked PASSHE to set aside 5% for the Commonwealth budget, if needed. **Based upon Governor’s Recommended Commonwealth Budget. Potential 5% “Give Back” 20% Reduction

6. 1988/89 2012/13

7. Note: Other Revenue includes Federal appropriations; Line Items are excluded from chart. $13,809

8. 2012/13 Governor’s Recommendation Dollars in Millions Note: Numbers may not add due to rounding. Revenue/Sources2011/122012/13$ Change% Change Tuition$841.1$847.3$6.10.7% Fees174.2175.31.10.6% State Appropriation412.8330.2(82.6)-20.0% All Other Revenue70.570.2(0.3)-0.4% Use of Carryforward Funds19.312.0(7.3)-37.9% Total Revenue/Sources$1,517.9$1,435.0($82.9)-5.5% Expenditures & Transfers Salaries & Wages$783.9$788.9$5.00.6% Benefits316.9344.127.28.6% Subtotal, Compensation$1,100.8$1,133.0$32.22.9% Utilities36.938.01.13.0% Services & Supplies257.8256.0(1.8)-0.7% Capital Expenditures & Transfers122.3128.96.65.4% Total Expenditures & Transfers$1,517.9$1,556.0$38.12.5% Revenue/Sources Less Expenditures/Transfers $0.0($121.0)

9. Note: Numbers may not add due to rounding. Revised Enrollment Projections Annualized FTE Students 2011/12 % Change2012/13 FTE Change % Change Original Undergraduate99,7580.3%100,1984400.4% Graduate11,950-4.8%11,982330.3% Total111,707-0.3%112,1804730.4% Revised Undergraduate98,895-.06%99,2813870.4% Graduate11,315-9.8%11,303(12)-0.1% Total110,210-1.6%110,5843740.3% Difference(1,497)(1,596)

10. 2012/13 Expenditure Assumptions, Revised  Address staffing needs with existing funds Reductions due to enrollment decreases  Salaries No change for bargaining units without contracts  Benefits Healthcare rates: 0–10% increase  PASSHE program rate increases: 0–5.6% Retirement increases: SERS—52%; PSERS—81%  Operating Utilities: 3% increase; all other: similar to current year Capital/Transfers: similar to current year; fund Key ’93 projects from E&G budget

11. 2012/13 Revised Budget Projections Dollars in Millions Note: Numbers may not add due to rounding. Revenue/Sources 2012/13 Feb. 2012 Tuition$847.3 Fees175.3 State Appropriation330.2 All Other Revenue70.2 Use of Carryforward Funds12.0 Total Revenue/Sources$1,435.0 Expenditures & Transfers Salaries & Wages$788.9 Benefits344.1 Subtotal, Compensation$1,133.0 All Other Expenditures/Transfers423.0 Total Expenditures & Transfers$1,556.0 Revenue/Sources Less Expenditures/Transfers ($121.0)

12. 2012/13 Revised Budget Projections Dollars in Millions Note: Numbers may not add due to rounding. Revenue/Sources 2012/13 Feb. 2012 2012/13 April 2012 Tuition$847.3$835.5 Fees175.3174.0 State Appropriation330.2 All Other Revenue70.2 Use of Carryforward Funds12.0 Total Revenue/Sources$1,435.0$1,421.9 Expenditures & Transfers Salaries & Wages$788.9$786.9 Benefits344.1337.3 Subtotal, Compensation$1,133.0$1,124.2 All Other Expenditures/Transfers423.0 Total Expenditures & Transfers$1,556.0$1,547.2 Revenue/Sources Less Expenditures/Transfers ($121.0)($125.3)