1. Oakland University Fiscal Year 2006 Budget Report Oakland University Senate November 17, 2005

2. Economic Update

3. Economic Review Following the 2001 recession, the U.S. economy did not experience much improvement until the spring of 2003. Since this time, U.S. employment has increased by 4.2 million jobs or 3.2% The Michigan economy has shown little improvement since the 2001 recession. Since June 2000, Michigan employment has declined by 336,500 jobs or 7.2% During the same period, Michigan has lost 26.6% of its manufacturing jobs. Source: “State Budget History, Economic Update, and State University Funding”, Ellen Jeffries, Senate Fiscal Agency

4. Economic Review (continued): U.S. economic activity is expected to continue to improve during the last half of 2005 through 2006. The U.S. unemployment rate will decline from 5.5% in 2004 to an estimated 5.1% in 2006. Michigan economic activity is expected to finally experience some modest growth in the last half of 2005 through 2006; but this growth will not be strong enough to generate much improvement in the State’s labor market. Michigan’s unemployment rate measured 7.1% in 2004, and it is expected to edge up to 7.2% in 2005 and 7.4% in 2006. Source: “State Budget History, Economic Update, and State University Funding”, Ellen Jeffries, Senate Fiscal Agency

5. Revenue Review General Fund/General Purpose revenue will total an estimated $8.21 billion in FY 2005-06, which represents a 2.7% increase from the FY 2004-05 level. This increase would mark the first increase in GF/GP revenue since FY 1999-2000. The estimated GF/GP revenue level for FY 2005-06 is down from the FY 1999-2000 level by 16.2% Source: “State Budget History, Economic Update, and State University Funding”, Ellen Jeffries, Senate Fiscal Agency

6. Growth in Adjusted Gross Appropriations by Major Program Areas FY 1994-95 to FY 2003-04 (Actual Dollars) Source: “State Budget History, Economic Update, and State University Funding”, Ellen Jeffries, Senate Fiscal Agency Program AreaDollar Difference% Change Transportation$ 1,395,707,00076.5% Capital Outlay203,607,20061.7 Human Service Support4,690,197,00049.7 K-12 Education3,759,298,00042.9 Corrections488,145,40040.2 General Government Operations216,117,70032.8 Public Safety196,882,30029.9 Econ. Development & Regulatory232,510,70024.1 Higher Education295,861,80018.1 Revenue Sharing136,257,90011.6 Agriculture and Natural Resources(22,808,300)(2.6) Total Appropriations$ 11,591,780,00042.1%

7. Making the Case in Lansing Progress in Communicating Our Message Despite limited resources, state elected officials continue to address the needs and concerns of universities like Oakland Economic Outlook Uncertain Although state revenues have significantly improved in recent months, Michigan still trails the rest of the nation and is plagued by the uncertainty of the manufacturing industry, particularly automotive Opportunities for state funding for applied and basic research, technology transfer and commercialization may be forthcoming under the economic stimulus package currently being negotiated at the state level

8. O.U. Appropriation per FYES 1996199920012004 2006 Oakland University’s FY 2006 appropriation per FYES is projected to be $399 per FYES less than the 1996 level.

9. Since 1992, Oakland University’s relative reliance on tuition and fees in the General Fund has grown from 41% to a projected 64% in 2006. Comparison of General Fund Revenue Sources FY 1992, FY 2002 and FY 2006 Budget Projected

10. Comparison of State Appropriation Average Percentage Increase Versus OU Percentage Appropriations increase

11. State Appropriation Fiscal Year 2005-2006 Beginning FY 2005 Base State Appropriation$ 48,106,100 Executive Order 2005-7 (March 2005)($ 844,800) Appropriation Increase – FY 2006 State Budget$3,424,400 FY 2006 Projected Base Appropriation$ 50,685,700 Percentage Change5.4%

12. Academic Affairs – FY 2006 Incremental Budget Allocations Faculty Contractual Commitment$ 300,000 Faculty Base Increase1,261,206 Off Campus/CE Programs695,702 Spring Summer Operating Support258,663 Faculty Contract Research and Travel26,000 Indirect Cost Recovery Allocation Est.270,000 General Education149,751 Graduate Education200,900 Research Startup100,000 General Operating Budget Support104,804 Course Fee Allocation88,700 Meadow Brook Art Gallery75,000 SBA Executive MBA - Health Care139,454 UTS Calendar Support Position73,010 SHS Clinical Sites19,950 Web CT and MERIT Site License325,500 Total Allocations$ 4,088,640

13. Oakland University Fall Full-Time Faculty Headcount * * Projected

14. FY 07 Approved Faculty Positions College of Arts and Sciences23 School of Business Administration4 School of Education and Human Services8 School of Health Sciences3 Kresge Library1 School of Nursing10 Total49

15. Academic Affairs – FY 2005 One-Time Fund Allocations Kresge Library Collection$ 220,000 HVAC – Computer Center200,000 Registrar Contract Employee Support103,000 Golden Grizzlies Pep Band46,100 Kresge Asst. Researcher Comp.45,337 Kresge Wireless Expansion43,187 General Purpose Classroom Imp.40,000 Upgrade Orthopedic Lab/Classroom31,000 Kresge Library Renovation27,330 UTS Calendaring Position (6 months)18,147 UTS East Campus Phone Project12,410 Shotwell Sound System10,626 Jewish Community Marketing Plan8,820 General Ed. Communications Plan4,620 Assistant Researcher (Grants)3,647 Sigma Xi Support2,500 Total One-Time Allocations$816,724

16. Focus on Support for Academic Programs Budget Incentives to Support Future Enrollment Growth Research Support and Success Capital Campaign Partnerships to Leverage Excellence

17. Budget Incentive Policies/Programs On-Campus Incentive Program -Funds to Academic Units -$208,000 for 2005 FYES Off-Campus Incentive Programs -Direct Support to Academic Units -$609,890 for 2005 programs Continuing Education -Direct Support to Academic Units -$553,261 for 2005 Programs Student Course Fee -Allocation of 60% to Academic Affairs -$1,275,397 in 2006

18. Research Support and Success Indirect Cost Recovery: -20% to Academic Units -5% to Provost -Opportunity to receive another 10% if thresholds are exceeded -$510,554 earned in 2005 -AAUP Contract additional incentive (30% of amount > $1.35M – Projection ~ $102,000 -Research Assistant Support $162,254 for approximately 31 new tuition reimbursements added in FY 2005

19. Oakland University Grant and Contract Activity Fiscal Years 2000 - 2005

20. Capital Campaign Dollars to Units As of October 2005 College of Arts and Sciences$6,513,809 School of Business Administration 4,171,172 School of Education and Human Services 3,606,905 School of Engineering and Computer Science 23,253,935 School of Health Sciences 145,689 School of Nursing 2,280,832 Academic Affairs – other12,053,680 Athletics 844,591 Student Affairs 168,365 Office of the President 514,554 Auxiliaries 8,442,906 Other 4,341,109 Total $66,337,547

21. History of Cost Containment Efforts CategoryPermanentOne-time Benefit and Employment Changes$ 894,800$ 7,400 Re-organizations1,481,700640,500 Outsourcing and Partnerships1,723,8001,189,000 Process Re-engineering367,900222,200 Technology and Telecommunications296,100102,600 Utilities/Energy Conservation950,500 Other Initiatives450,30038,200 Totals$ 6,165,100$ 2,199,900