A Presentation To The

South Carolina Commission on Higher Education

Changing Landscapesat Winthrop University

August 2009

Looking back just one year ago: August 2008 The fiscal landscape

Remember this time last year?

National News : ‘Is Obama the Wall Street Candidate?’

Business News : Dow closes at 11,656.07 Commodities News : Oil traded at $120 barrel

Gas Tracker Report : $3.76 per gallon (SC average) A Share of Wachovia Stock: $18.54

S.C. News : Unemployment Rises to 7 percent

Campus News: Expected appropriation reduction of 7%

Looking around the same landscape a year later:

• Wachovia is now hitched to Wells Fargo’s wagon.

• The Dow is spinning around in the 9000 block of a still shaky neighborhood.

• Oil is around $67 a barrel… for now.

• Gas is around $2.25 a gallon … for now.

• South Carolina’s unemployment rate is 12.1%...for now.

• State agencies are in for another challenging year, with a 4 percent appropriation reduction likely in the near future, bringing the total loss of state funds to about 30 percent over the past 15 months.

The Changing Landscape in South Carolina

• The world economy continues in uncharted territory, and so does South Carolina’s economy.

• The accelerated rate of change can’t be expected to slow down and wait for us to catch up.

• Our challenge is to determine our next horizon, then figure out how to reach, while still coping with and adjusting to current conditions as needed: What are our ends? What means will we use to get us there?

-- True for the State of S.C.

-- True for Winthrop University

• Winthrop always has been vision-driven; now must be increasingly market-wise as well.

The Vision for Winthrop

Winthrop University will be— and will be recognized as— one of the best universities

of its kind.

Defining Winthrop’s ‘Nature and Character’

As a community of learners:• We center the Winthrop Experience on student development inspired by our commitment to the liberal arts traditions, to national caliber professional education, and to developing leadership and civic responsibility;

• We nurture collective and individual growth, enlightenment, and transformation; • We value the search for truth through reasoned and disciplined inquiry, innovation, and free expression;

• We embrace multiculturalism and the broadest possible diversity of people and perspectives;• We share a strong sense of place -- a beautiful, historic campus with a collegial, caring atmosphere; and

• We fulfill and enhance the nature and character of the university through policies and resources that reflect and advance these ideals and aspirations.

Winthrop’s Core Values

SERVICE: Service to the people of South Carolina is Winthrop’s highest priority. Winthrop serves by preparing our students to betomorrow’s leaders in their chosen fields and in their communities.

EXCELLENCE: A college of university is enhanced by a commitmentto excellence. Winthrop will embrace only those programs and activities we can deliver at an exemplary level.

DIVERSITY: A college or university is enriched by the diversity of itsPeople. Winthrop nurtures diversity because diversity gives meaning to our sense of community, enhances creativity, teaches flexibility and builds strength from difference.

COMMUNITY: Winthrop is a community of learners built around high expectations and high purposes. Winthrop expects all members of the campus community to use their unique talents to leave the university a better place.

The ‘Vision of Distinction’ and its roles• The ‘Vision’ annual update process keeps us attuned to what it means to be “market-wise” as the economy and other circumstances change.

•The ‘Vision’ serves as a desk guide for all personnel regarding what we are doing in any given year and why we are doing it.

• The ‘Vision’ communicates to the public about Winthrop values, goals, objectives and accomplishments.

• The ‘Vision’ process provides internal and external accountability and progress reporting over time.

Vision of Distinction Strategic Goals Toward fulfillment of which annual initiatives are directed

Winthrop articulates our ultimate goals in six areas:

• University Community

• Student Body

• Academic Life

• Facilities

• Support Service

• Partnerships and Collaborations

The Winthrop University Planning Process Flow Chart:

Institutional Effectiveness

and Accountability

Winthrop University

--Vision of

Distinction --

Mission

Resource Allocation

Annual

Initiatives and

Objectives

Strategic Values/

Long Range Goals and

Directions

The Changing Landscape in South Carolina

New Market Realities:

• Only about 14 percent of our revenue comes from the State of South Carolina. That means 86 percent of our revenue comes from elsewhere.

• Winthrop will be responsive to state mandates, but we also have to be even more responsive to those who provide 86% of our revenues.

