5-Year Budget Outlook

Postsecondary Education Review Commission

Impact of Shifting Enrollments on Resources in Louisiana

September 29, 2009

5-Year Budget Outlook5-Year Budget Outlook

2

9.4 8.1 8.2 8.5 8.8

9.4 8.1 9.1 10.5 10.7

.9

1.9

1.9

Source: Louisiana Division of Administration

Postsecondary Education “Budget” Outlook and Issues

• FY2009-10, the current year

– Effective reduction of $120+ million in direct operational funding between State fund reductions and federal stimulus replacement, an 8.7% effective reduction in “State” support but only a 3.3% reduction in overall support

• FY2010-11, next fiscal year

– Uncertainty of outlook

– Recent communication from the Administration to the Postsecondary Education Review Commission projecting a minimum $146 million additional funding reduction

• FY2011-12, the following fiscal year

– Projected “big budget problem”, a State budget shortfall projected at almost $2 billion

– Federal stimulus funding ends

Louisiana Postsecondary Education FundingFY2009-10

By Means of Financing, in Millions of $

State General Fund $1,266.0

ARRA Funds $189.7

Statutory Dedicated Funds $158.7

Self Generated Revenue $820.4

Interagency Transfers $435.9

Federal Funds $177.6

Total $3,048.3



State General Fund $1,266.0

ARRA Funds $189.7Statutory Dedicated Funds $158.7Self Generated Revenue $820.4Interagency Transfers $435.9Federal Funds $177.6

Total $3,048.3

LOSFA (TOPS, Go Grant and Dual Enrollment)State General Fund $154.3ARRA Funds $0.0Statutory Dedicated Funds $22.0Self Generated Revenue $0.1Interagency Transfers $2.0Federal Funds $81.5

Total $259.9

Postsecondary Education without LOSFA & Student AssistanceState General Fund $1,111.7ARRA Funds $189.7Statutory Dedicated Funds $136.7Self Generated Revenue $820.3Interagency Transfers $435.8Federal Funds $96.1

Total $2,788.4

Louisiana Office of Student Financial Assistance

and Student Financial Assistance

• TOPS - $130 million

• Go Grant - $34 million

• Dual Enrollment - $5.5 million

Source: Louisiana Board of Regents

Louisiana Postsecondary Education FundingFY2008-09 and FY2009-10


Postsecondary Education Without LOSFA (TOPS, Go Grant & Dual Enrollment)

FY2008-09 After Mid-Yr Reductions FY2009-10 $ Change % Change

State General Fund $1,425.0 $1,111.7 -$313.3 -22.0%ARRA Funds $0.0 $189.7 $189.7"Net" State General Fund Reduction with Stimulus -$123.6 -8.7%Statutory Dedicated Funds $138.1 $136.7 -$1.4 -1.0%Self Generated Revenue $771.5 $820.3 $48.8 6.3%Interagency Transfers $425.6 $433.9 $8.3 2.0%Federal Funds $103.0 $96.1 -$6.9 -6.7%

Total $2,863.2 $2,788.4 -$74.8 -2.6%

Source: Louisiana Board of Regents

Louisiana Postsecondary Education FundingFY2008-09 and FY2009-10


Postsecondary Education Without LOSFA (TOPS, Go Grant & Dual Enrollment)

FY2008-09 After Mid-Yr Reductions FY2009-10 $ Change % Change

State General Fund $1,425.0 $1,111.7 -$313.3 -22.0%ARRA Funds $0.0 $189.7 $189.7"Net" State General Fund Reduction with Stimulus -$123.6 -8.7%Statutory Dedicated Funds $138.1 $136.7 -$1.4 -1.0%Self Generated Revenue $771.5 $820.3 $48.8 6.3%Interagency Transfers $425.6 $433.9 $8.3 2.0%Federal Funds $103.0 $96.1 -$6.9 -6.7%

