1. January 25, 2012 TACC Focus Session 2013 Legislative Session

2. 2 Context for the 2013 Legislative Session ‣ Economics/Budget Projections ‣ Political Landscape ‣ Policy Trends/Performance Funding/REV

3. 3 Economics/Budget Projections

4. 4 Funding of State Government (in billions) 2010-112012-13$ diff% diff General Revenue (includes GR-D) $90.2 B$81.3 B- $8.9 B9.9% All Funds$187.5 B$173.5 B- $14 B- 7.5% Source: Legislative Budget Board, June 2011

5. 5

6. 6 Recessionary Period Current Budget Passed

7. 7

8. 8 ✴ Issues for the Next Session Public Education: ‣ Legislature provided $4.0 billion less in funding than what current formulas would have required. ‣ Numerous lawsuits are underway.The $2.3 billion August 2013 payment is deferred to September. Health and Human Services: ‣ LBB estimates funding for Medicaid is $4.8 billion below what law will actually require.Medicaid funding will “run out” in March of 2013.Legislature will have to tap the Rainy Day Fund for the shortfall.

9. Fiscal Situation for 83rd Legislature deficit $2.3 billion School Aid Deferral 2012-13

10. Fiscal Situation for 83rd Legislature deficit $4.6 billion School Aid Deferral 2012-13 School Aid Deferral 2014-15

11. Fiscal Situation for 83rd Legislature deficit $4.9 billion School Aid Deferral 2012-13 School Aid Deferral 2014-15 Unclaimed Property 2012-13

12. Fiscal Situation for 83rd Legislature deficit $5.2 billion School Aid Deferral 2012-13 School Aid Deferral 2014-15 Unclaimed Property 2012-13 Taxes 2012-13

13. Fiscal Situation for 83rd Legislature deficit $5.5 billion School Aid Deferral 2012-13 School Aid Deferral 2014-15 Unclaimed Property 2012-13 Taxes 2012-13 Taxes 2014-15

14. Fiscal Situation for 83rd Legislature deficit $5.9 billion School Aid Deferral 2012-13 School Aid Deferral 2014-15 Unclaimed Property 2012-13 Taxes 2012-13 Taxes 2014-15 Fuels Tax Transfers 2012-13

15. Fiscal Situation for 83rd Legislature deficit $6.3 billion School Aid Deferral 2012-13 School Aid Deferral 2014-15 Unclaimed Property 2012-13 Taxes 2012-13 Taxes 2014-15 Fuels Tax Transfers 2012-13 Fuels Tax Transfers 2014-15

16. Fiscal Situation for 83rd Legislature deficit $11.1 billion School Aid Deferral 2012-13 School Aid Deferral 2014-15 Unclaimed Property 2012-13 Taxes 2012-13 Taxes 2014-15 Fuels Tax Transfers 2012-13 Fuels Tax Transfers 2014-15 Rainy Day Medicaid 2012-13

17. Fiscal Situation for 83rd Legislature deficit $20.1 billion School Aid Deferral 2012-13 School Aid Deferral 2014-15 Unclaimed Property 2012-13 Taxes 2012-13 Taxes 2014-15 Fuels Tax Transfers 2012-13 Fuels Tax Transfers 2014-15 Rainy Day Medicaid 2012-13 Structural Deficit ($9 B est.)

18. 18 Political Landscape

19. 19 Policy Trends/Performance Funding/REV

20. 20

21. 21

22. 22 Reaching Escape Velocity (REV) The TACC Student Success Movement

23. 23 Goals to Reaching Escape Velocity ‣ Creation of a movement, not an initiative ‣ Organic movement owned by the colleges ‣ Comprehensive movement to address complex and interrelated issues ‣ Sole focus of the movement is to improve student success

24. 24 Components of the REV Movement ‣ Structure for scanning, inventorying, and evaluating current initiatives and promising practices to improve student success ‣ Universally accessible infrastructure for success ‣ Focus on scaling best bets for success ‣ Communication of REV activity to multiple audiences ‣ Policy and Advocacy ‣ Continuous improvement and commitment to continued innovation

25. 25 Internal Context ‣ TACC Role TACC Staff External Lobbyist JACC-PAC ‣ Stakeholders Advocates Network Trustees and CCATT TCCTA and other internal groups External interest groups

26. 26

27. 27 The Ask - 2013 Legislative Session ‣ Report on Formula, Benefits, etc. ‣ Discussion

28. 28 General Revenue State of Texas

29. 29 Summary 29

30. 30 Other Funds in HB 1 82nd Texas Legislature

31. 31 All Funds to CCs: 2010-11 biennium 76% 14% 8% 76% 14% 8% <1%

32. 32 All Funds to CCs: 2012-13 biennium 84% 10% 5% 84% 10% 5% <1% 0% <1%

33. 33 Formula & Employee Benefits $1.8 B$1.7 B $323 M $198 M $202 M $104 M

34. 34 Unrestricted Funds: 1975-2010

35. 35 Formula Funds

36. 36 Instructional Formula Funds (in billions) ✴ $1.737 billion for 2012/2013 biennium ✴ Compared to $1.844 billion for 2010/2011 biennium ✴ A decrease of $107.7 million--5.8% billion

37. 20.4% increase 14.9% increase Base Year Contact Hours (in millions) million 37

38. 38 Appropriation per Contact Hour (annual) 21.8% decrease $ per contact hour

39. 39 Recommendations of CTC Formula Advisory Committee

40. Community College Formula Formula system put in place in 1974 The primary mechanism for state funding of community colleges since that time. 3 components: ‣ Annual cost study (RFOE) ‣ Contact hour as the basic unit of enrollment ‣ Formula rates provide the differentiated costs among instructional programs CC Formula = Base Year Contact Hours X Formula Rates (26 Instructional Categories)

41. 41 Community College Formula Formula Rates 41 Report of Fundable Operating Expenses

42. Percent of RFOE (full formula) Report of Fundable Operating Expenses

43. Percent of THECB Recommendation

44. 44 Benefits Group Health Insurance (HEGI) Retirement (ORP/TRS)

45. 45 Group Health Insurance (in millions) 38.6% decrease million

46. 46 Retirement (TRS & ORP) (in millions) 48.2% decrease million

47. 47 Reallocation of Formula Funds FY 2013

48. 48 Strategies for Messaging

49. 49 People don’t want more information. They are up to their eyeballs in information. They want faith—faith in you, your goals, your success, in the story you tell… Once people make your story their story, you have tapped into a powerful force. —Annette Simmons

50. 50 Strategies for Engagement