January 25, 2012

TACC Focus Session

2013 Legislative Session

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Context for the 2013 Legislative Session

‣Economics/Budget Projections‣Political Landscape‣Policy Trends/Performance Funding/REV

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Economics/Budget Projections

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Funding of State Government(in billions)

2010-11 2012-13 $ diff % diff

General Revenue

(includes GR-D)

$90.2 B $81.3 B- $8.9

B9.9%

All Funds$187.5

B$173.5

B- $14 B - 7.5%

Source: Legislative Budget Board, June 2011

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Recessionary Period

Current Budget Passed

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Issues for the Next Session

Public Education:‣ Legislature provided $4.0 billion less in funding

than what current formulas would have required.‣ Numerous lawsuits are underway.The $2.3 billion

August 2013 payment is deferred to September.

Health and Human Services:‣ LBB estimates funding for Medicaid is $4.8 billion

below what law will actually require.Medicaid funding will “run out” in March of 2013.Legislature will have to tap the Rainy Day Fund for the shortfall.

Fiscal Situation for 83rd Legislature

deficit

$2.3 billion

• School Aid Deferral 2012-13

Fiscal Situation for 83rd Legislature

deficit

$4.6 billion

• School Aid Deferral 2012-13• School Aid Deferral 2014-15

Fiscal Situation for 83rd Legislature

deficit

$4.9 billion

• School Aid Deferral 2012-13• School Aid Deferral 2014-15• Unclaimed Property 2012-13

Fiscal Situation for 83rd Legislature

deficit

$5.2 billion

• School Aid Deferral 2012-13• School Aid Deferral 2014-15• Unclaimed Property 2012-13• Taxes 2012-13

Fiscal Situation for 83rd Legislature

deficit

$5.5 billion

• School Aid Deferral 2012-13• School Aid Deferral 2014-15• Unclaimed Property 2012-13• Taxes 2012-13• Taxes 2014-15

Fiscal Situation for 83rd Legislature

deficit

$5.9 billion

• School Aid Deferral 2012-13• School Aid Deferral 2014-15• Unclaimed Property 2012-13• Taxes 2012-13• Taxes 2014-15

• Fuels Tax Transfers 2012-13

Fiscal Situation for 83rd Legislature

deficit

$6.3 billion

• School Aid Deferral 2012-13• School Aid Deferral 2014-15• Unclaimed Property 2012-13• Taxes 2012-13• Taxes 2014-15

• Fuels Tax Transfers 2012-13• Fuels Tax Transfers 2014-15

Fiscal Situation for 83rd Legislature

deficit

$11.1 billion

• School Aid Deferral 2012-13• School Aid Deferral 2014-15• Unclaimed Property 2012-13• Taxes 2012-13• Taxes 2014-15

• Fuels Tax Transfers 2012-13• Fuels Tax Transfers 2014-15• Rainy Day Medicaid 2012-13

Fiscal Situation for 83rd Legislature

deficit

$20.1 billion

• School Aid Deferral 2012-13• School Aid Deferral 2014-15• Unclaimed Property 2012-13• Taxes 2012-13• Taxes 2014-15

• Fuels Tax Transfers 2012-13• Fuels Tax Transfers 2014-15• Rainy Day Medicaid 2012-13

• Structural Deficit ($9 B est.)

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Political Landscape

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Policy Trends/Performance Funding/REV

2020

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Reaching Escape Velocity

(REV)

The TACC Student Success

Movement

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Goals to Reaching Escape Velocity‣Creation of a movement, not an

initiative‣Organic movement owned by the colleges

‣Comprehensive movement to address complex and interrelated issues

‣Sole focus of the movement is to improve student success

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Components of the REV Movement‣Structure for scanning, inventorying,

and evaluating current initiatives and promising practices to improve student success

‣Universally accessible infrastructure for success

‣Focus on scaling best bets for success‣Communication of REV activity to

multiple audiences‣Policy and Advocacy‣Continuous improvement and

commitment to continued innovation

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Internal Context‣TACC Role•TACC Staff•External Lobbyist•JACC-PAC‣Stakeholders•Advocates Network•Trustees and CCATT•TCCTA and other internal groups•External interest groups

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The Ask - 2013 Legislative Session

‣Report on Formula, Benefits, etc.

‣Discussion

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General RevenueState of Texas

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Summary

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Other Funds in HB 182nd Texas Legislature

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All Funds to CCs: 2010-11 biennium

76%

14%

8% 76%14%8%

<1%<1%

<1%

<1%

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All Funds to CCs: 2012-13 biennium

84%

10%5% 84%

10%5%

<1%<1%

0%

<1%

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Formula & Employee Benefits

$1.8 B $1.7 B

$323 M$198 M

$202 M

$104 M

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Unrestricted Funds: 1975-2010

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Formula Funds

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Instructional Formula Funds(in billions)

$1.737 billion for 2012/2013 biennium Compared to $1.844 billion for 2010/2011 biennium A decrease of $107.7 million--5.8%

bil

lion

20.4% increase

14.9% increase

Base Year Contact Hours(in millions)

mil

lion

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Appropriation per Contact Hour (annual)

21.8% decrease

$ p

er

con

tact

hou

r

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Recommendations of CTC Formula Advisory

Committee

Community College Formula• Formula system put in place in 1974

• The primary mechanism for state funding of community colleges since that time.

• 3 components:‣ Annual cost study (RFOE)‣ Contact hour as the basic unit of

enrollment‣ Formula rates provide the

differentiated costs among instructional programs

• CC Formula = Base Year Contact Hours X Formula Rates (26 Instructional Categories)

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Community College Formula

Formula Rates

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Report of Fundable Operating Expenses

Percent of RFOE (full formula)Report of Fundable Operating Expenses

Percent of THECB Recommendation

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Benefits

Group Health Insurance (HEGI)Retirement (ORP/TRS)

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Group Health Insurance(in millions)

38.6% decrease

mil

lion

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Retirement (TRS & ORP)(in millions)

48.2% decrease

mil

lion

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Reallocation of Formula FundsFY 2013

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Strategies for Messaging

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People don’t want more information. They are up to their eyeballs in information.

They want faith—faith in you, your goals, your success, in the story you tell…

Once people make your story their story, you have tapped into a powerful force.

—Annette Simmons

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Strategies for Engagement