1. 1 Higher Education and Florida’s Economy in 2027 Mark Rosenberg, Chancellor, State University System Judy Genshaft, President, University of South Florida Joe Shepard, VP for Administration and Finance, Florida Gulf Coast University August 1, 2007

2. 2 Where Will the State Get 10 Million Graduates? What Quality Should Students Expect? How Will Their Education be Financed? Three Key Questions

3. 3 2 + 2 System Works – Strong Partner Relationship with Community Colleges Accountability is the Cornerstone of Any Effective System—We Are Performance Oriented Cheaper is Not Always Better Operating Assumptions

4. 4 One Million More 18-34 Year-Olds by 2027 SUS AGE GROUPS

5. 5 18-34 Population by Race/Ethnicity

6. 6 Minority Participation Rates Will Shape the Future

7. 7 How Much Education Do We Expect for Today’s Newborns? 2027 SUS Bachelor Degrees 2027 SUS Enroll- ment 2027 SUS Core Budget (Billions) Increase 2007 Baseline46,000294,000$ 3.0- Status Quo: No change in student achievement 56,000 369,000 $ 3.826% 1/3 of children complete college 63,000 413,000 $ 4.241% 1/2 of children complete college 95,000 627,000$ 6.4113% Does not include future inflation. Based on current funding/student. Add 12% to reach national average level of funding.

8. 8 Quality Suffers When Funding Lags Behind Rising Enrollment and Costs Constant 2005-06 dollars, adjusted using the Higher Education Price Index at www.commonfund.org. Full- and part-time tenured and tenure track and multi-year contract facultywww.commonfund.org

9. 9 Sources of the $8.2 Billion Operating Budget 53.8 %

10. 10 Expenditures from the Core Budget

11. 11 Sources of State Funds for Construction: $4 Billion from 1996-2008

12. 12 Approx. $20,000 annually in additional earnings over HS Diploma ($16,000 for women, $24,000 for men) =$2,000 more in annual state/local taxes =$50,000 more in state/local taxes over 25 years 50,000 annual degrees = $25 billion more in career income, $2.5 billion in long-term state/local tax revenue The ROI: Economic Impact of a Bachelor Degree

13. 13

14. 14 Recommendation #1: Revise Current Use of Lottery Funds/Bright Futures Limit future growth of Bright Futures. Enhance need-based aid Increase funds to match private gifts to universities

15. 15 Protect Higher Education’s Share of Public Education Capital Outlay (PECO) Consider tax on services that require postsecondary credentials Consider additional tobacco tax (applied to manufacturers exempt from settlement) Recommendation #2: Use Dedicated Funding Streams to Improve Predictability

16. 16 $500-$1 billion annual loan volume Low interest, no principal repayments until income exceeds $30,000 1/3 forgivable for working in Florida five years 1/3 forgivable for working in a priority occupation for five years Recommendation #3: Create Large Forgivable Loan Program

17. 17

18. 18 College and University Cost Increases 2001-2007, U.S. Averages

19. 19 Average Earnings Increase by Highest Degree Attained (U.S.), 1991-2005 National Center for Education Statistics, Condition of Education 2006

20. 20 SUS Expenditures per Full-Time Student, 2001-02 to 2006-07 Board of Governors, State University System of Florida Instruction and research per FTE Admin and Support per FTE 2001-02$8,663$1,651 2006-07$8,220$1,437 5-Year Change-5%-13%

21. 21 Change in Southern States’ Spending per Student on Public Universities, 2001-2006 Board of Governors, State University System of Florida

22. 22 Total Funding per Full-Time Equivalent Student—History and Current Situation Board of Governors, State University System of Florida Post 9/11 cuts No cut -4% -10%Lottery introduced to enhance education funds Recession CURRENT OPTIONS Constant 2005-06 dollars per FTE

23. 23 Funding per Full-Time Equivalent Student and Student/Faculty Ratios Board of Governors, State University System of Florida

24. 24 4% Reductions We Can’t Afford 17,000 Students... or University of North Florida... or 1,000 faculty... or All four law schools and all 10 history departments... or All travel, library purchases, and ??? (still not 4%) Board of Governors, State University System of Florida

25. 25 10% Reductions We Can’t Afford 42,000 Students... or FIU... or IFAS and all four law schools... or All assistant professors... or All 10 business schools... Board of Governors, State University System of Florida

26. 26 Scale of 4% and 10% Cuts in Operational Terms Board of Governors, State University System of Florida 4%10% Budget Cut Amount$100,000,000$250,000,000 equivalent to Enrollment Reduction 17,000 42,000 or Faculty Reduction 1,000 2,500 or Library Books not Purchased1,500,0003,700,000 or Support Personnel: Police Officers, Counselors, Advisors, Other Student Support 2,000 5,000

