presentation to appropriations and revenue...
TRANSCRIPT
Presentation to Appropriations and Revenue Committee
Budget Review Subcommittee on Postsecondary Education
Robert L. King, PresidentKentucky Council on Postsecondary EducationJanuary 18, 2018
CPE’s Role in Higher Education Finance
2
• Biennial Budget Recommendation• Tuition and Fee Setting• Performance Funding Model
Biennial Budget Recommendation
3
Biennial Budget Recommendation
4
• Directed in statute to make biennial budget request for postsecondary education 164.020(9)
• Request components:1) Institutional Operating Funds2) Trust Funds3) Capital Projects4) Agency Operating Funds
• Collaborative process: Council members and CPE staff Campus presidents and chief budget officers
2018-20 Budget Recommendation
5
Funding Component Fiscal 2018‐19 Fiscal 2019‐20
Operating Funds
Performance Funding $18,937,500 $36,512,200
Special Initiatives
KERS Increases $47,247,500 $47,247,500
Competitive Workforce Initiative $3,561,100 $5,935,100
KSU Land Grant Match 290,000 290,000
Funding Component StateBond Funds
AnnualDebt Service
Trust Funds
Bucks for Brains $90,000,000 $8,217,000
Capital Projects
Asset Preservation $600,000,000 $50,903,000
Decade of Funding Cuts
Kentucky Council on Postsecondary Education 6
$8,699$8,438
$7,796$7,251
$6,854$6,437
$6,191 $6,037 $5,940 $6,003 $5,848
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000(E) 2
007‐08
(R) 2
007‐08
2008
‐09
2009
‐10
2010
‐11
2011
‐12
2012
‐13
2013
‐14
2014
‐15
2015
‐16
2016
‐17
Kentucky Public Postsecondary SystemNet General Fund Appropriations per Full‐Time Equivalent Student
Fiscal Years 2007‐08 through 2016‐17Dollars
(per Student)Constant 2016 Dollars
(E) = Enacted; (R) = Revised.Sources: KentuckyBudget of the Commonwealth, multiple biennia; Commonfund Institute, HEPI; CPE, Comprehensive Database.
($2,851)‐32.8%
Equates to($428.7 M)
Focus on Other Priorities
Kentucky Council on Postsecondary Education 7
21.1%29.9%
21.0%
4.4%
86.9%
‐14.8%
7.8%
‐20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
State Budget CriminalJustice System
Education HumanServices
Medicaid PostsecondaryEducation
All Other
Commonwealth of KentuckyChange in State General Fund Appropriations
Between Fiscal Years 2007‐08 and 2017‐18
Source: Kentucky Budgets of the Commonwealth, various years.
1 Criminal Justice includes the Unified Prosecutorial System, Justice and Public Safety Cabinet, and the Judicial Brach.2 Education includes the Department of Education, Teachers' Retirement System, School Facilities Construction Commission, and Education Professional Standards board.3 Human Services includes the Health and Family Services Cabinet (net of Medicaid).
1
2 3
Most States Reinvesting
44.6%
11.6%
‐4.2% ‐27.3%
MT
UT
MA CO SC OR CA ID WY SD HI
TX FL NE
MD RI IN NY
OH IA
USA MS
WA CT NM
MN
NH VA DE
MO
ME KS AL NC AK GA NJ
WI
TN AR NV MI
WV VT KY OK LA AZ
Source: “Grapevine” Report, Center for the Study of Education Policy and the Association of State Higher Education Executive Officers, 2016.
Kentucky Council on Postsecondary Education 8
Change in State Support for Higher EducationBetween Fiscal Years 2010‐11 and 2015‐16
.
Kentucky Council on Postsecondary Education 9
Shifting of Responsibility (Who Pays)
71% 70%67%
64% 63%61% 60%
56%55%
53%50%
49%
48% 46%44%
42%40%
38%35%
33%32%
29% 30%33%
36% 37%39% 41%
44%45% 47%
50%
51% 53% 54%56%
58%60%
63%65%
67%69%
20%
30%
40%
50%
60%
70%
80%
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Net General Fund Share Net Tuition and Fee Revenue Share
Kentucky Public Postsecondary SystemChange in State and Student Shares of Total Public Funds
Fiscal Years 2001‐02 through 2021‐22
Sources: Kentucky Budget of the Commonwealth; CPE Comprehensive Database.
