HOUSE APPROPRIATIONS COMMITTEE Louisiana Board of Regents March

HOUSE APPROPRIATIONS COMMITTEE Louisiana Board of Regents March 31, 2011

Louisiana Public Postsecondary Education Board of Regents LOUIS LSU System LSU A&M UNO LSU - Shreveport LSU - Alexandria LSU - Eunice LSU - Law Center LSU - Ag. Center LSUHSC-NO LSUHSC-Shreveport Pennington LONI Southern System SU A&M SU Law Center SU Ag. Research Ctr. SU - New Orleans SU - Shreveport Proprietary Schools LUMCON U of LA System Grambling LA Tech Mc. Neese Nicholls Northwestern Southeastern U of L - Lafayette U of L - Monroe Learning Centers LCTCS Baton Rouge CC Bossier Parish CC Delgado CC Nunez CC River Parishes CC South LA CC LA Delta CC Fletcher Technical CC SOWELA Technical CC 7 Regional Technical Colleges LOSFA 2

Annual Enrollment for Public Institutions 225, 000 200, 000 175, 000 150, 000 125, 000 100, 000 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 3

36, 000 35, 000 34, 000 33, 000 32, 000 17% Increase Certificates and Degrees Awarded 344% - Certificates 28% - Diplomas 24% Associate Degrees 6% Baccalaureate Degrees -10% Master Degrees 11% Doctoral Degrees 31, 000 30, 000 29, 000 28, 000 27, 000 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 4

BOARD OF REGENTS FOCUS Three Main Goals • To increase the education attainment of its citizens; • To invest strategically in university research; and • To become a more efficient and accountable enterprise. 5

State/Student Share 100% 90% 80% 70% 60% 50% Tuition and Fees 40% State Funds 30% 20% 10% 0% FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 6

Constitutional Authority Board of Regents: (Article VIII, Section 5 [D][4]) The Board of Regents is required by the Louisiana Constitution to develop a funding formula as a component of the Master Plan for Public Postsecondary Education: “At a minimum, the plan shall include a formula for equitable distribution of funds to the institutions of postsecondary education. ” Management Boards: (Article VIII, Section 12) Appropriations for the institutions of higher education shall be made to their managing boards. The funds appropriated shall be administered by the managing boards and used solely as provided by law. 7

Formula Implementation 8

History of Development of Formula • Act 1465 of 1997 set performance-based budgeting requirements – Core objectives: total enrollment, minority enrollment, retention (campus and statewide) and graduation rates • 2007 Formula Workgroup recommendation – Core objectives: focus existing and new dollars on performance and results, make the formula more sensitive to missions of institutions, make cost metric values in the formula analysis more precise and current • 2011 Proposed Formula – Core objectives: align with GRAD Act; set two-year and four-year institutions equidistant from their respective peer groups; end of course counts will be used to drive cost calculations; hold harmless metric to establish maximum annual funding loss 9

Formula Implementation Rates 110% 104. 3% 106. 3% 95. 2% 90% 76. 6% 80. 5% 80% 67. 4% 70% 60% ect ed 1** ** Includes ARRA Funds (area shaded in red shows impact of ARRA funds) 2 P 1 -1 201 Fiscal Year roj 0 -1 9 -1 200 201 0** 9 8 -0 200 8 7 -0 200 6 -0 7 50% 10

Total State Funds for All Formula Institutions Four-Year Institutions Cost Calculation Performance Two-Year Institutions* Cost Calculation Performance *Includes all 2 -year institutions 11

Funding Formula 85% Distribution Based on Cost Calculation Student Credit Hours funded based on SREB peer faculty costs comparisons by discipline Funds on End of Course instead of 14 th class day except for the technical colleges Follows best practices trends of other states Responds to the Postsecondary Education Review Commission (PERC) 12

Funding Formula 25% for Performance: 15% SGF 10% Tuition Authority Performance funds retained through successful GRAD Act performance Standardizes definition of performance Tracked on one set of agreed upon Student Success Metrics 13

Funding Formula Path Forward Adopt legislative recommendation for phase-in of the funding formula so that campuses can manage funding shifts Sustain formula for multi-years to allow performance to take root Adopt process to address loss of performance funding (10 percent tuition and performance dollars) and rehabilitation plan requirements as a result of failed GRAD Act performance Review future need to increase and expand GRAD Act performance measures Adopt statewide implementation of End of Course measure 14

