1. 2009-11 Higher Education Budget Recommendations Presented to: House Ways and Means Committee February 3, 2009

2. FTE Enrollment in Indiana Postsecondary Institutions 2 Source: Annual Editions of Report of Enrollment in Indiana Colleges and Universities, prepared for the Indiana Association of Collegiate Registrars and Admissions Officers. Independent Colleges of Indiana. Commission for Higher Education Student Information System. Peer Comparisons

3. Hoosier Enrollment (FTE) Trends 1994-2007 3

4. 4

5. Commission Budget Responsibilities and Priorities Debt Service College Completion Incentives: – Number of Degrees – On-Time Degrees – Low Income Degrees Enrollment/Student Course Success Incentive Research Funding Incentive R&R Economic Development Two-Year Transfer Incentive SSACI 5

6. FY 2010: 1.0% FY 2011: 2.0% Marginal appropriation increases: FY 2010: $16M FY 2011: $32M Includes: – Operating – Debt Service (fee replacement) – R&R – Line Items (plus IEDC $20M appropriation) Excludes: – SSACI 6

7. Operating Budget 7

8. Campus Operating appropriations are based on the following formulae: – Number of Degrees Incentive – On-Time Degrees Incentive – Degrees to Low Income Students Incentive – Enrollment/Successfully completed credit hours Incentive – Research Funding Incentive – Two Year-Transfer Incentive 8

9. The Education Pipeline 9 Source: National Center for Higher Education Management Systems, www.higheredinfo.org; Data from 2004. On-Time Completion and College Completion utilize NCES, IPEDS 2007 Graduation Rate File; gr2007 Early Release Data Filewww.higheredinfo.org *This represents a 6-year graduation rate of 57.84% at 4-year institutions, and a 24.8% three-year graduation rate at 2-year institutions.. For every 100 Indiana 9 th graders: High School Graduation: 70 students graduate with a high school diploma on time College Entry: 41 students enter college the fall following high school College Persistence: 30 students are still enrolled sophomore year College Completion: 24 students graduate from college within six years* On-Time College Completion: 16 students graduate from a 4-year college on time Top 5 States 86 students graduate with a high school diploma on time Top 5 States 38 students are still enrolled sophomore year Top 5 States 23 students graduate from a 4- year college on time Top 5 States 33 students graduate from college within 6 years Top 5 States 55 students enter college the fall following high school

10. College-Going Rate of Recent High School Graduates Indiana’s rate grew by 9.6% over the last 10 years, while the national rate grew by 5.2%. 10

11. College Completion 11

12. College Completion: Public 4-Year Universities 12 Percent of First-Time, Full-Time, Degree-Seeking Students Earning a Bachelor’s Degree, 2007 4-Year Grad Rate6-Year Grad Rate Indiana University – Bloomington50%72% Purdue University – West Lafayette36%69% Ball State University30%58% Indiana State University20%41% University of Southern Indiana13%31% Indiana University – Northwest11%32% Indiana University – Kokomo12%27% Indiana University – Southeast8%29% IUPUI9%32% Indiana University – East10%18% Indiana University – South Bend6%27% Purdue University – Calumet4%20% IPFW5%23% Purdue University – North Central2%13% Source: US DOE National Center for Educational Statistics (NCES) through Peer Analysis System (PAS), IPEDS 2007 Graduation Survey

13. College Completion: Public 2-Year Colleges 13 Percent of First-Time, Full-Time, Degree-Seeking Students Earning an Associate’s Degree 3-Year Rate (2001 Cohort)3-Year Rate (2002 Cohort) ITCC – South Bend11%9% ITCC – Indianapolis9% ITCC – Columbus16%10% ITCC – Muncie9%8% ITCC – Kokomo12% ITCC – Lafayette15%13% ITCC – Ft. Wayne18%14% ITCC – Sellersburg7%9% ITCC – Evansville11%12% ITCC – Terre Haute9%12% ITCC – Richmond20%15% ITCC – Gary9%10% ITCC – Madison14%11% ITCC – Bloomington20%8% Vincennes University21% Total 2-Year Rate15%14% Source: IPEDS Graduation Rate Surveys.

