Making Kentucky STRONGER BY DEGREES

Presentation to the House Appropriations & Revenue Subcommittee on Postsecondary Education By Robert L. King January 30, 2014

Making Kentucky

STRONGER BY

DEGREES

1

Presentation Overview Slides

Historical View, Postsecondary Education Budget 3-6

2014-16 Budget Request

Operating Request 7-8

Trust Funds 9

Capital Request 10

Distribution of Monies 11

Agency Request 12-15

Kentucky Adult Education 16-20

Student Aid and Assistance 21

Technology and Academic Support 22

Research and Economic Development 23

Additional Funding (Debt Service) 24

2

Declining Share of State Budgets

3

15.3%

15.6%

15.0%

15.8%

15.6%

15.8%

15.4%

15.3%

14.8%

14.7%

13.8%13.6%

14.0%

13.1%

12.4%

12.0%

11.5%

11.7%

10%

11%

12%

13%

14%

15%

16%

17%

18%

FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Kentucky Budget of the Commonwealth

Postsecondary Education's Share of Total State General Fund BudgetFiscal Years 1999 - 2016

Perc

ent

Source: Kentucky Enacted and Proposed Budgetsof the Commonwealth.Governor's Proposed

Budget (HB 235)

Historical View, Postsecondary Education Budget

4

$8,513 $8,258

$7,630

$7,096

$6,707

$6,299 $6,054 $5,960

$5,772 $5,680

$255 $883

$1,417 $1,806

$2,214 $2,459 $2,553 $2,741 $2,833

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

FY08Enacted

FY08 Final FY09 Final FY10 Final FY11 Final FY12 Final FY13 Final FY14Enacted

FY15Proposed

FY16Proposed

Net General Fund Appropriations per FTE Student Loss per Student FY08 to FY16

Kentucky Public Postsecondary System

Inflation Adjusted Net General Fund Appropriation per FTE Student FY 2008 - 2016 proposed

Dollars (per Student)

Constant FY16 Dollars (est)

Sources: Kentucky Budget of the Commonwealth; CPE Comprehensive Database; Commonfund Institute, Higher Education Price Index (HEPI).

Additional $449 M

Needed to Maintain

FY08 Funding

Level

Assumes flat enrollment growth and 1.6% inflation each year for FY14, FY15, and FY16


Fixed Costs Exceed Tuition

5

$23.1

$66.8 $32.1

$8.4

$15.2

$9.3

$22.1 Estimated $43.4 Million

Budget Shortfall

Kentucky Public Postsecondary Institution

Anticipated Fixed Cost Increases and Increase in Tuition & Fee Revenue (@ 3% Rate Increase)

Fiscal Year 2014-15

* Estimated increase in grossbillable tuition and fee revenue at an assumed 3 percent rate increase across all levels of students and

programs. Calculated by adding estimated net tuition and fee revenue and institutionally funded scholarships.

$110.2

Fixed Cost Increases & Proposed Budget Reduction

Increase in Gross Tuition & Fee Revenue @ 3% Rate Increase *

Institutional Financial Aid

KERS Rate Increases

Health Insurance

Maintenance & Operations

Other Fixed Costs

Proposed 2.5% Reduction


Shared Benefits and Responsibility

67% 66% 66% 64%

61% 58%

54% 53% 51% 50%

47% 44%

43% 40%

38% 36%

34% 32%

30% 28%

26% 25%

33% 34% 34% 37%

39% 42%

46% 47% 49%

53% 56%

58% 60%

62% 65%

66% 68%

70% 72%

74% 75%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

FY

99

FY

00

FY

01

FY

02

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

FY

20

State Share of Total Public Funds Student Share of Total Public Funds

Kentucky Public Postsecondary System

Change in State & Student Shares of Total Public Funds Fiscal Years 1999 - 2020

Pe

rcen

t

Sources: Kentucky Budget of the Commonwealth;

CPE

Comprehensive Database.

(Projected)

State Share = Net General Fund Appropriations ÷ Total Public Funds

Student Share = Gross Tuition & Fee Revenue ÷ Total Public Funds 6


Institutional Operating Funds (Dollars in millions)

FY 15 FY 16

Funding Category CPE Req. Gov. Rec. CPE Req. Gov. Rec.

