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2. Other: $14M 2% 1990: $0.7B2012: $2.0B Office of Planning and Budgets 2 Tuition & Fees: $134M 19% Tuition & Fees: $641M 31% Auxiliary: $121M 17% Auxiliary: $293M 14% Appropriations: $206M 30% Appropriations: $241M 12% AgBio Research/MSUE: $38M 5% AgBio Research/MSUE: $52M 3% Sponsored Programs: $137M 20% Sponsored Programs: $443M 22% Gifts: $44M 6% Gifts: $174M 9% Other: $31M 1% Departmental $165M 8% Departmental $40M 6% Ranking: 1)Appropriation 2)Sponsored Programs 3)Tuition & Fees 4)Auxiliary 5)Gifts Ranking: 1)Tuition & Fees 2)Sponsored Programs 3)Auxiliary 4)Appropriation 5)Gifts MSU All Funds Revenues

3. 3 By Fund 1990: $0.7B2012: $2.0B Fluctuations between annual revenue and expense totals vary with investment performance and state appropriations outcomes MSU All Funds Expenses

4. 4 State Appropriations Support State Appropriations History Appropriations down $81M over 10 years If increased at inflation, MSU appropriations would be $166.6M more than current levels

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8. Tuition & Fees / Cost of Attendance Non-Resident Tuition & Fees Non-Resident Cost of Attendance MSU ranks 3 rd in the Big Ten for non-resident tuition and fees and 5 th for cost of attendance 8 Big Ten Non-Resident

9. Tuition & Fees / Cost of Attendance Resident Tuition & FeesResident Cost of Attendance MSU ranks 6 th in the Big Ten for resident tuition and fees and cost of attendance 9 Big Ten Resident

10. 10 MSU Endowment Status

11. 11 IPEDS 2010-11 reporting Big Ten Revenues

12. 12 Big Ten Median & MSU FY07-FY11 Big Ten MinBig Ten Median Big Ten Max As of 06/30/2011 Total Growth in Expenses

13. 13 As of 06/30/2011 Commonly used peer comparison that does not account for structural differences between institutions (i.e. Hospitals, System Consolidation, Agricultural Experiment Stations, etc Big Ten Net Assets

14. 14 Big Ten & MSU FY07-FY11 Big Ten Min Big Ten Median Big Ten Max As of 06/30/2011 Total Growth in Unrestricted Net Assets

15. 15 Big Ten Median & MSU FY07-FY11 Big Ten Min Big Ten Median Big Ten Max As of 06/30/2011 Total Growth in Debt

16. Moody’s Long Term Credit Ratings S&P Moody’s (Northwestern, University of Michigan) AAA Aaa (Indiana, Northwestern, Purdue, University of Michigan) (Indiana, Purdue) AA+ Aa1* (MSU, Iowa, Minnesota, Nebraska, OSU) (MSU, Iowa, Minnesota, Nebraska, OSU, PSU) AA* Aa2 (University of Illinois, PSU) (University of Illinois) AA- Aa3 A+ A1 A A2 A- A3 Note: University of Wisconsin not rated by S&P or Moody’s *Big Ten Median Big Ten As of 01/11/13

17. *In addition to the above, MSU also has $81M in short-term commercial paper to be converted to long-term debt, and $143M in short-term commercial paper to be repaid by internal units Outstanding debt includes issues 2000A, 2003A, 2005, 2007A, 2007B, 2010A, 2010C Long Term Bonds General Fund $338 Revenue Based Residential and Hospitality Services$169 Intercollegiate Athletics$57 Projects Parking Operations$47 Facility for Rare Isotope Beams$17 MSU College of Law$18 Recycling$12 Vet Oncology$5 National Superconducting Cyclotron Laboratory$5 Executive Development Center Anaerobic Digestion Research and Ed. Center Donor Supported Projects Secchia Center-CHM West MI$16 Wharton Center$13 Total$697* Summary of Current Bonded Debt

18. Five Year Performance Targeted range from 6-7 Adverse performance results mainly from loss of appropriations and negative investment returns 18 Composite Financial Index

19. 19 Dollars in Thousands Source: NSF Survey Big Ten Comparison Research Expenditures 2006201020111 Yr. Change U of M*$837,529$1,184,445$1,279,1238.0% Wisconsin*$904,787$1,029,295$1,111,6428.0% Minnesota*$609,918$786,074$847,4197.8% OSU$643,283$755,194$832,12610.2% PSU*$656,634$770,449$794,8463.2% Purdue*$420,426$548,980$578,2315.3% Illinois$524,680$515,133$545,6695.9% MSU$388,845$431,373$454,2485.3% Iowa*$356,169$444,034$443,8930.0% Nebraska$214,053$191,268$235,29623.0% Indiana*$378,212$177,520$184,0963.7% * Institutional numbers represent all campus amounts for 2006. MSU Financial Data