14. College Completion Incentives Degree Change Incentive ($12M) – Provides a funding increase or decrease based on the change in total degrees awarded to Hoosier students year over year $5,000 per Baccalaureate degree $3,500 per Associate Degree On-Time Degree Change Incentive ($1.6M) – Provides funding increase or decrease based on change in the on-time graduation rate of Hoosier students. Counts only first-time, full-time cohort. $5,000 per Baccalaureate degree $3,500 per Associate degree 14

15. College Completion Incentives Low Income Degree Completion Incentive – Baccalaureate Degree Attainment by Age of 24 by Family Income Quartile (2005) Bottom Quartile12.3% Second Quartile16.6% Third Quartile27.9% Top Quartile 72.6% 15

16. College Completion Incentives Low Income Degree Change Incentive ($1.8M) – New formula in 2009-11 – Provides funding increase in the number of degrees to low-income students based on increase in degrees awarded to Pell recipients. $5,000 per Baccalaureate degree $3,500 per Associate degree – Using Pell recipients broadens the universe of eligible students to include, part-time, non-traditional and students who may have missed the March 10 SSACI deadline 16

17. College Completion Incentives FY 2010 Degree ChangeTime to DegreeLow Income Degree IUB $140,000$473,402$0 IUE $175,000($15,059)$0 IUK $180,000($45,892)$45,000 IUN $225,000($70,161)$0 IUSB $277,500$24,416$175,000 IUSE $32,500$11,324$0 IUPUI Health $0 IUPUI GA $2,027,500$119,954$500,000 PUWL ($1,612,500)$412,874$0 PUC $77,500$67,903$0 PUNC $592,500$131,493$140,000 IPFW $755,000$38,853$195,000 ISU $347,500($258,063)$0 USI $607,500$363,453$0 BSU $2,542,500$658,682$140,000 VU $33,250($91,703)$42,000 ITCCI $5,488,000($239,344)$563,500 17

18. College Completion Incentives FY 2011 Degree ChangeTime to DegreeLow Income Degree IUB $140,000$473,402$0 IUE $175,000($15,059)$55,000 IUK $180,000($45,892)$25,000 IUN $225,000($70,161)$230,000 IUSB $277,500$24,416$0 IUSE $32,500$11,324$70,000 IUPUI Health $0 IUPUI GA $2,027,500$119,954$0 PUWL ($1,612,500)$412,874$255,000 PUC $77,500$67,903$195,000 PUNC $592,500$131,493$0 IPFW $755,000$38,853$25,000 ISU $347,500($258,063)$5,000 USI $607,500$363,453$205,000 BSU $2,542,500$658,682$10,000 VU $33,250($91,703)$0 ITCCI $5,488,000($239,344)$381,500 18

19. Credit Hours Completed Incentive Historically, CHE has counted enrollment (FTE) based on the number of credit hours students are enrolled in at the beginning of a semester (“attempted credit hours”) CHE is transitioning to counting enrollment (FTE) based on the number of credit hours completed by students at the end of the semester with a grade of at least D- (“successfully completed credit hours”) The number of successfully completed credit hours is equal to approximately 80% of attempted credit hours statewide Provides an incentive for institutions to assist students in completing courses, leading to higher graduation rates 19

20. Credit Hours Completed Incentive Measures Enrolled Credit Hours and Successfully Completed Credit Hours Incentive ($24M) Phasing in Successfully Completed Credit Hours Incentive: 90%/10% in FY2010 75%/25% in 2011 Goal to Phase in 100% by 2013 Initial phasing is intended to be revenue neutral 20

21. Enrollment Change/Successfully Completed Credit Hours FY 2010FY 2011 IUB $0 IUE ($83,126)($97,566) IUK ($44,930)($80,824) IUN ($28,267)($70,668) IUSB ($254,646)($263,864) IUSE $279,252$284,879 IUPUI Health $1,215,264$1,263,660 IUPUI GA ($725,353)($742,383) PUWL $0 PUC $272,881$268,204 PUNC $106,259$114,898 IPFW $625,507$638,268 ISU ($1,572,844)$532,014 USI $0 BSU $0 VU $821,047$842,493 ITCCI $14,245,428$14,246,070 21

22. Two Year Transfer Incentive Last Biennium, rewarded 2-year schools for transferred credits This year, formula rewards 4-year schools that accept transfer hours ($3.2M) – Funds ¼ FTE ($875) in FY10 and FY11. Will convert to growth only in next biennium. 22

23. Two-Year Transfer Incentive FY 2010FY 2011 IUB $310,013$310,333 IUE $67,638$60,113 IUK $170,683$160,533 IUN $46,667$53,667 IUSB $67,608$151,200 IUSE $98,438$113,925 IUPUI Health $0 IUPUI GA $778,079$991,725 PUWL $310,508$333,054 PUC $126,204$125,533 PUNC $98,875$16,654 IPFW $150,150$163,275 ISU $509,950$482,213 USI $426,183$482,213 BSU $335,446$407,808 23