Total $2,863.2 $2,788.4 -$74.8 -2.6%

Louisiana Postsecondary Education State Funds

Final Budget, FY2008-09

1,040.9

1,263.7

66.2 49.0

122.8 127.7 126.8 128.4 128.1 157.9 155.2 138.1

1,433.3 1,425.0

1,043.6 1,044.0

843.9866.5

927.0961.5

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09

State General Fund Statutory Dedicated

Prior to mid-yr cut 1,476


Final Adopted Budget, FY2009-10

1,040.9

1,263.7

66.2 49.0

122.8 127.7 126.8 128.4 128.1 157.9 155.2 138.1 136.7

961.5927.0

866.5843.9

1,044.01,043.61,111.7

1,425.01,433.3

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10



$313.4M General Fund Reduction

after 08-09 mid-yr reduction


Final Adopted Budget, FY2009-10

1,040.9

1,263.7

66.2 49.0

122.8 127.7 126.8 128.4 128.1 157.9 155.2 138.1 136.7

961.5927.0

866.5843.9

1,044.01,043.61,111.7

1,425.01,433.3

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10



Federal Stimulus $189.7M

Stimulus Supported

Base $1.3 B

Louisiana Postsecondary Education State FundsFinal FY2009-10 Budget Status and Projected for FY2010-11

965.7M

840.9M

865.1M 934.5M

963.1M 1.04B 1.06B 1.03B

1.12B

1.42B 1.41B

1.11B

130.2M 89.0M 76.8M

146.5M 142.6 137.9M 147.5M 137.0M 171.4M 163.8M 138.2M 136.7M

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11

General Funds Stat Ded Funds

Minimum $146M SGF Reduction projected for FY10-11


965.7M

840.9M

865.1M 934.5M

963.1M 1.04B 1.06B 1.03B

1.12B

1.42B 1.41B

1.11B

130.2M 89.0M 76.8M

146.5M 142.6 137.9M 147.5M 137.0M 171.4M 163.8M 138.2M 136.7M

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11





965.7M

840.9M

865.1M 934.5M

963.1M 1.04B 1.06B 1.03B

1.12B

1.42B 1.41B

1.11B

130.2M 89.0M 76.8M

146.5M 142.6 137.9M 147.5M 137.0M 171.4M 163.8M 138.2M 136.7M

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11



Stimulus Supported

Base$1.155B


Louisiana Postsecondary Education State FundsFinal FY2009-10 Budget Status and Projected through 2010-11

1,040.9

1,263.7

961.5927.0

866.5843.9

1,044.01,043.6 965.7

1,111.7

1,425.01,433.3

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11


1,301 with Stimulus

1,155 with Stimulus

146M SGF Reduction


965.7M

840.9M

865.1M 934.5M

963.1M 1.04B 1.06B 1.03B

1.12B

1.42B 1.41B

1.11B

130.2M 89.0M 76.8M

146.5M 142.6 137.9M 147.5M 137.0M 171.4M 163.8M 138.2M 136.7M

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11


$459.3M General Fund Reduction from 08-09 Level (after $55M mid-year cut)

$146M SGF Reduction



FY2009-10State General Fund $1,111.7ARRA Funds $189.7Statutory Dedicated Funds $136.7Self Generated Revenue $820.3Interagency Transfers $433.9Federal Funds $96.1

Total $2,788.4

Specialized Units & Boards

State General Fund $334.8

ARRA Funds $35.6




Federal Funds $96.1

Total $1,090.9

4-Year and 2-Year Institution Funding Only

State General Fund $776.9

ARRA Funds $154.1




Federal Funds $0.0

Total $1,697.5

With Stimulus Without Stimulus $976.0 $821.9

Institutions Health sciences centersAgricultural centersLaw centersStand-alone research centersBoards and system offices

Four Year/Two Year Institution Enrollment Mix Analysis

FY2008-2009 Full-Time Equivalent (FTE) Enrollment:

Existing Mix of Enrollment FY2008-09

FY2009-10 Final Adopted Budget - "State & Stimulus

Funds"

State and Stimulus Funding

Rates

FY2009-10 Final Adopted Budget -

"State Funds"

State Funding

Rates Only

Four Year Institutions Enrollment 122,608 72.9% 781,159,593$ 6,371$ 656,078,087$ 5,351$

Two Year Institutions Enrollment * 45,582 27.1% 194,877,887$ 4,275$ 165,852,687$ 3,639$

Total FY 2008-2009 FTE Enrollment 168,190 100.0% 976,037,480$ 5,803$ 821,930,774$ 4,887$

Stimulus Funding Loss (154,106,706)$

Difference between 4-Yr and 2-Yr Rates 1,712$

* "Two Year" Institution enrollment and funding include the LTC.



