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Presentation to thePresentation to the
Senate Budget and Taxation Senate Budget and Taxation CommitteeCommittee
University System of Maryland University System of Maryland
January 15, 2004
2
Regents Effectiveness and Efficiency Initiative
• A University-wide commitment to review the most fundamental aspects of the academic enterprise and to improve total organizational performance
• Willingness to examine ideas, comments, and criticisms from all corners
3
Emerging E&E Transformation Themes
• Reduce the cost structure
• Create strategic reallocation model for enrollment management & growth
• Alternative financing approaches for core activities
• Maintain quality
4
Specific Tasks in Support of E&E Themes
In Process• Faculty workload audit & policy
review• Presidents workgroup to plan for
expansion of on-line education• Presidents workgroup on
collaboration & consolidation• Hagerstown Center in January
2005• RFP for acquisition of outside
consulting services• Expand scope of current
efficiency system
Completed Campus utilization study Review of property & equipment
assets Executive compensation &
administrative staffing levels
5
Administrative Salaries
• Salaries of senior executives– 70th percentile of national comparison groups for
comparable titles• Salaries of managers & supervisors
– 63rd percentile of Eastern region for comparable titles
6
Administrative Staff
• Size of administrative staff– System institutions have a significantly better efficiency
rating vs peer institutions nationally
– Overall, USM institutions serve 30% more students per staff member (97.1 students to 1 staff) than their peers (67.7 students per 1 staff)
– 9 of 11 institutions have fewer staff per 100 students vs peer institutions nationally
– System’s Central Office ranks 28th out of 47 Systems in operating budget per headcount student (FY 2001); 17th out of 19 in number of staff per headcount student (FY 1997)
7
The Budget in Brief
The budget crunch in public higher education is a national phenomenon causing major challenges for quality,
access and affordability.
8
FY 2004 Cost Containment Actions
Expenditure reductions $120M (58%)
Total problem $206M & 787 positions eliminated
Tuition increases $75M (37%)
Other revenue $11M (5%)
9
USM Position Summary FY 2002 – FY2004
• State 14,532 13,983 13,824 (5%)
• Non-state 4,958 5,309 5,263 6%
• Total 19,490 19,292 19,087 (2%)
FY 2003FY 2002 FY 2004 % change
FY 2004 position level reduced by 787 from original budget request.
10
FY 2005 Current Services Budget
• State appropriation level-funded at $746.2M• Estimated mandatory costs included in budget - $71.3M• Selected programmatic needs - $7.7M• Costs not included:
– Health insurance inflation (per DBM instructions)– Enrollment growth
• Balancing the CSB– Effectiveness & Efficiencies initiatives & additional budget
reductions - $25M– Tuition increases - $55M
11
USM – State Supported BudgetWhere the Dollars Come From
FY 2000 FY 2005
Tuition & Fees (33%)
USM State Appropriation (55%)
Tuition & Fees (46%)
USM State Appropriation (43%)
Other Unrestr. & Restricted (12%)
Other Unrestr. & Restricted (11%)
12
State Dollars per USM Student
12
6000
6500
7000
7500
8000
8500
9000
9500
FY 92 FY 94 FY 96 FY 98 FY 00 FY 02 FY 04 FY 05
$ pe
r F
TE
stu
dent
13
Funding Guideline Achievement
50%
60%
70%
80%
90%
100%
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05
14
Tuition
Maryland’s in-state resident tuition is high ― we are 6th in the nation ― and affordability
is a serious concern. Stabilizing tuition is an
imperative, but increasing state funding is as well.
15
Top 10 states for Highest TuitionResident Undergraduate
1. Vermont $ 8,389
2. New Hampshire 7,744
3. Pennsylvania 7,448
4. New Jersey 7,206
5. Ohio 6,878
6. Maryland 6,246
7. Massachusetts 6,204
8. Delaware 6,191
9. Michigan 6,004
10. Connecticut $ 5,869
16
-10
-5
0
5
10
15
20
1990 1993 1996 1999 2002 2005
State % change Resident Tuition % increase
State Funding &Tuition RelationshipHistorical Pattern
% C
han
ge
17
State Wealth vs. State Spending on Higher Education
Per capita personal and disposable personal income - MD 4th
State general funds for higher education:• per $1,000 personal income – MD 38th
• per capita – MD 27th
• per student – MD 23rd
18
Tuition - New Regents Policy
• Increased predictability for students and families• Increased institutional flexibility to propose tuition
rates based on:– Mission– Market opportunities and constraints – Pricing strategies
• An integrated four year plan with:– Enrollment projections – Resource needs– Funding Guideline achievement
19
Enrollment -Joint Committee Report
“… the USM & Maryland's community colleges should respond as to the State's ability to meet enrollment growth and workforce demands,
while ensuring high quality, access and affordable tuition …”
20
USM Headcount Enrollment
• FY 1999 106,773• FY 2002 119,300• FY 2004 125,939
• FY 2005
– Current Services Budget 127,497
– Separate List 130,269
• FY 2008 141,060
• FY 2011 153,307
32%
44%
20-22%
2121
Tho
usan
ds
1997 1999 2001 2003 2005 200755
60
65
70
Actual
Projected
Source of Enrollment DemandMaryland High School Graduates 1998 -2007
22
Enrollment Strategies
What the Community Colleges & the USM will do together:
• Maximize current operating capacity• Community College / USM collaborations (UMUC)• Regional Centers• Complete associates degree before transferWhat the State can do:• Need-based aid• Predictable & affordable tuition• Predictable State funding
23
The USM and the Maryland Economy
Higher Education is the raw material of the
new economy
Salary and Degree Level & Unemployment Rates
Average Annual Earnings (000s of $)
0 20 40 60 80 100 120
Source: U.S. Census Bureau, Current Population Survey, Annual Demographic Survey, March Supplement, Table PINC-03, March 2003 (for calendar 2001, individuals ages 25 and over).
Less than H.S.
H.S. graduate
Some college,no degree
Associate degree
Bachelor's degree
Master's degree
Doctorate
Professional
24
< 2%
< 2%
< 2.5%
< 2.5%
4%
4+%
5+%
8+%
Research DollarsPer Capita by State
100
150
200
250
300
MD MA AK NC HI IA UT NM CO CA
Source: Milken Institute
US
$ P
er C
apit
a
25
26
University’s Role in Job Creation and Enterprise Development
• Maryland is ranked 1st nationally in % of population with college+ education
• Our State is ranked 2nd nationally in knowledge jobs
• This State scores highest nationally in Workforce Development
• Maryland is ranked 5th among the states in its capacity as a Knowledge Economy
Source: New Economy Index
27
Recent Economic Investments
• Despite tough times …– Governor and General Assembly continue to
support a strong capital facilities program– Governor funded, and General Assembly
approved, Sunny Day grants for major research parks at UMCP and UMB
– Governor provided $500,000 from TEDCO for technology transfer projects