• This reality will shape how all institutions respond to Higher Ed Study Committee report, among other similar initiatives.

“Enabling Future Development of the University

For all these reasons, Winthrop’s approach to on-goingchallenges is summarized as follows:

While Managing the Demands of the Present”

Those are the dual responsibilities of our stewardship in these particular times

Changing Landscapesat Winthrop University

Winthrop Priorities:

1. Ensuring the continuing national-caliber quality of the academic experience at Winthrop. [A supplementary document is in your folders to provide further detail.]

2. Continuing to provide a safe and secure campus.

3. Continuing recruitment of the high-achieving, socially responsible and inclusive student body for which Winthrop is known.

Making Higher Education A State Priority in S.C.

• Over the years, there has been no stronger proponent than Winthrop in encouraging South Carolina to identify a set of common ends for higher education that meet societal needs of this state and its citizens.

• Over the years, we have called repeatedly for a set of goals and objectives to address collectively and collaboratively as a network of educational enterprises, while still fulfilling our respective institutional missions in ways consistent with our respective core values.

• Over the years, we have demonstrated both willingness and eagerness to serve beyond the curb lines of our respective campuses to meet societal needs of South Carolina as a state..

The Report of the

Higher Education Study Committee

offers timely perspectives on how South Carolina can reach

its next horizons.

Timely, not because they will

be easy to implement in the current environment, but because they are critical to creating a future where our state’s youth can live and work as citizen-professionals, building social and economic progress of South Carolina and all its citizens.

How can South Carolina’s public comprehensive institutions --a group of which Winthrop is part-- clearly define and communicate our

specialized teaching mission, both within the context of HESC recommendations

and in a manner consistent with emergingnational best practices?

With the advice of national experts…

Goals of NCHEMS Sector Study

• Define Niche for Teaching Institutions within South Carolina Higher Education Landscape that:– Responds to Higher Education Study Committee

Report– Leads to Level Playing Field with Research

Universities and Technical Colleges– Communicates Importance of Teaching

Universities to Future Of South Carolina

Approach

• Compile Data about South Carolina and Its Public Institutions

• Use Data to Create Information Showing Contributions Made by Teaching Universities to South Carolina and Its Regions

• Work with University Presidents to: – Refine Interpretations of Analytic Results– Find Common Ground on Role Their Institutions Play

in Improving Economies And Quality of Life in All Parts Of South Carolina.

Analysis

• Review Materials to Understand Current Context

• Compile Data About:– Current and Projected Demography and Economy– Institutions (Students Served, Degrees Produced, etc)

Analysis (Continued)

• Analyze Available Data to Show Ways in which Sector Institutions Contribute to the State as a Whole and to their Service Areas

• Compile Short List of Components that Might Be Considered in Developing Common “Message” for Institutions:– Highlights of Analyses– Results that Reflect Contributions of Institutions to

Current and Future Needs Of State– Points of Any Misalignment

Process

• August: Meet with Presidents to:– Review Results– Identify Additional Analyses that Might be

Undertaken or Questions that Need Further Explanation

• September: Complete Analyses and Revise “Messaging” Components to prepare for public policy presentations (Fall 2009 and 2010 General Assembly.)

Amidst work on South Carolina’s future,institutions must continue to deal with present realities

It is increasingly important to bring resources to institutions from other sources to bridge widening gaps in state support:

-- federal sources

-- donor sources

-- increasing enrollment, particularly among out-of-state tuition payers, while continuing emphasis on serving the public of South Carolina

Changing Realities in Higher Ed Budgeting: … further declining state support

*

Appropriations14.3%

Student Tuition and Fees

50.2%

Contracts and Grants17.2%

Auxiliary Enterprises

10.3%

Other8.0%

This time last year: Winthrop Projected Revenues for FY2009

Resulting in 2009-2010 State Operating Base Appropriation to Winthrop of $ 17,838,919* (*figure includes net after last year’s state pay plan allocationand annualizing last year’s appropriation reductions)

What the General Assembly adopted for next year :

Annualized cumulative cuts taken throughout 2008-2009:

July 08 3.13% $ 735,574 [ was cut from beginning base July 1, 2008]

Oct 08-14.80%: $ 3,400,021Dec 08 - 7.00%: $ 1,370,117March 09 - 2.00%: $ 364,060

$ 5,134,198 [$5,869,772 since June 08.]