24. Research Funding Incentive Matches University Expenditures on Research Expenditure Growth $.75 per $1 Matches Federal, Competitively Awarded Private Foundation Research Grants Includes IUB, PUWL & IUPUI Health 24

25. Research Support Incentive Funds a 75% match for sponsored research from Federal Government ($25M) Funds only the Major Research Universities (IUB, IUPUI, and PUWL), consistent with Reaching Higher 25 FY 2010FY 2011 IUB$3,431,029 IUPUI$12,069,215 PUWL$9,496,809

26. Economic Development Incentive Rewards Non-Credit Workforce Development Activity($500,000) Working with ITCCI and VU to understand the details of the activity. Working with DWD to coordinate funding activities. Incentive is considered within the context of all the operating formulae. CHE intent is to focus on Non-Credit Instruction Leading to Third-Party Certifications in Areas Such As: – Computers & IT – Manufacturing & Industrial – Medical & Health 26

27. Formula Results FY 2010FY 2011 Number of Degrees Incentive$12M On-Time Degrees Incentive$1.6M Low Income Degrees Incentive$1.8M$1.5M Enrollment/SCCH Incentive$14.9M$16.9M Research Support Incentive$25M Two-Year Transfer Incentive$3.5M$3.9M Workforce Training Incentive$0.5M total$59.1M$61.2M 27

28. Across the Board (ATB) Reductions and Formula Driven Add-back FY 2010 – Reduce all campus operating appropriations by 1.2% – Recognize 50% of the formulae results – Add-back the formula results to campus operating FY 2011 – Reduce all campus operating appropriations by 3.5% – Recognize 100% of the formula results – Add-back the formula results to campus operating 28

29. Across the Board (ATB) Reductions and Formula Driven Add-back FY 2010FY 2011 Base ATB Reduction %1.2%3.5% Base ATB Reduction $$14.7M$45.9M Add-Back$29.6M$61.2M Net Operating Increase %1.2% Net Operating Increase $$14.8M$15.3M 29

30. Economic Development Indiana Innovation Alliance – Joint Request by IU and PU – Request is 3 pronged: Expand Core Research Capabilities through matching grant funds and high cost equipment sharing ($25M) Expand Regional Medical Centers to 4-Yr Programs ($5M) Expand PU Technical Assistance Program (TAP) in health related areas ($5M) 30

31. Economic Development $20M FY 2009 Appropriation to IEDC “to provide grants of $15,000,000 to Indiana University School of Medicine and grants of $5,000,000 to Purdue University to support the recruitment and retention of world class scientists specializing in the life sciences.” Recommend carry the $20M appropriation flat into FY 2010 and FY 2011 to fund joint “Core Research Capabilities” only Requires substantially diversified management committee to make decisions about expenditures Appropriation should be to either IUPUI or SBA 31

32. Capital Budget 32

33. Debt Service Appropriations 1976-2009 33 CAGR = 8.8% Higher Education Capital Issues

34. Change in State Appropriations FY01 – FY 09 34 Higher Education Capital Issues

35. Capital Budget Debt Service (fee replacement) requirements without any new capital projects added by 2009 Indiana General Assembly (assumes all projects authorized in 2007 are funded) 35 FY 2009FY 2010FY 2011 Appropriation$176.6M$179.1M$185.5M Marginal increase$2.6M$6.4M

36. Capital Budget New Capital Projects Recommendations 36 projectproject costdebt service ITCCI Warsaw New Building$10.1M$0.9M ITCCI Anderson New Building$20M$1.7M IU/PU Life Sciences Laboratory Renovations (1) $30M$2.5M IUN Tamarack Hall Replacement (2) ?? totals$60.1M$5.0M Notes: (1) IU/PU Life Sciences Laboratory Renovations is $30M bonding for Special R&R for laboratories only at IUB, IUPUI & PUWL. Distribution to be determined. (2) Tamarack Hall was damaged by flood, awaiting new information.