College & Career Readiness $19.2 $0.0 $19.2 $0.0

Research & Economic Development 12.0 0.0 12.0 0.0

Performance Funding 18.0 0.0 36.0 0.0

Land Grant Mission Funds 1.4 0.0 2.8 0.0

Kentucky Adult Learner Initiative 2.4 1.9 2.4 1.9

Total $53.3 $1.9 $72.4 $1.9

Percent Change on FY14 ($916.0 M) base 5.8% 0.2% 7.9% 0.2%

7

Operating Request, 2014-16 Budget

Institutional Operating Funds

8

Governor’s Budget includes:

• Base Reduction of 2.5% in FY15 ($23.1M), with no increase in FY16

• Funds 50% of the KERS Rate Increases, $8.4 M each year

• Funding for Gatton Academy at WKU, $2 M in FY16

Operating Request, 2014-16 Budget

Strategic Investment Trust Funds (Dollars in millions)

Funding Category/Institution CPE Request Gov. Rec.

Bucks for Brains

University of Kentucky $50.0 $33.3

University of Louisville 25.0 16.7

Comprehensive Universities 15.0 10.0

Workforce Development Match

KCTCS 5.0 0.0

Trust Fund Total $95.0 $60.0

9

Trust Funds, 2014-16 Budget Request

Capital (Dollars in millions)

GF Bond Fund Projects CPE Req. Gov. Rec.

Asset Preservation $320.0 $274.7

New/Expanded Space 280.0 245.7

Information Technology 60.0 1.2

Total $660.0 $521.5

Agency Bond Authority* $814.7

*CPE did not endorse a specific level of Agency Bond Authority

10

CPE advocated for Asset Preservation, New/Expanded Construction, and IT pools in its budget request. The Governor’s Recommended Budget lists specific projects. The IT funding is for one project, Commonwealth College Web Portal.

Capital, 2014-16 Budget Request

CPE General Fund

11

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

FY14 FY15 FY16

Bucks for Brains (Debt Serv)

KY Adult Learner Initiative

Physical Facilities Trust (DebtServ)

Research & EconomicDevelopment

Technology & Academic Support

Student Aid & Assistance

KY Adult Education

KERS, Salary Increase, Mandates

Agency Staff & Operating Base

Funds do not stay at CPE

Funds do not stay at CPE

Proposed Proposed

Distribution of Monies, 2014-16 Budget Request

CPE Budget

5% cut for most areas of CPE’s Budget

Exceptions:

• Contract Spaces –$217,000 in FY15, $478,500 in FY16 added to FY14 base to fund tuition increases

• Current Year GF Appropriation of $1.6M restores Lung Cancer Program Tobacco Funds to enacted FY14 level, though the Program will lose $442,000 in Continuing Appropriation.

New funds for:

• Commonwealth College Start-Up Costs, Debt Service for Web Portal

• Debt Service for Capital Projects $520.3M at the Institutions & $60.0M Bucks for Brains

12

Agency Budget, 2014-16 Budget Request

CPE General Fund Budget Funding Category

Current FY 13-14

Proposed FY 14-15

Proposed FY 15-16

Agency Staff & Operating $6,920,600 $6,884,600 $6,987,600

KY Adult Ed. Local Providers 19,548,600 18,575,500 18,575,500

Pass-through Programs:

Student Aid & Assistance 5,931,900 6,113,000 6,374,100

Technology & Academic Support 5,833,400 5,543,000 5,543,000

Research & Economic Development 5,717,900 5,433,300 5,433,300

Pass-through Program Subtotal 17,483,200 17,089,300 17,350,400

Subtotal $43,952,400 $42,549,400 $42,913,500

Physical Facilities Trust Fund (Debt Serv) - 3,156,500 32,433,000

KY Adult Learner Initiative - 2,001,500 2,083,000

Bucks for Brains (Debt Service) - - 2,793,500

Total $43,952,400 $47,707,400 $80,233,000

Current year GF appropriation for the Lung Cancer Program and KY Adult Education TF continuing appropriation is not included above.

13


CPE Budget

Agency Staff & Operating

Funding Category Current FY 13-14

Proposed FY 14-15

Proposed FY 15-16

Personnel $5,813,300 $5,522,700 $5,522,700

Operating 1,107,300 1,051,900 1,051,900

Retirement System Increases 241,900 277,000

Salary, Health Ins., other mandates 68,100 136,000

Total $6,920,600 $6,884,600 $6,987,600

Assumes across the board cuts.

14

This area will sustain a 5% cut in FY14-15, or $346,000. In FY13-14, 84% of the budget will support salaries.