27. 27 Efficiency Board of Governors, State University System of Florida

28. 28 Florida’s Graduation Rates are High Relative to Funding Board of Governors, State University System of Florida Funds per FTE (05-06) Graduation Rate %, (99-05) Virginia 12,25965.5 Delaware 20,29364.5 South Carolina 14,21859.7 North Carolina 13,49659.1 Florida 11,80858.8 Maryland 16,56258.6 Texas 12,33955.0 Alabama 12,13748.6 Georgia 11,62148.3 Mississippi 12,55448.2 Tennessee 11,81846.4 Kentucky 14,28845.9 Oklahoma 10,57345.9 West Virginia 9,34745.4 Arkansas 11,93938.8 Louisiana 9,00235.7 SREB states 12,32752.5 US Avg54.1 Notes: 1)Average % of freshmen who graduated from the same institution within six years.Including in- system transfers, the six-year SUS graduation rate is 63.7%, but comparable data not available for other states. 2)The average time from freshman enrollment to degree is 4.2 years.

29. 29 Comparison of Direct and Indirect Expenditures Per Credit Board of Governors, State University System of Florida INDIRECT EXPENDITURES 2001-022004-052005-06 1 YEAR CHANGE 4 YEAR CHANGE Lower$103.25$95.82$96.470.7%-6.6% Upper$132.39$124.21$122.07-1.7%-7.8% Grad I$193.98$179.95$186.153.4%-4.0% Grad II$247.14$234.65$229.78-2.1%-7.0% DIRECT EXPENDITURES 2001-022004-052005-06 1 YEAR CHANGE 4 YEAR CHANGE Lower$88.41$83.00$85.493.0%-3.3% Upper$145.54$141.59$137.39-3.0%-5.6% Grad I$339.10$336.22$335.24-0.3%-1.1% Grad II$601.19$580.91$531.59-8.5%-11.6%

30. 30 Inflation-Adjusted Spending Per Upper- Division Credit Hour Board of Governors, State University System of Florida 2001-022004-052005-06 4-Year Change AGRIBUSINESS & AG. PRODUCTN$475$445$398-16% ARCHITECTURE & ENVIR. DESIGN$429$341$392-8% MASS COMMUNICATIONS$226$229$24910% COMPUTER & INFO. SCIENCE$260$360$37042% EDUCATION$304$272$248-18% ENGINEERING$485$442$400-17% FOREIGN LANGUAGES$263$245$237-10% LETTERS$236$240$2360% LIFE SCIENCES$317$290$309-2% PHYSICAL SCIENCES$468$445$435-7% PSYCHOLOGY$232$205$210-10% SOCIAL SCIENCES$250$212$215-14% VISUAL AND PERF. ARTS$407$387$363-11% HEALTH PROFESSIONS$353$329$285-19% BUS.AND MANAGEMENT$199 $2011% Total$278$266$259-7%

31. 31 Funding Comparisons Board of Governors, State University System of Florida

32. 32 Funding Change for Public Universities, Florida and SREB States, 2001-2006 Board of Governors, State University System of Florida From Southern Regional Education Board (SREB), Florida Featured Facts 2007

33. 33 Cuts Would Further Erode Florida’s Relative Position in the South Board of Governors, State University System of Florida

34. 34 Cuts Would Further Erode Florida’s Relative Position in the South Board of Governors, State University System of Florida

35. 35 Change in Southern States’ Spending Per FTE University Student Board of Governors, State University System of Florida 2005-062000-01Change South Carolina14,21811,0813,137 Delaware20,29317,9342,360 Louisiana9,0027,9871,016 Kentucky14,28813,434855 Texas12,33911,609730 Alabama12,13711,483654 Tennessee11,81811,263555 Oklahoma10,57310,074499 North Carolina13,49613,049447 SREB states12,32711,974353 Maryland16,56216,242320 Mississippi12,55412,436118 Arkansas11,93911,86179 West Virginia9,3479,356-9 Virginia12,25912,618-359 Florida11,80812,488-680 Georgia11,62113,191-1,570

36. 36 Funding History Board of Governors, State University System of Florida

37. 37 Inflation-Adjusted Funding Per FTE Compared to 1991 Levels Board of Governors, State University System of Florida

38. 38 Library Cost Increases--Examples Board of Governors, State University System of Florida 20002007Increase Average Print Journal Subscription Price$370$ 63571% Statewide Contracts for Electronic Journals/Databases (FL Center For Library Automation) 20002007Increase Cost of Databases/Journals Maintained in 2000$1,600,000$ 2,000,00023% New Databases/Journals-1,300,000 Total1,600,000 3,300,000107%

