1. 1 Fiscal 2003-04 Budget Parameters Prepared for University Senate September 4, 2003

2. 2 Items for Discussion Enrollment Information Tuition Information Appropriation Information Changes in Funding Formula Planning for Budget Reduction Budget Reduction Targets

3. 3 Enrollment at Mansfield 10% growth over past 3 years Resident enrollment “turn around” Budgeted growth for 2003-04 at 1% Early enrollment observations for fall 2003

4. 4 Semester Tuition Rates for 2003-04 2002-032003-04Change Undergrad Resident Non-Res Good-N 2,189 5,473 3,284 2,299 5,748 3,794 5.0% 15.5% Graduate Resident Non-Res 2,627 4,204 2,759 4,415 5.0%

5. 5 Non-Resident Tuition BOG policy – ensure non-residents are not subsidized by appropriation Enrollment plan calls 20% non-resident enrollment; currently at 24% Good Neighbor tuition increased from 150% of resident tuition to 165% Regular non-resident tuition is 250% of resident tuition

6. 6 2003-04 Semester Cost of Attendance - MU ResidentGood-NNon-Res Tuition 2,299 3,794 5,748 Fees 662 687 Room&Bd 2,624 TOTAL 5,585 7,105 9,059

7. 7 FY 03-04 State Appropriation 5% reduction in System base 5% reduction in System line items Performance funding at 3% Net Campuses E&G reduction of 6% The “size of the pie” gets smaller

8. 8 Funding Formula Appropriation distributed to campuses based on a funding formula Formula determines the “slice of pie” for each campus Prior formula in place for 7 years Formula has been under review for 3 years Formula is being changed

9. 9 Funding Formula Changes Based only on resident enrollment Recognizes enrollment by level and by normal versus high-cost programs Recognizes plant size and complexity Does not recognize tuition – bases allocation on total need versus unmet need Little recognition for economies of scale

10. 10 What is the Impact? Size becomes more important The 9 smallest have appropriation reductions, the 5 largest have increases Cheyney -16.2%; Clarion -15.4%; California – 14.0%; and Mansfield –13.5% have the largest reductions Our “slice of the pie” gets smaller

11. 11 Formula Comparison

12. 12 MU Appropriation Impact 02-03 appropriation $17,434,513 03-04 Actual Phase-in $15,945,182 04-05 Estimate Phase-in $15,513,438 05-06 Estimate Phase-in $15,081,693 Total Appropriation loss of 13.5% based upon same level of appropriation.

13. 13 The Revenue Squeeze Due to the change in appropriation methodology by the State System, an estimate of total appropriation and tuition rate increases, and an estimate of expenditure increases – we conclude that:  Expenses will exceed revenue by $1.7 M in 2003-04  Expenses will exceed revenue by $2.7 M in subsequent years

14. 14 Mansfield’s Challenge The Challenge: How do we reduce expenditures by $2,760,000 annually? MU Response: Put in place a budget planning process to develop a comprehensive University plan that can be implemented by July 1, 2004, yet permit us to operate effectively while serving a growing student body.

15. 15 The Process Positions temporarily frozen until plan is in place Targets established for divisions Divisions develop recommendations – focus on ways of doing business differently Cabinet reviews plan University plan developed by late October Plan implemented by July 1, 2004

16. 16 Reduction Targets Classroom Instruction Support and Other Areas Transfers and Mandates 0.0% Operations 6.0% Personnel 5.0% 11.5%

17. 17 Reduction Target Dollars DivisionReduction Target President 15,300 Admin and Finance 551,400 Student Affairs 257,700 Development 144,200 Provost – Non Instruction 671,600 Provost – Instruction 967,200 Miscellaneous 160,600 Total 2,768,000

18. 18 Some Perspective Applies to E and G – not Auxiliaries, restricted grants, nor capital projects Reduction is 7% of entire E and G budget We still have 93% of budget Commitment to an open process Commitment to future growth and progress