37. History of R&R 2000-2009 37 2007-09 shows biennium to date approvals

38. Capital Budget R&R Recommendation – Fund R&R at FY 09 level in 2010 and 50% of 07-09 formula in FY 2011 38 FY 2009FY 2010FY 2011 R&R Appropriation$31.0M $36.3M

39. Summary FY 2010 FY 09 Total IncreaseFY 10 Total%Δ OPERATING Operating Appropriations1,280,962,10114,829,6101,295,791,7111.2% University Line Items45,322,458(1,278,400)44,044,058-2.8% Other Higher Educ Line Items12,941,633300,0013,241,6322.3% IEDC/Ind. Innovation Alliance20,000,0000 0.0% Leases10,189,673(556,575)9,633,098-5.5% TOTAL OPERATING$1,369,415,865$13,294,635$1,382,710,4991.0% CAPITAL R&R31,035,0480 0.0% Debt Service176,580,6982,560,439179,141,1371.5% TOTAL CAPITAL$207,615,746$2,560,439$210,176,1851.2% GRAND TOTAL (without SSACI)$1,577,031,611$15,855,073$1,592,886,6841.0% 39

40. Summary FY 2011 FY 10 Total IncreaseFY 11 Total%Δ OPERATING Operating Appropriations1,295,791,71115,340,8351,311,132,5461.2% University Line Items44,044,058(27,500)44,016,558-0.1% Other Higher Educ Line Items13,241,6320 0.0% IEDC/Ind. Innovation Alliance20,000,0000 0.0% Leases9,633,098(52,468)9,580,630-0.5% TOTAL OPERATING1,382,710,49915,260,8671,397,971,3661.1% CAPITAL R&R31,035,0485,244,38036,279,42816.9% Debt Service179,141,13711,398,047190,539,1846.4% TOTAL CAPITAL210,176,18516,642,426226,818,6127.9% GRAND TOTAL (without SSACI)1,592,886,68431,903,2931,624,789,9772.0% 40

41. State Student Assistance Commission of Indiana (SSACI) 41

42. SSACI Caps SSACI Award demands have surpassed resources for several years, including in 2009-11 As state appropriations to SSACI have not been able to keep pace with rising enrollments and tuition, the maximum award on the O’Bannon Grants (HEA & FOC) have been capped. 42

43. 2008-09 FOB Award Cap (publics) and Mandatory Tuition & Fee Charges 43 2008-09 FOB Caps: Public Cap: $6,096 Private Cap $10,992

44. SSACI – Recommend funding SSACI at a level that allows caps to remain constant (no cut in awards or caps) 44 FY 2009FY 2010FY 2011 Appropriation$249.2M$286.3M$304.7M Marginal Increase$37.1M$18.4M % Increase14.9%6.4%

45. Summary FY 2010 and FY 2011 FY 09 Total FY 10 Total%ΔFY 11 Total%Δ TOTAL w/out SSACI1,577,031,6111,592,886,6841.0%1,624,789,9772.0% SSACI249,155,438286,247,19414.9%304,682,3746.4% GRAND TOTAL w/ SSACI$1,826,187,049$1,879,133,8782.9%$1,929,472,3512.7%

46. Tuition Targets for 2009-11 CHE is required by statute to “recommend biennially non-binding tuition targets” after the 2009 General Assembly passes the biennial budget CHE will make “tuition targets” recommendations after the budget is passed 46

47. 47

48. Data Appendix 48

49. ATB Reductions and Formula Driven Add-back IU FY 09 baseATB cutsFormula Results FY 2010 Approp. Marginal Increase % Increase IUB$202,202,196($2,325,325) $2,177,222$202,054,093($148,103)-0.1% IUE8,322,137($95,704) $72,227$8,298,659($23,478)-0.3% IUK10,817,455($124,400) $152,431$10,845,485$28,0300.3% IUN18,061,296($207,704) $86,620$17,940,211($121,085)-0.7% IUSB23,236,007($267,214) $144,939$23,113,732($122,275)-0.5% IUS20,848,802($239,761) $210,757$20,819,798($29,004)-0.1% IUPUI Health124,434,677($1,430,998) $6,642,240$129,645,918$5,211,2414.2% IUPUI GA83,311,562($958,083) $1,350,090$83,703,569$392,0070.5% IU Total$491,234,132($5,649,193) $10,836,524 496,421,463 5,187,3311.1% 49

50. ATB Reductions and Formula Driven Add-back PU FY 09 baseATB cutsFormula Results FY 2010 Approp. Marginal Increase % Increase PUWL$262,033,737($3,013,388)$4,303,846$263,324,195$1,290,4580.5% PUC$28,212,704($324,446)$272,244$28,160,502($52,202)-0.2% PUNC$11,969,824($137,653)$534,564$12,366,735$396,9113.3% IPFW$38,449,705($442,172)$882,255$38,889,788$440,0831.1% PU total$340,665,970($3,917,659)$5,992,908$342,741,219$2,075,2490.6% 50

