1. The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator. Presented to the Finance/Facilities Committee Board of Trustees May 16, 2007 FY2008-2009 Operating Budget Priorities Discussion

2. Slide 2 Overview of Discussion Outline of decision timetable Legislative outlook Internal allocation recommendations

3. Slide 3 Decision Timetable Fiscal Year begins July 1, 2007 Committee public hearings scheduled –June 6 WFP –June 12 Lake Superior College – committee scheduled to approve budget Full Board vote scheduled June 20, 2007 Special Board meeting may be necessary

4. Slide 4 Legislative Status Conference Committee report adopted May 8 and vetoed by the Governor May 10 Reasons for veto include: –Failure to support several policy objectives –Overall spending levels in FY2010-2011 biennium Higher education funding linked to larger continuing debate over available resources New report will be adopted once overall budget deal established Timetable is uncertain

5. Slide 5 College and University Budget Planning Early March presidents were provided guidelines for preparation of operating budget materials Proceeding with assumption that higher education bill will provide for funding of compensation and other operating cost inflation Tuition planning proceeding with Board’s direction last fall College and university preliminary base budgets will not include any new funds from remaining initiatives

6. Slide 6 Operating Budget Request Table 1 – Fiscal Year 2008-2009 Biennial Budget Request ($ in millions)Appropriation Tuition Reallocation Total Base appropriation $1,204 $1,204 Infrastructure Inflation $ 57 $73 $10 $ 140 Technology $ 70 $ 70 Strategic advancements Recruitment/retention of underserved and underrepresented $ 24 $10 $ 34 STEM $ 10 $ 5 $ 15 Health care education $ 3 $ 3 Biosciences Center of Excellence $ 3 $ 3 Management innovation $ 10 $ 10 Total budget request – new funds $ 177 $73 $25 $ 275 Total budget request – base plus new funds $1,381 $1,479

7. Slide 7 Legislative Outlook Table 2 – Comparison of system request to May 8 th approved bill ($ in millions)Appropriation Tuition Reallocation Total System request - base $1,204 $1,204 System request – initiatives $ 177 $73 $25 $ 275 Total request $1,381 $73 $25 $1,479 Conference Committee Recommendation – base $1,204 $1,204 Conference Committee Recommendation – initiatives $ 150.8 $70 $25 $ 245.8 Total legislative recommendation $1,354.8 $70 $25 $1,449.8

8. Slide 8 Legislative Outlook – cont. Table 3 – FY2008-2009 Operating Budget Recommendations (May 8 th bill) ($ in thousands) Request Approved Difference Base Allocation$1,204,388 $1,204,388 $ 0 Inflation$ 56,857 Technology$ 70,000 Recruit/Retain Under-represented students$ 24,000 Subtotal$ 150,857 $ 135,408 ($15,449) STEM$ 10,000 ($10,000) Biosciences$ 3,000 ($ 3,000) Health Care$ 3,000 ($ 3,000) Management Innovations$ 10,000 ($10,000) Total Request$ 176,857 $ 135,408 ($41,449) Other items in bill $ 15,346 Total New Funds $ 150,754

9. Slide 9 Internal Allocation Recommendations Guidelines for state operating appropriation Guidelines for initiatives not supported by legislature New allocation directions from legislature

10. Slide 10 Internal Allocation Recommendations – cont. Base allocation: Funds distributed through allocation framework. Inflation: Funds distributed based on each college/university’s percent share of FY2007 base allocations. Technology: A portion of funds distributed to all colleges and universities based on enrollment; remainder of funds directed toward system-wide Information Technology Enterprise investments. Recruitment and Retention: Original proposal provided two- thirds funds distributed to all colleges and universities based on low income and first generation student counts; balance awarded through a competitive grant basis. Staff will make final recommendation when funding level is known.

11. Slide 11 Open Issues Overall state resources available Timetable for final legislative action Special language restrictions Support for un-funded board initiatives Linkage of campus budget plans to action plan progress

12. Slide 12 Decision Timetable Fiscal Year begins July 1, 2007 Committee public hearings scheduled –June 6 WFP –June 12 Lake Superior College – committee scheduled to approve budget Full Board vote scheduled June 20, 2007 Special Board meeting may be necessary