Open Forum on the Budget FY2017 – FY2019 May 4, 2016 Agenda Higher Education Environment Impact to Ramapo College Budget process Financial outlook Higher Education Environment Higher Education Environment Revenue decline Student from key sources continuing to demographics Demands for return on investment from higher education New business and delivery models and globalization of education Revenue from key sources continuing to decline State appropriations for public institutions have been steadily declining Pressure from enrollment levels Fluctuating Endowment values and donor support Student Demographics Projected High School Graduates 2015 – 2020 (Northeast) Northeast projecting a 7.75% decline in high school graduates in next five years Student Demographics Projected High School Graduates 2015 – 2020 (New Jersey) Over the next five years, high school graduates in New Jersey are projected to decline by 3.5% Demands for return on investment from education Value and cost of education Employment Student rates after graduation debt levels Graduation rates and retention New business and delivery models and globalization of education Alternatives to traditional degrees Accelerated programs Industry accreditations or certifications Delivery of Education Online programs Hybrid models Globalization and international enrollment Enrollments of international students are increasing Global foot print of an institution Impact to Ramapo College State Support as a Percent of Revenues 21.0% 19.0% 17.0% 15.0% 13.0% 11.0% 9.0% 7.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (proj) (proj) *State Support and Revenues do not include Employee Benefits State Support vs. Tuition & Fees as a Percent of Operating Revenues 55.0% 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 2007 2008 2009 2010 2011 State Support *State Support and Revenues do not include Employee Benefits 2012 2013 Tuition & Fees 2014 2015 2016 (proj) New Jersey State Support FY16 Adj. State Appropriation FY17 Bud Est FTE Undergrad (tot weighted) State Funding Per Undergrad FTE Rowan University $85,383,000 11,708 7,395 New Jersey City University $24,154,000 4,735 5,101 The College of New Jersey $27,177,000 6,610 4,111 William Paterson University $30,357,000 7,589 4,000 Kean University $30,469,000 9,327 3,267 Ramapo College $14,953,000 4,978 3,004 Stockton University $18,391,000 7,437 2,473 Montclair State University $35,859,000 14,687 2,442 Sector Average $33,492,875 8,384 3,974 Source: FY17 State of NJ Detailed Budget book [Does not include support for Employee Benefits] FY16 Tuition & Fee Comparison to New Jersey Public Schools $17,000 $15,466 $15,000 $13,698 $13,000 $12,864 $12,820 $12,365 $11,772 $11,000 $11,581 $11,179 The College Ramapo Rowan of New College of University Jersey New Jersey Richard Stockton University William Paterson University Montclair State University Kean New Jersey University City University Annualized Enrollment FY11 – FY19 (Proj) 5,800 5,700 5,600 5,500 5,400 5,300 FY11 FY12 FY13 FY14 Total FTE FY15 FY16 Undergrad FTE Annualized enrollment as calculated includes all sessions: Summer, Fall, Winter and Spring FY17 Proj FY18 Proj FY19 Proj Ramapo Student Indebtedness Average Ramapo Freshmen – 64% take out loans averaging $8,542 Ramapo student loan indebtedness for 4 years averages $28,758 In 2014 State of New Jersey average is $28,318 (source TICAS website) National Average in 2014 is $28,950 Source: Collegefactual.com, Money Magazine BUDGET PROCESS Principles of Budget Development Using resources focused on the Mission of the College The planned use of resources will not exceed estimated resources available The College is committed to maintaining resources in order to sustain overall financial health Current Budget Cycle Step 8 Assessment and adjustment of current budget Step 7 President’s State of the College Address Step 6 Units receive budgets (Jul) Step 1 New fiscal year begins (Jul) Submit OMB budget request to State (Nov) Step 2 Units submit funding requests (Jan- Mar) Step 3 Cabinet reviews budget requests Draft proforma and assumptions tested (May) Step 5 Board of Trustees approves budget and tuition & fee Step 4 increase (Jun) Budget Presentation-Open Forum Final budget developed for Trustee review (Jun) Proposed Budget Cycle Step 8 Budget training for unit directors Units assessment and adjustment of current budget (FY17) Step 7 President’s State of the College Address Step 6 Units receive budget (Jul) Step 1 New fiscal year begins (Jul) Submit OMB budget request to State (Nov) Step 2 Budget training for unit directors Budget for units established by account for review Change requests submitted through Adaptive (Jan- Mar) Step 5 Step 3 Board of Trustees Cabinet reviews budget approves budget and Draft proforma and tuition and fee increase Step 4 assumptions tested (Jun) Budget Presentation-Open Forum (May) Final budget developed for Trustee review (Jun) Next Year’s Budget Cycle Focus on what is needed in each unit No more “inflationary” requests, as next year change requests will be submitted (assumes increases and decreases) All new items will be requested with a funding source in mind Budgeting is a College-wide process, the Budget Office is here for support and guidance, but each unit owns their budget Where Do Operating Funds Come From? State support Appropriations /Employee benefits – “authorized positions” Student tuition & fees (net) Auxiliary services Fundraising revenues Sources of Revenues 2017 Est. Other, 1.0% Fees, 18.5% Auxiliary, 21.2% State Support, 27.7% Net Tuition, 31.6% Expenditures by Category 2017 Est. Debt Service, 11.3% Other, 11.1% Contracted & Professional, 9.4% Maintenance & Cap Improv, 2.1% Fuel & Utilities, 3.5% Salaries & Benefits, 62.6% Financial Outlook Current Baseline Budget Current Key Assumptions: Base State appropriation flat Full-time fringe rate at 49.43% Flat undergraduate enrollments 25% growth in graduate programs Housing occupancies at 95.5% in fall and 89.7% in spring Ramapo College - Baseline Scenario in thousands E & G Revenues Auxiliary Services Total Revenue E & G Expenditures Auxiliary Expenditures Total Expenditures Deficit FY2017 FY2018 FY2019 $ 117,689 $ 118,506 $ 120,692 40,513 40,261 40,174 158,202 158,766 160,866 124,971 35,794 160,764 129,002 34,534 163,536 131,728 36,268 167,996 (2,562) (4,770) (7,130) Balancing Measures to Consider Reserves could be released to decrease deficit in FY17 Review of SPIF program and budget requests Increases to tuition, fees and housing – will review rates in connection with the current rate of inflation and the Higher Education Price Index Assessment of vacant/open positions Downside Scenarios Further reduction in State appropriations Further decline in State benefit support Decline Union in student enrollments contract settlement Financial Outlook Future Considerations Affordability Continue to balance budget Work to maintain affordability for students Enrollment Maintain strong enrollment management efforts Continue efforts to maintain strong retention Capital Continue to address deferred maintenance Expansion in accordance with the Facilities Master Plan College Goal: Financial Sustainability