Budget Committee
Governor Tico Perez, Chair
January 24, 2008
1
Governor’s Recommended SUS
2008-09 Budget Increase
 E&G Core Budget Increase - $68 M
 $52 M for 3,600 Students ($33.4 M GR & $18.6 M tuition)
 $9.3 M for Operations & Maintenance funding for New Facilities
 $3.3 M for FAU/UM Medical Partnership
 $1.8 M for NCF (final year of 3 yr request)
 $1.25 M for UCF/Burnham Contract
 $.5 M for FAMU Federal Land Grant Matching
 $.1 M Financial Aid Funds (replaces non-recurring funds
during the fall special legislative session)
 No Tuition Increase
2
Governor’s Recommended SUS
2008-09 Budget Increase
 Special Units Budget Increase - $21.9 M
 $18.7 M for Year 2 UCF and FIU Medical Schools
 $3.2 M for FSU Medical School (replaces non-recurring
funds received in 2007-08)
 Other Initiatives - $145.1 M
 $74.9 M for Courtelis and Major Gift Matching
Program (BOG to decide on allocation)
 $60.2 M for Centers of Excellence
 $10 M for FAU Ocean Energy Research (funded in the
Department of Environmental Protection budget)
3
Overview of State Financial Outlook &
Potential Impact to the SUS
4
State Revenue Streams
100%
80%
Includes revenue from tax sources such as:
sales, corporate, doc stamps, tobacco.
General Revenue
60%
40%
Federal flow-through such as Medicaid,
transportation, & environmental funds.
20%
State funds such as gas tax, lottery sales,
gross receipts taxes.
Trust Funds:
Revenues for
Specific initiatives
0%
Trust Funds
General Revenue
5
2007-08 State Budget - $70.9 B
(after fall budget reduction of $1.1 B)
Trust Funds
$42.40
60%
Entities such as Health Care
Administration;
Environmental
Protection;
Transportation;
Community
Affairs;
Education; etc.
General
Revenue
Entities such as –
$28.40
Dept of Education;
40%
Corrections;
Health Care
Administration;
Children & Family
Services; etc.
6
State Revenue Estimating Conferences
Total General Revenue
Billion
$800 M Surplus
$4.1 B Deficit
$3.3 B Deficit
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
2007-08
2008-09
March, 2007
November, 2007
Projected Est Expend.
2009-10
2010-11
August, 2007
Nov Est Expend.
2008-09 to 2010-11 Projected Est Expend.s from the Fall 2007 State of Florida Long Range Financial Outlook
7
Revenues Continue to Decline.....
The Reason?
 Three major US economic shocks:
 Home prices falling.
 Financial markets experiencing worst credit crunch since late 1980s.
 Record oil prices.
 Here in Florida:
 Hit hard by the housing-related shocks.
 Home sales are down.
 Population growth has slowed.
 Unemployment rates are inching closer to the US levels.
8
Source: Economic & Demographic Research – 1/8/08
Revenues Continue to Decline.....
The Reason?
9
Source: Economic & Demographic Research – 1/8/08
State GR Estimates
Spring Estimating Conferences
$31,692
$30,933
$29,015
$26,900
$24,436
$19,347
$20,912
$20,789
$20,746
$20,440
2008-09 (est)
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
7 Hurricanes
10
Source: Presentation to House Policy & Budget Council – 1/8/08
General Revenue Appropriations
Before and After Fall Reductions
Original GR
2007-08
Appropriation
(Billions)
Education
Health/Human Svcs
Nat’l Resources,
Environ., Transp.
Criminal Justice
Judicial
General Government
Total
Adjusted GR
Appropriation after
Fall Special Session
(Billions)
GR Reduction
(millions)
14,916
14,507
(409)
7,863
7,662
(201)
575
559
(16)
3,875
3,781
(94)
469
460
(9)
1,517
1,478
(39)
$29,215
$28,447
($768)
11
General Revenue Receipts since
the Nov. Estimating Conference
November
Revenue
Over/(Under)
Estimate
Sales Tax
Prel. December
Revenue
Over/(Under)
Estimate
Over/(Under)
Since November
Rev. Est.