20. 20 Total Annual Giving 20062011% Change Pennsylvania State University $165,218,147$274,832,04266% University of Nebraska $126,945,265$171,672,44835% Ohio State University $211,316,845$258,450,88622% University of Iowa $103,271,605$123,487,70320% Indiana University $250,677,402$296,822,00318% University of Michigan $257,443,519$273,142,4606% University of Minnesota $269,600,597$275,273,2052% University of Wisconsin $328,625,770$316,756,282-4% Purdue University $177,435,105$157,108,205-11% Michigan State University $147,363,851 (9th)$128,360,845 (10th)-13% (10th) Univ of Illinois - Urbana $156,748,647$128,822,182-18% As of 06/30/2011 Source: VSE Report Base year represents capital campaign effort for MSU and Purdue Private Support

21. 21 Institutions with on campus hospitals, such as U of M, include patient donor support in the above calculations Includes approximately $749M traditional endowment, $651M endowment trust and $318M MSU Foundation SOURCE: Council for Aid to Education reports 20062011% Change University of Michigan $5,652,262,026$7,834,751,73339% Purdue University $1,494,553,799$2,001,600,85534% Pennsylvania State University $1,389,600,000$1,831,100,00032% University of Iowa $832,869,000$1,058,694,90927% University of Wisconsin $1,639,014,521$2,066,958,20126% Indiana University $1,276,159,743$1,574,815,34423% Michigan State University $1,482,844,988 (6th)$1,718,100,760 (6th)16% (7th) University of Minnesota $2,287,562,061$2,514,007,30710% University of Nebraska $1,153,559,000$1,241,577,0008% Univ of Illinois - Urbana $1,252,289,994$1,132,625,790-10% Ohio State University $1,996,839,412$1,405,646,025-30% Endowment Market Value

22. 22 Involves engagement of campus stakeholder groups Board of Trustees Academic governance ASMSU COGS Refines multi-year planning focused on improving the value proposition for stakeholder University administrators Collective bargaining groups RHA State policy makers MSU Budget Process

23. Spartans Will. 23 MSU Long-Term Planning

24. 24 Academic Initiatives Creating a Campus-wide Strategy for data, technology, teaching and learning Creating a campus climate to support interdisciplinary work Closing the graduation gap Fostering a healthier campus

25. 25 An updated ten year analysis of eight critical university areas requiring long-term support because of current state and federal financial circumstances The eight categories are : – Just-in-Time Facilities Renewal – Administrative Computing (EBSP, EBSP Transition, Research Administration, SIS) – Specialized Research Space – Financial Aid – Health Care – F-RIB – Academic Quality – Energy/Other Regulatory Issues Long-Term Financial Framework

26. November-December 2013 Executive Branch July 2014 State appropriation passed January 2014 2013-14 executive budget recommendation March, April, May, 2014 Legislative hearings: House and Senate State Appropriations Timeline 26

27. June-October, 2013 Trustees act on 2013-14 budgets and 2012-13 budget request April-May, 2014 Admin/Board discussion on 2014-15 budget guidelines February - May 2014 Budget Planning Meetings Fall 2013 Budget & Planning - Strategic Issues June-July, 2014 Board action on final 2014-15 budgets June, 2014 Preliminary 2015-16 operating and capital outlay request formulated August, 2014 Administration consultation on 2015-16 budget request October, 2014 Trustees act on 2014-15 budget request MSU Internal Timeline 27

28. Formula based on budget proposal Salary increments Operating support 1% reallocation Differential Program allocations Reductions Operating Units Separately Reviewed Items Financial aid Utilities Health care Other benefits Financial framework General Fund Budget Development 28

29. 29 Budget Guidelines Summary Budget Item 2011-12 Approved 2012-13 Approved 2013-14 Proposed 2014-15 Preliminary State Appropriations (15.0)%1.6%1.82% 2% Tuition & Fees 6.9%3.6% 1.9% Lower Div 3.6% Upper Div 3.0% Lower Div 3.0% Upper Div Financial Aid10.0%5.5%4.5%4.0% Graduate Assistants2.0% Faculty Salaries2.0%* 2.25%**2.0%* Utilities5.0%4.0% 4.0%*** Health Care 5.0% 1.5%5.0% Framework-Academic Competitiveness $2.0$4.7$2.0 Balance$0 Preliminary 2013-14 budget approved by the BOT in June 2012 *Includes 1.5% general merit, 0.5% college market, and 0.5% provost market pool ** Includes 1.5% general merit, 0.75% college market, and 0.5% provost market pool ***Infrastructure financing

30. 30 Higher education Price index average approximates 2.44% for most recent five year period (through 2012) Budget Rates of Change

31. Thank You 31