Existing Mix of Enrollment

FY2008-09

FY2009-10 Final Adopted Budget

- "State & Stimulus Funds"

State and Stimulus Funding

Rates

FY2009-10 Final Adopted Budget -

"State Funds"

State Funding

Rates Only

FY2007-08 SREB

Average State

Funding Rates

Four Year Institutions Enrollment 122,608 72.9% 781,159,593$ 6,371$ 656,078,087$ 5,351$ 7,184$

Two Year Institutions Enrollment * 45,582 27.1% 194,877,887$ 4,275$ 165,852,687$ 3,639$ 4,751$

Total FY 2008-2009 FTE Enrollment 168,190 100.0% 976,037,480$ 5,803$ 821,930,774$ 4,887$

Loss of Stimulus (154,106,706)$

Difference between 4-Yr and 2-Yr Rates 1,712$ 2,433$



Two Year Institution Enrollment Share:

44.0%



FY2008-09

FY2009-10 Final Adopted Budget - "State Funds"

State Funding

Rates Only

FY2007-08 SREB

Average State

Funding Rates

Alternative Mix

Resulting Enrollment

Adjusted Enrollment

SREB Average Mix Funded at FY09-10 State

Fund Rates

Four Year Institutions Enrollment 122,608 72.9% 656,078,087$ 5,351$ 7,184$ 56.0% 94,187 -28,421 503,994,734$

Two Year Institutions Enrollment * 45,582 27.1% 165,852,687$ 3,639$ 4,751$ 44.0% 74,004 28,421 269,264,491$

Total FY 2008-2009 FTE Enrollment 168,190 100.0% 821,930,774$ 4,887$ 100.0% 168,190 0 773,259,225$

Loss of Stimulus (154,106,706)$ (48,671,549)$

Difference between 4-Yr and 2-Yr Rates 1,712$ 2,433$



Two Year Institution Enrollment Share:

44.0%



FY2008-09Alternative

MixResulting

EnrollmentAdjusted

Enrollment

SREB Average Mix Funded at FY09-10 State

Fund Rates

FY2007-08 SREB

Average State

Funding Rates

SREB Average Mix Funded at SREB Funding

Rates

Four Year Institutions Enrollment 122,608 72.9% 56.0% 94,187 -28,421 503,994,734$ 7,184$ $676,636,224

Two Year Institutions Enrollment * 45,582 27.1% 44.0% 74,004 28,421 269,264,491$ 4,751$ $351,591,689

Total FY 2008-2009 FTE Enrollment 168,190 100.0% 100.0% 168,190 0 773,259,225$ $1,028,227,913

(48,671,549)$ 206,297,139


• Differences in funding approaches between “old” and “new” formulas are significant

• New formula sets values for student credit hour production specifically for each institution, by level of student and discipline of the student credit hour

• Differentials remain in values based upon “type” of institution and its specific costs (SREB category)

• State/student shares of cost are function of “type” of institution (generally 60% or higher share for State @ 4-Yr vs. 70%+ State share @ 2-Yr.)

Analysis of Shifting Enrollment

Analysis of Shifting Enrollment• Analysis is based upon overall enrollment, not just entering freshmen

cohort

• Time will be required to “shift” enrollment in substantial amounts

• Nature of “shift” in mix will depend upon:– Overall growth in enrollment

– Degree of stability in 4-year enrollment

– Degree of growth in 2-year enrollment

• Possible Causes of “shift”– Admissions standards

– Growth in additional students to 2-year institutions

– Enrollment caps at 4-year institutions

– Significant change in “pricing” of respective types of institutions

• “Savings” potential from shifting enrollments:– SREB rates vs. Actual funding rates

– Impact of new formula approach

– Lowest funded 4-year institutions are likely to yield the most significant areas for potential shifts of enrollment, thus less “savings” potential

Documents

5-Year Budget Outlook