Conference
($16.1)
($25.0)
($41.1)
Corporate Tax
9.7
26.4
36.1
Doc Stamps
0.0
(45.9)
(45.9)
(10.5)
(0.7)
(11.2)
(6.3)
(6.6)
(12.9)
8.2
(21.2)
(13.0)
(15.0)
(73.0)
(88.0)
6.7
2.9
9.6
($21.7)
($75.9)
($97.6)
Ins. Premium
Intangibles Tax
All Others
Total GR
Refunds
Net GR
Source: Presentation to House Policy & Budget Council – 1/8/08
12
2008-09 Funds Available
FY 2008-09
Beginning Balance
Recurring
NR
Total
$0
$796.2
$796.2
26,512.9
370.2
26,883.1
(26,615.0)
0
(26,615.0)
(200.0)
(200.0)
(500.0)
(250.0)
(750.0)
($602.1)
$716.4
$114.3
Must Fund Issues
($1,248.7)
($910.6)
($2,159.3)
Ending Balance / Deficit
($1,850.8)
($194.2)
($2,045.0)
Revenue Estimate
Base Budget
Reserve for Ending Balance
Reserve for Downside Risk in Forecast
Funds Available Above Base
Examples of must fund issues: Medicaid ($475); K-12 public schools ($300), Prisons ($495),
property tax amdt impact to public schools ($161); employee health insurance ($56)
Source: Presentation to House Policy & Budget Council – 1/8/08
13
State University System
2007-08 GR Budget Impact
Fall 2007 Special Session
Fall Special Session - SUS
Recurring
3.6%
($82.9)
Fall Special Session – Other SUS
Total
($82.9)
NR
Total
$24.7
($58.2)
($6.5)
($6.5)
$18.2
($64.7)
3.8%
($88.7)
2.5%
Potential Spring Legislative Action
Current EOG Holdback – SUS
Current EOG Holdback – Other SUS
Total
($3.7)
($92.4)
Potential Total 2007-08 Reduction
Potential Total 2008-09 Reduction
Other SUS = Centers of Excellence, Research Commercialization, Performance Funding
($157.1)
($171.6)
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Budget Cuts Are Compounded by
Inflation and Enrollment Growth
4%
2%
0%
-7%
-9%
Original
First Round of Second Round Second Round Second Round
Budget (Not
Cuts (Not
of (Possible)
of Cuts
of Cuts
Adjusted)
Adjusted)
Cuts (Not
(Inflation(InflationAdjusted)
Adjusted)
Adjusted
Funding Per
Student)
2007-08 Core Revenues (Tuition Plus State
Appropriations) Change from 2006-07
15
Total Funding per Full-time
Equivalent Student
After spring
reduction
20 07 -0 8
$10,728
20 05 -0 6
20 03 -0 4
20 01 -0 2
19 99 -0 0
19 97 -9 8
19 95 -9 6
19 93 -9 4
19 91 -9 2
$10,704
19 89 -9 0
$14,500
$14,000
$13,500
$13,000
$12,500
$12,000
$11,500
$11,000
$10,500
$10,000
16
Florida Has Worst Student/Faculty Ratio
in the United States
35
31.1
30
25
25
20
15
Source: USDOE
Integrated
Postsecondary
Education Data
System, 2005-06
FTE Students per
fall 2005 fulltime
tenured/tenuretrack faculty
member, fouryear public
baccalaureate and
higher
institutions
10
5
HI
WY
VT
NE
IA
NJ
CT
KY
SC
TN
KS
MS
AK
NM
RI
DE
NC
MT
MO
VA
IL
MN
MI
PA
OH
ID
ME
ND
WA
MA
WI
US
NY
MD
WV
AL
AR
IN
CO
AZ
GA
SD
NH
TX
OK
OR
UT
LA
NV
CA
FL
0
17
Board General Office
2007-08 GR Budget Impact
Fall 2007 Special Session
Salaries & Benefits (total 65 positions)
Positions
(2.0)
Other Expenses
Total
Total
($158,000)
($137,000)
(2.0)
($295,000)
(5.0)
($186,000)
Potential Spring Legislative Action
Salaries & Benefits (total 63 positions)
Other Expenses
($91,300)
Total
($277,300)
Potential Total 2007-08 Reduction
(7.0)
Other SUS = Centers of Excellence, Research Commercialization, Performance Funding
($572,300)
8.3%
18
Appropriate & Predictable Funding
19
Appropriate & Predictable Funding
 State revenues continue to decline.
 University costs continue to increase.
 Inflation is on the up-swing:
 Higher Education Price Index – 3.4%
 Consumer Price Index – 4.3%
 SUS needs $100 M to maintain 2007-08 funding level in real dollars.
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Appropriate & Predictable Funding
 Increase total funding to the level necessary to ensure that students
have access to a high-quality undergraduate education comparable to
that available at peer institutions nationally, as evidenced by such
indicators as reduced student-faculty ratios, adequate numbers of
courses, and adequate numbers of advisors to facilitate successful
progression to a timely graduation.
 Develop a predictable enrollment growth funding formula that
promotes access to and expansion of the State University System.
 Develop a revised funding formula that rewards retention and
graduation.
21
Appropriate & Predictable Funding
 Chancellor has identified four university presidents to develop
recommendations.
 University presidents should provide an update to the Budget
Committee in March.
 University presidents should present their proposal to the
Budget Committee in June.
22
An $88.7 M Cut Amounts to:
Student Enrollment Reduction
15,000
Or
Faculty Reduction
900
Or
Library Books not Purchased
1,300,000
Or
Support Personnel: Police Officers,
Counselors, Advisors, Other
Student Support
1,800
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