Changing Realities in Higher Ed Budgeting: … further declining state support

*

Other8%

State Appropriations

13.6% Federal Appropriations

2.4%

Student Tuition and Fees

49.0%

Contracts and Grants16.7%

Auxiliary Enterprises

10.3%

Projected Revenues 2010– WITH federal stimulus funds + HEPI fee increase

Winthrop Budget Considerations

• Under the Mission Resource Requirement (MRR) calculated by the Commission on Higher Education, Winthrop should receive at least $37,428,601 in state support per year, but under the appropriation just adopted, Winthrop will receive only 55.9% of that amount next year.

Winthrop Budget Considerations

• Federal stimulus funds have always been viewed at Winthrop as an interim budget solution only – a short-term bridge.

• Long-term, comprehensive state tax reform remains an essential element for positive growth and development for all sectors of South Carolina.

• Institutional adjustments over time have to be considered as well to be ready for 2012.

2009-2010 State Appropriation to Winthrop $ 17,838,919* + Federal Stimulus Funds 3,092,270 $ 20,931,189

• 2000-2001 Appropriation to Winthrop $ 25,404,503• 2008-2009 Appropriation to Winthrop $ 22,745,010• 2009-2010 Appropriation to Winthrop $ 17,838,919 + Federal Stimulus Funds 3,092,270

New gap to reach just 2000-2001 state support $ 7,565,584

Addressing cumulative cuts taken throughout 2008-2009 :Oct 08 -14.80%:$ 3,400,021Dec 08 - 7.00%: $ 1,370,117March 09 - 2.00%: $ 364,060Total loss: - 23.80% $ 5,134,198 reductions since July ’08

Summer 09 4.00% ?? $ 713,556 (est. if applied to education)

Looking ahead to Fall 2009 and beyond

Budget considerations

• CHE to be commended for not moving forward with below the line items.

• Need a fair and equitable distribution method so operating budgets can be stronger as a means of holding down tuition and fees.

• Verifiable formula-based plan is best means to a fair and equitable allocation.

Operating Funds Are Not the Only Concern Capital Needs Addressed Virtually Without State Support

Campus capital needs eventually have had to be addressed through fees to meet student needs andmaintain Winthrop quality

Latest Winthrop projects, largely self-funded:

• Carroll Hall College of BusinessAdministration, Fall 2009

• Campus Center under construction, Spring 2010

Winthrop’s Next Horizons Capital NeedsStill unmet… and the calendar keeps turning

Winthrop’s Priority Current Unfunded Academic Building Capital Need:

A 21st century library and information technology center, to be used by all students regardless of major

Estimated Cost: $50 Million

The current situation is a threat to institutional quality

built over two decades at Winthrop…

… and a threat to S.C. students’ access to that quality,

so that our state can continue to develop the next generation of citizen-professionals

who will be ready to lead when their time comes.

• It is well and good for all of us to talk about what members of the public higher education community should, can and are doing to work more efficiently and effectively with the state resources devoted to higher education.

• But the fact remains: Other Southeastern states, even in these tough times, are investing more directly in their institutions and in need-based aid, and with good results in regard to their educational attainment as state populations – their competitive edge.

• South Carolina can do the same, by focusing on the ends it wants to achieve, then identifying the means of reaching those ends. So I urge all of us –including members of the commission – to emphasize in all outreach opportunities the two recommendations of the Higher Education Study Committee that are the ones that will do the most to shape opportunities for our people and our state as the 21st Century approaches its second decade:

Some final thoughts for today:

(1) Recommendation 4.1.: Fund higher education at the SREB average or above. “…if South Carolina wants to see its economy flourish, it must also promote higher education through additional support from general fund appropriations.”

(2) Recommendation 4.2.: Support routine and predictable capital funding of colleges and universities…. “The last bond bill for higher education in South Carolina was approved in 2000. Absent subsequent bond funding, our colleges and universities have been at a distinct disadvantage when compared to institutions in Georgia, Kentucky, and North Carolina.”

An important means…

… to an essential end

Thank you for your continuing serviceto the State of South Carolina