Projected
Tuition and Fee Setting
10
Tuition and Fee Setting
11
• Council has statutory authority to determine tuition KRS 164.020(8)
• Typically exercised annually in form of tuition ceilings• Collaborative process
Council members and CPE staff Campus presidents and chief budget officers Student groups
• Data driven– Sticker and net price comparisons– Trends in state appropriations– Student financial aid and average loan debt– State and student shares of total public funds– Fixed and unavoidable cost increases
Impact of Tuition Ceilings
Kentucky Council on Postsecondary Education 12
9.8%
15.4%16.0%
12.8%
11.6%
8.7%8.0%
4.5%5.4%
6.1%5.2%
3.1%
4.5%3.6%
5.4%
3.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
2002
‐03
2003
‐04
2004
‐05
2005
‐06
2006
‐07
2007
‐08
2008
‐09
2009
‐10
2010
‐11
2011
‐12
2012
‐13
2013
‐14
2014
‐15
2015
‐16
2016
‐17
(P) 2
017‐18
Actual Percent Change from Prior Year Proposed Percent Change for AY 2017‐18
Source: Council on Postsecondary Education, Comprehensive Database.
Kentucky Public Postsecondary SystemAnnual Change in Resident Undergraduate Tuition and Fees
Academic Years 2002‐03 through 2017‐18 (Proposed)
Impact of CPE Tuition and Fee Ceilings
AAGR = Average Annual Growth Rate
4.6% AAGR11.7% AAGR
P = Proposed
Budgetary Shortfall (Cumulative)
13
$899
$175
$620
$1,151
$181 $495
$2,455
Fixed Cost Increases andState Budget Reductions
Gross Tuition and FeeRevenue
Budget Challenges for Postsecondary InstitutionsFiscal Years 2007‐08 through 2014‐15
(Dollars in Millions)
$3,521Growth in Campus Funded
Student Financial Aid
Other Fixed Cost Increases 1
1 Includes utilities, mandated tuition waivers, and contractual obligation cost increases.
KERS/KTRS Cost Increases
General Fund Budget Reductions @ 16%
Source: Council on Postsecondary Education, Comprehensive Database.
$1,066ShortfallCost Shift (M&O)
Health Insurance Increases
$3,521
Sticker Price Comparison (Four-Year)
14
$7,488
$8,632
$9,201
$9,518
$9,953
$10,266
$12,323
$13,278
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000
West Virginia
Missouri
Indiana
Tennessee
Kentucky
Ohio
Virginia
Illinois
PublicFour‐Year Universities in Kentucky and Surrounding StatesResident Undergraduate Tuition and Fees
Academic Year 2016‐17
Source: College Board, Trends in College Pricing 2016.
Sticker Price Comparison (Two-Year)
15
$3,246
$3,890
$3,948
$4,282
$4,407
$4,535
$4,913
$4,948
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000
Missouri
Illinois
West Virginia
Tennessee
Indiana
Ohio
Kentucky
Virginia
Public Two‐Year Colleges in Kentucky and Surrounding StatesResident In‐District Tuition and Fees
Academic Year 2016‐17
Source: College Board, Trends in College Pricing 2016.
Kentucky is “High Aid” State
16
$0 $2
6 $4
8 $5
2 $6
4 $7
4 $116
$1
21
$125
$1
30
$133
$1
95
$236
$2
48
$268
$2
83
$286
$2
95
$355
$3
67
$405
$4
12
$437
$4
57
$457
$5
20
$520
$5
55
$581
$6
05
$629
$6
96
$701
$7
08
$776
$7
79
$792
$8
44 $962
$9
75
$1,016
$1
,062
$1
,090
$1
,110
$1
,133
$1
,141
$1,324
$1
,368
$1
,513
$1
,545
$1
,668
$1
,962
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
NH AL UT
AZ ID HI RI KS MT SD PR NE
MS
MI
OH
ME
MA CT OR IA ND
MO NV CO MD VT WI
FL DE OK
WY AK IL DC TX NC
MN PA VA IN AR CA WV
NM NY KY NJ
WA TN LA GA SC
Source: National Association of State Student Grant and Aid Programs (NASSGAP), 46th Annual Survey Report on State‐Sponsored Student Financial Aid.
State Funded Student Financial Aid Programs in the United StatesTotal Undergraduate Grant Dollars per Undergraduate Student Enrollment
Academic Year 2014‐15
Low Aid States High Aid States
Dollars(per Student)
Growth in Campus-Based Aid
17
$1,031 $997 $956 $966 $1,029$1,124
$1,719$1,941
$1,766
$1,504 $1,438
$778 $781 $829 $821 $762 $757
$993$885
$677$781 $739
$1,693$1,800
$1,952$2,083
$2,224$2,326
$2,078$2,184
$2,579
$2,786$2,932
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2003‐04 2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 2013‐14
Pell and Other Federal Grants State Grants Campus Funded Grants and Scholarships
Kentucky Public Postsecondary SystemStudent Financial Aid per FTE Student by Source
Fiscal Years 2003‐04 through 2013‐14
Source: Integrated Postsecondary Education Data System (IPEDS); Commonfund Institute, Higher Education Price Index (HEPI).
Constant 2014 Dollars
Dollars(per Student)
Net Price Comparison (Comprehensive)
18
$8,761
$10,484
$11,802
$11,871
$12,066
$15,506
$16,032
$16,818
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000
West Virginia
Kentucky
Missouri
Indiana
Tennessee
Ohio
Virginia
Illinois
ComprehensiveUniversities in Kentucky and Surrounding StatesAverage Net Price of First‐Time Full‐TimeResident Undergraduate Students
Academic Year 2014‐15
Source: Integrated Postsecondary Education Data System (IPEDS).
