Minnesota State Colleges and Universities
2016-2017 Operating Budget Discussion
CFO Conference
December 12-13, 2013
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.

3.5
3
2.5
2
1.5
1
0.5
0
State Budget Drivers:
Economic Growth
2.8
Real Gross Domestic Product
Annual Percent Change
3.3
3.1
2.9
2.8
2.5
3.3
2.2
1.9
1.7
2012 2013 2014
February 2013
2015 2016
November 2013
2.8
3.1
2017
2

3
7
6
5
4
3
2
1
0
8
State Budget Drivers:
Unemployment Rate
Minnesota Unemployment %
2010 2011 2012 2013 2014 2015 2016 2017

State Budget Drivers:
Inflation
4
 Inflation outlook expected to remain quiet through 2017
2.0%
1.70%
Inflation Trends
1.80%
1.90% 1.90%
1.5%
1.0%
0.5%
0.0%
FY2014 FY2015 FY2016 FY2017

5
2014-2015 State Budget Outlook
 FY2014-15 budget outlook has improved, driven by increased revenue projections
 Five successive positive forecasts complete repayment of accounting shifts
 $825 million projected balance remains at end of FY2015
 Minnesota’s economy remains strong, state revenues benefit
 U.S. economic outlook is slightly weaker

6
Significant Gain in Forecast Revenues
($ in millions)
Income
Sales
Corporate
Statewide Property Tax
Other Tax Revenue
Taxes Subtotal
Non-tax Revenues
Other Resources
Total Revenues
FY 2014-15
$19,372
10,194
2,675
1,670
3,541
$37,451
1,427
331
$39,209
$ Change
$496
64
254
(16)
27
$824
(22)
(15)
$787

Revenue Forecast Uncertainties
 Federal policy issues
 Early 2014 fiscal policy deadlines
 Federal reserve actions
 Continuing economic recovery
 Manufacturing
 Construction
 Income shifting in response to federal taxes
 More revenue from less predictable sources
 Non-wage income
 Corporate profits

8
2016-2017 State Budget Outlook
 FY2016-17 state budget outlook has improved
 Structural balance maintained as revenue growth exceeds spending
 $2.2 billion structural balance projected for the FY2016-17 biennium (without inflation estimate)
 $1.2 billion structural balance (with inflation estimate)

9
2016-2017 State Operating Budget
Outlook
FY 2016-17 Planning Estimates: Comparison to Current
Biennium ($ in millions)
FY 2014-15 FY 2016-17 $ Change % Change
Projected Revenues 39,209 42,981 3,771 9.6
Estimated Spending 39,067 40,783 1,716 4.4

December, 2013 – July 1, 2015
 18 months to the end of the biennium and start of new biennial budget
 2014 and 2015 legislative session
 February, 2014, November, 2014 and February, 2015 forecasts
 Two sessions of congress
 Federal and state tax law changes possible – impacting state revenue outlook
 National economic performance underpins Mn performance
 Federal budget and debt ceiling discussions loom over economic forecast
10

11
MnSCU FY2016-2017 Budget Planning
 Leadership Council and Chancellor will begin consultation with campuses, students and bargaining units in the spring
 Continued legislative interest in tuition and student debt pressures
 Enrollment management and student success key drivers
 Focus on collaboration and metrics for success
 Continuing themes around student success, affordability and serving regional workforce needs.