Salisbury University
Strategic Planning Team
Financial - Environmental Scan
October 2002
Trends - General
• Declining State Support as % of Budget
• Competing with other social goods
• Change in philosophical reasons for public
education
– Informed Citizens in a democracy
– Work Force Demands
– Private Income Enhancement
Trends - General
• Higher Ed seen as cost not investment
• Big Government vs. Privatization
• Middle Class Entitlements
• Culture of Evidence
– Calls for outcomes assessment
Trends - General
• In economic downturns, enrollment
usually increases
• Revenue generated by this demand is
usually offset by limited supply and
marginal cost increases
Other States
• Virginia
– Projects at least a $2 billion deficit in FY 2003
– Has had consecutive 8% and 15% cuts in funding for
FY 2003
• Education has been hit with layoffs and funding reductions
– UVA has lost $23.4 million in general funds for FY2003, with
another $33.3 million reduction expected in FY2004
– UVA had initial tuition increase of 8.9%, but has approval for a
mid-year increase of $200 per full-time student
– George Mason increased tuition and fees by almost 25%
• Pennsylvania
– Penn State University has had a 5% general fund
reduction in FY 2003 ($16.7 million)
• West Virginia
– Anticipate a $200 million state deficit
• Preliminary 3% across the board general fund reduction
• New Jersey
– $3.8 million dollar reduction (6.59%) on Department
of Education
• North Carolina
– For FY 2003 University of North Carolina system has
increased tuition by 8% and 12% respectively for instate and out-of-state students
– Eliminated 1,070 positions
– Reduced general funds by $131 million in recurring
activities
Tuition & Fee Increases
Full-Time In-State Students
$1,200
$986
$1,000
$782
$800
$670
$600
$559
$544
$447
$400
$318
$286
$200
$359 $350
$292
$174
$112
$76
$0
FY 01 to FY 02
SU
PSU
WVU
FY 02 to FY 03
UVA
UD
UNCW
TCNJ
Tuition & Fee Increases
Full-Time Out-of-State Students
$3,000
$2,500
$2,388
$2,000
$1,592
$1,471
$1,500
$1,231
$1,128
$1,012
$1,000
$894
$859
$945
$878
$626
$500
$790
$626
$470
$0
FY 01 to FY 02
SU
PSU
WVU
FY 02 to FY 03
UVA
UD
UNCW
TCNJ
Maryland Economy
• Estimated $400 million deficit in FY 2003
and $1.3 billion deficit in FY 2004
• State hiring freeze
USM
• Funding Guideline
– Diminishing state allocation per FTES
• Mandatory increases from the state
– Debt Service ($107,024)
– Health Benefits (≈ $200,000)
– Workmens Compensation (varies)
Possible Responses
• Cost Containment
– 80% of budget is wages and benefits
– Re-engineering, streamlining operations
– Economies of scale
• Collaborative ventures with UMES
– Incentives for good managers
– Eliminate lower priority services, programs
– Outsourcing
Possible Responses
• Revenue Enhancement
– Enrollment Growth to fill unoccupied seats
– Innovative delivery systems
• Appropriate technology
• Blended courses
– New Markets
• Off campus
• Weekends
Possible Responses
• Revenue Enhancement
– Non-credit activities
• Grants
• Contracts
• Federal Earmarks
• Non-credit courses, workshops
Possible Responses
• Revenue Enhancement
– Private Giving
– Corporate and Private Foundations
– Planned Giving