Net Price
Trend in Net Price (Comprehensive)
19
$15,921 $16,911 $16,846
$17,274 $17,928
$18,441
$9,790 $10,484 $10,377 $10,251 $10,484 $10,298
$6,714 $7,113 $7,473 $7,706 $8,031 $8,304
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
$22,000
2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16
Total Cost of Attendance Net Price Tuition and Fees
Kentucky Public Comprehensive UniversityCost of Attendance, Net Price, and Tuition and Fees of Resident Undergraduates
Academic Years 2010‐11 through 2015‐16
Source: Council on Postsecondary Education, Kentucky Postsecondary Education Data System (KPEDS).
Net Price % of Income (Four-Year)
20
20% 20% 20%
23% 23% 24% 24% 24% 25%
29% 29% 30% 31% 32% 33%
36%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
FL WV OK TN KY NC AR LA TX MS GA MD AL VA SC DE
Source: Penn Graduate School of Education, Institute for Research on Higher Education, 2016 College Affordability Diagnosis.
Public Four‐Year Colleges in SREB Member StatesAverage Net Price as a Percent of Median Family Income
Academic Year 2013‐14
More Affordable Less Affordable
Net Price % of Income (Two-Year)
21
13%14%
16% 16% 16%17% 17% 17% 17% 17%
18% 18% 18% 18%19%
21%
0%
3%
6%
9%
12%
15%
18%
21%
24%
27%
MS GA TX AL KY WV DE OK TN VA FL AR SC MD NC LA
Source: Penn Graduate School of Education, Institute for Research on Higher Education, 2016 College Affordability Diagnosis.
Public Two‐Year Colleges in SREB Member StatesAverage Net Price as a Percent of Median Family Income
Academic Year 2013‐14
Less AffordableMore Affordable
Performance Funding Model
22
Performance Funding Model
23
• The 2016 budget bill (HB 303) directed the Council to establish a working group composed of:
− The Governor (or representative)− President of Senate (or representative)− Speaker of the House (or representative)− President of each public university and KCTCS− Council president
• Charged with developing a comprehensive model for allocating state appropriations that incorporates:
− Campus performance− Mission− Enrollment
24
• Outcomes-based funding model that distributes 100% of allocable General Fund appropriations for institutional operations using rational criteria:
70% distributed based on performance– student success outcomes– course completion
30% in support of vital campus operations– operation and maintenance of facilities– institutional support– academic support
Funding Model Features
25
• All public four-year institutions included in a common performance pool
• Safeguards ensure research and comprehensive sectors on equal footing at initial implementation
• KCTCS institutions in a separate performance pool
• Both models include adjustment to minimize impact on smaller universities and two-year colleges
• Employs hold harmless and stop loss provisions in early years of implementation
Funding Model Features (Cont’d)
Funding Model Components
26
Student Success35%
Course Completion35%
Academic Support10%Institutional
Support10%
Maintenance and Operations
10%
Kentucky's Outcomes‐Based Funding ModelDistribution of Allocable Resources
Share of sector total:• Degrees and credentials awarded• Degrees per 100 FTE students• STEM+H degrees and credentials• URM degrees and credentials• Low Income degrees and credentials• Credentials earned by underprepared• Student progression (@ 30, 60, & 90)
Share of sector total square feet dedicated to student learning
Share of sector total spending on instructionand student services
Share of sector total FTE student enrollment
Share of sector total:• Credit hours earned (weighted to account for cost differences by course level and academic discipline)
Funding Model Goals
27
• Increase retention and progression of students toward timely completion
• Increase numbers of credentials, associate degrees, and bachelor’s degrees earned by all student types
• Grow numbers of credentials and degrees that garner higher wages upon completion:
− STEM+H fields− high demand fields and targeted industries
• Close achievement gaps by increasing credentials and degrees earned by underrepresented minority, low income, and underprepared students
Funding Model Comparison
28
3%
35%
61%
98%
90%
1%
2%
3%
4%
8%
8%
10%
67%
35%
14%
10%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Missouri
Maine
Indiana
New Mexico
Pennsylvania
Arkansas
Florida
Tennessee
Kentucky
Oregon
North Dakota
Nevada
Course Completion Progression and Degree Completion Other
Outcomes‐Based Funding in Four‐Year Sectoras Percentage of Overall State Support
December 6, 2016
Source: Snyder and Fox (2016), HCM Strategists, Driving Better Outcomes: Fiscal Year 2016 State Status & Typology Update.
Presentation to Appropriations and Revenue Committee
Budget Review Subcommittee on Postsecondary Education
Robert L. King, PresidentKentucky Council on Postsecondary EducationJanuary 18, 2018