39. 39 Impact of Current Funding Levels Board of Governors, State University System of Florida

40. 40 Beginning Spanish Section Sizes Board of Governors, State University System of Florida

41. 41 Freshman Composition Section Sizes Board of Governors, State University System of Florida

42. 42 Organic Chemistry Section Sizes Board of Governors, State University System of Florida

43. 43 Physical Chemistry Section Sizes Board of Governors, State University System of Florida

44. 44 Intro Biology Section Sizes Board of Governors, State University System of Florida

45. 45 Business Plan / Tuition Freeze Board of Governors, State University System of Florida

46. 46 What Would it Take to Increase Funding 8% Annually? Board of Governors, State University System of Florida Combinations leading to an 8% average increase, assuming 2% enrollment growth: Opt. 1Opt. 2Opt. 3Opt. 4Opt. 5 State funds increase0%5%7.5%8.5%10.5% Average tuition increase18%12%7.5%5%0% Average revenue increase8% 8%*8% Note that a tuition increase of 7.5% with enrollment growth of 2% would generate tuition revenue growth of 9.5%

47. 47 Effect of Growth Freezes on Total System Enrollment (1000s) Board of Governors, State University System of Florida 20072008200920102011201220132014 Meet all growth in demand (no freeze) 302 310 318 325 331 337 341 344 Freshman growth freeze only 299 303 307 311 315 318 320 323 Freeze new student growth at all levels except AA transfers 299 302 305 308 310 312 314 315 Freeze all new admissions 298 300 301 Reduce admissions 1% per year, increase retention rate 1% per year 298 300 301

48. 48 Effect of Freezing Freshman Enrollment Growth Board of Governors, State University System of Florida 20002005200620072008201020122014 Growth at same rate as Bright Futures / HS graduates31,10038,50038,30040,90042,50044,30044,50044,600 No growth in freshman class31,10038,50038,300 Difference0002,6004,2006,0006,2006,400

49. 49 System Enrollment (1000s) Based on Selected Policy/Budget Scenarios Board of Governors, State University System of Florida

50. 50 Board of Governors, State University System of Florida How Close are Universities to 40% Fee Cap?

51. 51 Background Data on SUS Board of Governors, State University System of Florida

52. 52 SUS Fall Enrollment Since 1990 Board of Governors, State University System of Florida 19901995200020052006 FAMU8,37910,27712,16112,17611,913 FAU13,18018,13721,46625,99425,657 FGCU--3,6537,2548,316 FIU22,52828,21631,45837,42438,537 FSU28,82430,30134,48539,66840,378 NCF---763746 UCF21,69426,71533,97545,09046,907 UF36,33839,70345,90050,29851,314 UNF8,09310,49212,76215,42016,091 USF32,72736,34336,37943,59144,251 UWF8,0128,3098,5149,6579,906 Total179,775208,493240,753287,335294,016

53. 53 SUS Degrees Since 1990-91 Board of Governors, State University System of Florida 90-9195-9600-0104-0505-06 Bach 26,40332,21035,72443,30445,015 Doctorate 7601,0581,2211,5181,618 First Prof 1,0331,0021,2451,5841,674 Masters 6,3678,80710,76613,36512,908 Total34,56443,07748,95659,77161,215

54. 54 Undergraduate Residency Since 1990 Board of Governors, State University System of Florida 19901995200020052006 Florida 89.5%91.6%91.4%94.0%94.5% Non- Florida 10.5%8.4%8.6%6.0%5.5% Total100%

55. 55 Enrollment by Race/Ethnicity Since 1990 Board of Governors, State University System of Florida 19901995200020052006 Asian 2.7%3.8%4.3%4.6%4.7% Black 9.8%12.6%14.4%14.0%13.9% Hispanic 9.4%12.6%14.0%16.2%16.9% Native Indian 0.1%0.3%0.4% NonRes Alien 3.3%3.5%4.3% 3.8% White 74.1%66.9%61.5%58.7%58.6% Not Reported 0.5%0.4%1.1%1.8% Total100%

56. 56 What Are Some Leading Indicators? Board of Governors, State University System of Florida

57. 57 Are We Becoming More Selective? Board of Governors, State University System of Florida

58. 58 What is Our Market Share? Board of Governors, State University System of Florida

59. 59 Are Freshmen Better Prepared? Board of Governors, State University System of Florida

60. 60 What is the Market Share of the Community Colleges for Bachelor Ed? Students Credit Hours Bachelor Degrees St. Petersburg1,49821,753223 Miami Dade2263,7770 Okaloosa- Walton2131,5932 Chipola12 5491 Board of Governors, State University System of Florida