CPE Budget

Agency Staff & Operating – GF and Staff

15

96

66

0

20

40

60

80

100

120

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Staf

fin

g L

evel

Prop. Prop.


CPE Budget

Kentucky Adult Education


Proposed FY 14-15

Proposed FY 15-16

Kentucky Adult Education $19,548,600 $18,575,500 $18,575,500


16

A 5% cut in this area for FY14-15 is $973,100.

Kentucky Adult Education’s General Fund directly supports education providers in every Kentucky County.

Agency Budget, Kentucky Adult Education

KYAE Funding General Fund Appropriations

17

$25.03 $23.53

$22.59 $21.91 $21.21

$19.55 $19.55 $18.56 $18.56

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15Proposed

FY16Proposed


KYAE Funding General Fund Appropriation per Enrolled Student

$796

$585 $576 $567 $537

$516

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

FY08 FY09 FY10 FY11 FY12 FY13

18


GED® Graduates Enrolling in Kentucky’s Colleges and Universities*

within Two Academic Years

KYAE has set a goal of increasing the college-going rates of GED® graduates to 30% by 2015. Of those who enrolled in postsecondary education by summer 2013: • 94% enrolled in KCTCS • 4% enrolled in a public four-year

institution • 2% enrolled in an independent

institution

21%

23%

26% 25%

26%

0%

5%

10%

15%

20%

25%

30%

2008-09 2009-10 2010-11 2011-12 2012-13

19

20

07

Gra

du

ate

s

20

08

Gra

du

ate

s

20

09

Gra

du

ate

s

20

10

Gra

du

ate

s

* Kentucky’s state-supported colleges and universities and the regionally accredited, non-profit, independent colleges and universities.

20

11

Gra

du

ate

s


Kentucky’s Adult Education System Decades of Progress

630,000 537,000

410,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1990 2000 2010

Population, 18-64, without a High School Credential

Population less than HS/GED Working Age Population (18-64)

2.2 million 2.5 million 2.7 million

(29%) (21%) (15%)

20


CPE Budget

Student Aid & Assistance


Proposed FY 14-15

Proposed FY 15-16

Contract Spaces $5,201,600 $5,419,000 $5,680,100

Professional Ed. Prep. Program 265,100 251,900 251,900

Minority Student College Prep Prog. 185,200 176,000 176,000

Autism Training Center 132,400 125,800 125,800

SREB Doctoral Scholars Program 71,500 67,900 67,900

Washington Intern Program 76,100 72,400 72,400

Total $5,931,900 $6,113,000 $6,374,100

Provides tuition increases for Contract Spaces, but otherwise assumes across the board cuts of $36,300.

21

Student Aid and Assistance, 2014-16 Budget Request

CPE Budget

Technology & Academic Support


Proposed FY 14-15

Proposed FY 15-16

Technology Initiative Trust Fund $4,288,800 $4,075,300 $4,075,300

Teacher Quality Initiatives (SB1) 1,544,600 1,467,700 1,467,700

Total $5,833,400 $5,543,000 $5,543,000


22


Technology and Academic Support, 2014-16 Budget Request

CPE Budget

Research & Economic Development


Proposed FY 14-15

Proposed FY 15-16

KY Science and Technology Corp. $5,475,100 $5,202,600 $5,202,600

Project Lead the Way 242,800 230,700 230,700

Total $5,717,900 $5,433,300 $5,433,300


23


Research and Economic Development, 2014-16 Budget Request

CPE Budget

Additional Funding

Funding Category Proposed FY 14-15

Proposed FY 15-16

KY Adult Learner Initiative (Commonwealth College) Operating

$1,920,000 $1,920,000

Web Portal - Commonwealth College (Debt Service)1 81,500 163,000

Bucks for Brains (Debt Service) 2 - 2,793,500

Physical Facilities Trust Fund (Debt Service) 3 3,165,500 32,443,000

Total $5,167,000 $37,319,500

24

Debt Service listed above supports:

1$1.2M IT Capital Project

2$60M in Bucks for Brains: UK ($33.3M), UofL ($16.7M), Comprehensive Universities ($10 M)

3$520.3M in Capital Construction at the Universities.

Debt Service, 2014-16 Budget Request

Presentation to the Appropriations & Revenue Subcommittee on Education By Robert L. King January 30, 2014

Making Kentucky

STRONGER BY

DEGREES

25

Making Kentucky STRONGER BY DEGREES

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