FY 2011 -12 Executive Budget 15

Executive Budget Total Change Existing Budget FY 2010 -11 to FY 2011 -12 Annualize FY 2010 -11 Mid-year Expenditure Reduction (34. 7) Net Adjustments to Hospitals (UCC, UPL, etc. ) 19. 0 Increase to TOPS 39. 2 Decrease 8 G Support Fund Budget (Based on REC) (6. 2) Annualize FY 2010 -11 GRAD Act Revenues 44. 5 Full Time Tuition for 12 to 15 hours 74. 5 Operational Fee 13. 0 LCTCS Stabilization Fee 10. 7 Total 160. 0 16

Executive Budget ARRA Funds Substitution Remove ARRA from State Funds (189. 4) Revenue from FY 2011 -12 3 -4 -5 Tuition Increase 37. 4 Revenue from FY 2011 -12 GRAD Act Tuition Increase 53. 3 Increase HIEF Statutory Dedication (Self Generated Carry Forward) 97. 2 Orleans Parish Fund to Delgado 1. 5 Total - 17

Executive Budget 2011 -12 Executive Budget Adding $1. 29 B transfer of all State General Funds to Board of Regents. 18

Executive Budget 2011 -12 Executive Budget Annualization of FY 10 -11 Mid-Year expenditure reduction. This reduction is being allocated across the total State General Funds base. 19

Executive Budget 2011 -12 Executive Budget Multi-step process for addressing loss of American Recovery and Reinvestment Act of 2009 (ARRA). Means of financing substitution: replacing ARRA with state general funds. 20

Executive Budget 2011 -12 Executive Budget This reduction is being allocated across the total State General Funds base of all institutions that received ARRA funds in FY 09 and FY 10. 21

Executive Budget 2011 -12 Executive Budget Higher education’s funding level reflects $97. 2 million in tuition funding freed up and carried forward from FY 2010 -2011. These funds will be allocated back to the campuses that generated the tuition revenue being carried forward. 22

Executive Budget 2011 -12 Executive Budgeted Projected Self Generated Increases FY 11 -12 3 -4 -5 FY 11 -12 GRAD Act *Tuition Cap 12 to 15 hours *Operational Fee Index Change *LCTCS Stabilization Annualization of FY 10 -11 GRAD Act *Subject to legislative approval $37. 4 m $53. 3 m $74. 5 m $13. 1 m $10. 7 m $46. 6 m 23

Executive Budget 2011 -12 Formula Funding Base 24

Executive Budget 2011 -12 Preliminary Formula Funding Distribution Model 25

HB 1 Postsecondary Education TO FY 11 -12 27, 703 (TO) Difference 6004 Non SGF Funded Positions + 862 Vacancies 26

ACT 1000 Goal: 5% annual personnel reduction Baseline: FY 07 -08 Overall Decline: 6. 17% FY 08 -FY 11 27

Average Salaries of Full-Time Instructional Staff Average Full-Time Instructional Faculty Salaries by Rank at Four-Year Institutions, 2009 -10 $ 120, 000 100, 000 80, 000 60, 000 40, 000 20, 000 0 LA SREB Professor Associate Professor 68, 778 73, 706 $ 91, 676 $ 102, 686 Assistant Professor 58, 140 62, 024 Instructor 42, 529 44, 173 All 65, 474 73, 450 Average Full-Time Instructional Faculty Salaries by Rank at Two-Year Institutions, 2009 -10 $ 80, 000 60, 000 40, 000 20, 000 LA SREB $ $ Professor 71, 022 66, 960 Associate Professor 54, 930 55, 023 Assistant Professor 52, 312 49, 465 Instructor 42, 490 43, 261 Source: SREB State Data Exchange All 50, 587 51, 799 28

GRAD ACT 29

GRAD ACT 35 participating institutions Annual Review process underway Management Boards (April) Regents Annual Review (May-June) 30

GRAD Act Performance Objectives • Student Success – Increase graduation rates, completers, and partner with high schools • Articulation and Transfer – Increase student retention • Workforce and Economic Development – Alignment with workforce needs • Institutional Efficiency and Accountability – Align program needs regionally and by demand 31