51. ATB Reductions and Formula Driven Add-back FY 09 baseATB cutsFormula Results FY 2010 Approp. Marginal Increase % Increase ISU$76,911,131($884,478)($486,729)$75,539,924($1,371,207)-1.8% USI$40,387,429($464,455)$698,568$40,621,542$234,1130.6% BSU$130,381,244($1,499,384)$1,838,314$130,720,174$338,9300.3% VU$38,967,141($448,122)$402,297$38,921,316($45,825)-0.1% ITCCI$162,415,053($1,867,773)$10,278,792$170,826,072$8,411,0195.2% 51

52. ATB Reductions and Formula Driven Add-back IU FY 10 baseATB cutsFormula Results FY 2011 Approp. Marginal Increase % Increase IUB$202,054,093($7,152,715)$4,354,764$199,256,142($2,797,951)-1.4% IUE$8,298,659($293,773)$177,488$8,182,374($116,285)-1.4% IUK$10,845,485($383,930)$238,817$10,700,372($145,113)-1.3% IUN$17,940,211($635,083)$367,838$17,672,965($267,245)-1.5% IUSB$23,113,732($818,226)$189,252$22,484,758($628,974)-2.7% IUS$20,819,798($737,021)$512,628$20,595,405($224,393)-1.1% IUPUI Health$129,645,918($4,589,465)$13,332,875$138,389,327$8,743,4106.7% IUPUI GA$83,703,569($2,963,106)$2,396,796$83,137,259($566,310)-0.7% IU Total$496,421,463($17,573,320)$21,570,458$500,418,602$3,997,1380.8% 52

53. ATB Reductions and Formula Driven Add-back PUFY 10 baseATB cutsFormula Results FY 2011 Approp. Marginal Increase % Increase PUWL$263,324,195($9,321,676)$8,885,237$262,887,755($436,439)-0.2% PUC$28,160,502($996,882)$734,140$27,897,760($262,742)-0.9% PUNC$12,366,735($437,782)$855,545$12,784,497$417,7633.4% IPFW$38,889,788($1,376,699)$1,620,396$39,133,486$243,6970.6% PU Total$342,741,219($12,133,039)$12,095,318$342,703,498($37,721)0.0% 53

54. ATB Reductions and Formula Driven Add-back FY 10 baseATB cutsFormula Results FY 2011 Approp. Marginal Increase % Increase ISU$75,539,924($2,674,113)$1,108,664$73,974,475($1,565,449)-2.1% USI$40,621,542($1,438,003)$1,658,166$40,841,705$220,1630.5% BSU$130,720,174($4,627,494)$3,618,990$129,711,670($1,008,504)-0.8% VU$38,921,316($1,377,815)$784,040$38,327,541($593,775)-1.5% ITCCI$170,826,072($6,047,243)$20,376,226$185,155,055$14,328,9838.4% 54

55. Operating Budget Leases for higher education related facilities Includes: – Animal Disease Diagnostic Laboratory – Columbus Learning Center – ITCCI Ft Wayne Public Safety Facility – BSL-3 facility 55 FY 2009FY 2010FY 2011 Appropriation$10.2M$9.6M Marginal Increase($0.6M)$0

56. Operating Budget University Line Items: State appropriations to public postsecondary institutions made for specific higher education related purposes $1.3M reduction to State Dept. of Toxicology FY 2010 Propose flat-line at FY 09 levels for all other line items 56 FY 2009FY 2010FY 2011 Appropriation$45.3M$44.0M Marginal Increase($1.3M)$0

57. Operating Budget Other Higher Education Line Items: State appropriations made for specific higher education related purposes Learn More Indiana increase $0.3M FY 2010, $0 FY 2011 All other Line Items flat-lined at FY 09 levels 57 FY 2009FY 2010FY 2011 Appropriation$12.9M$13.2M Marginal Increase$0.3M

58. Higher Education Budget Cuts Nationwide (actual or proposed) Appropriation cutsTuition Freeze Massachusetts (-5.6%)Missouri Pennsylvania (-4.25%)Texas Virginia (- 5% to -7%)North Dakota Utah (-4%)Ohio Tennessee (-3.4%)Tennessee (CC only) Maryland (-$40M)Maryland New York (-7%)Michigan Alabama (-11%)Oklahoma Florida (-6%) Nevada (-14%) 58 Source: Chronicle of Higher Education, 10-14-2008