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Faculty CouncilFaculty CouncilSeptember 15, 2003September 15, 2003
22
Today’s AgendaToday’s Agenda
Recent History & Legislative Session Outcome
Outcomes from Legislative Session Outcomes from Legislative Session that Impact Benefitsthat Impact Benefits
University Finances & Budget Overview
33
Recent History & Legislative Session Outcome
44
New LeadershipNew Leadership
2002 Elections2002 Elections
Lt. Governor David Dewhurst Lt. Governor David Dewhurst
7 State Senators7 State Senators
31 State Representatives31 State Representatives
House Speaker Tom CraddickHouse Speaker Tom Craddick
Chairmanships and Committee Chairmanships and Committee AssignmentsAssignments
55
State of the StateState of the State
State faced $10 billion shortfallState faced $10 billion shortfall
7% reduction for 2003 fiscal year requested of all state 7% reduction for 2003 fiscal year requested of all state agenciesagencies
State agencies and institutions asked to reduce State agencies and institutions asked to reduce 2004-2005 budget request by 12.5%2004-2005 budget request by 12.5%
66
State Budget OutcomeState Budget Outcome
All FundsAll Funds
$117.4 billion ----- up 1.4%$117.4 billion ----- up 1.4%
General RevenueGeneral Revenue
$58.2 billion ----- down 4.3%$58.2 billion ----- down 4.3%
Higher Education, General RevenueHigher Education, General Revenue
down by 1.7%down by 1.7%
77
140 days = 1,383 New Laws140 days = 1,383 New Laws
Over 5,700 bills/resolutions consideredOver 5,700 bills/resolutions considered
1,383 passed (24%)1,383 passed (24%)
UT Austin tracked over 1,400 bills UT Austin tracked over 1,400 bills
23% passed23% passed
88
Significant Legislation Significant Legislation for Higher Educationfor Higher Education
Tuition FlexibilityTuition FlexibilityHB 3015 (Rep. Morrison/Sen. Shapiro)HB 3015 (Rep. Morrison/Sen. Shapiro)
100% Indirect Cost Return100% Indirect Cost ReturnHB 1887 (Rep. Morrison/Sen. Ratliff)HB 1887 (Rep. Morrison/Sen. Ratliff)
Administrative EfficienciesAdministrative Efficiencies SB 1652 (Sen. Shapiro/Rep. MorrisonSB 1652 (Sen. Shapiro/Rep. Morrison))
99
Tuition FlexibilityTuition Flexibility
Authorizes Board of Regents to set Authorizes Board of Regents to set designated tuition charged to studentsdesignated tuition charged to students
12-member legislative oversight 12-member legislative oversight committeecommittee
Tuition set asides for financial aid:Tuition set asides for financial aid:
20% for undergraduates20% for undergraduates
15% for graduates15% for graduates
1010
Indirect CostIndirect Cost
Allows institutions to retain full 100% of Allows institutions to retain full 100% of indirect cost return on researchindirect cost return on research
Represents additional $39 million for Represents additional $39 million for
UT AustinUT Austin
1111
Administrative EfficienciesAdministrative Efficiencies
Financial ManagementFinancial Management
Human ResourcesHuman Resources
Information TechnologyInformation Technology
RegulatoryRegulatory
ReportingReporting
1212
Top 10%Top 10%
Preliminary Fall 2003 enrollment: Preliminary Fall 2003 enrollment: 75% of incoming 75% of incoming freshman Texas freshman Texas
residents would be automatically admittedresidents would be automatically admitted
An amendment to SB 86 would have capped the An amendment to SB 86 would have capped the automatic admissions at 60% of entering automatic admissions at 60% of entering freshmen classfreshmen class
SB 86 filibustered on last night of session ....... SB 86 filibustered on last night of session ....... and diedand died
1313
Other Legislation of InterestOther Legislation of Interest
Texas Enterprise Fund (SB 1771)Texas Enterprise Fund (SB 1771)$295 million/Governor’s Office$295 million/Governor’s Office
Texas Higher Education Coordinating Board Texas Higher Education Coordinating Board Sunset legislation (SB 286)Sunset legislation (SB 286)
CB membership: 18-9CB membership: 18-9““Success Initiative” ( replaced TASP)Success Initiative” ( replaced TASP)Doctoral Incentive Loan ProgramDoctoral Incentive Loan ProgramPilot program for 3 community colleges to Pilot program for 3 community colleges to
offer bachelor’s degrees (selected offer bachelor’s degrees (selected programs)programs)
1414
Major Studies Relating Major Studies Relating to Higher Educationto Higher Education
Legislative Oversight Committee on Legislative Oversight Committee on Higher EducationHigher Education
((HB 3015 Tuition FlexibilityHB 3015 Tuition Flexibility))
Study of Student Financial Aid Programs Study of Student Financial Aid Programs
((Coordinating BoardCoordinating Board))
Select Committee on Higher Education Select Committee on Higher Education ((SB 1652 Administrative EfficiencySB 1652 Administrative Efficiency))
1515
Legislative Standing CommitteesLegislative Standing CommitteesInterim Study ChargesInterim Study Charges
House Higher Education CommitteeHouse Higher Education Committee
Senate Education CommitteeSenate Education Committee
Senate Subcommittee on Higher Senate Subcommittee on Higher EducationEducation
House Appropriations CommitteeHouse Appropriations Committee
Senate Finance CommitteeSenate Finance Committee
1616
Other Interim ActivitiesOther Interim Activities
General Studies (General Studies (various legislation enacted by Legislature)various legislation enacted by Legislature)
Interagency Work Group on Rural IssuesInteragency Work Group on Rural Issues
Study and Implementation of Seawater DesalinationStudy and Implementation of Seawater Desalination
Texas Traumatic Brain Injury Advisory CouncilTexas Traumatic Brain Injury Advisory Council
Nutrition and Health in Public SchoolsNutrition and Health in Public Schools
Water and Health Issues Along the BorderWater and Health Issues Along the Border
1717
Outcomes from Legislative Outcomes from Legislative Session that Impact BenefitsSession that Impact Benefits
1818
Outcomes from Legislative Outcomes from Legislative Session that Impact BenefitsSession that Impact Benefits
Reduction in State Premium Sharing for Reduction in State Premium Sharing for Part Time Employees: Impacts both Part Time Employees: Impacts both individual and dependant coverage.individual and dependant coverage.
90-day wait period related to eligibility for 90-day wait period related to eligibility for medical benefits.medical benefits.
Carve out for Graduate Student Workers.Carve out for Graduate Student Workers.
90-day wait period for Retirement Plan 90-day wait period for Retirement Plan Participation.Participation.
1919
How is UT Austin addressing How is UT Austin addressing the changes and options?the changes and options?
Full time: University Salary Supplement Full time: University Salary Supplement
Part time: University Salary SupplementPart time: University Salary Supplement
Changes during the year: Supplement Changes during the year: Supplement Adjusted Dynamically.Adjusted Dynamically.
90-day wait period for medical benefits will 90-day wait period for medical benefits will be transparent to the UT Austin workforce. be transparent to the UT Austin workforce. Legislation provides the ability to fund Legislation provides the ability to fund from non-general revenue sources.from non-general revenue sources.
2020
How is UT Austin addressing How is UT Austin addressing the changes and options?the changes and options?
Retirement:Retirement:– 90-day wait period for new hires for 90-day wait period for new hires for
participation in either TRS or ORP.participation in either TRS or ORP.– Will consider the entire month where the 91Will consider the entire month where the 91stst
day falls.day falls.– If services begin before the actual If services begin before the actual
appointment date, the 90-day wait does not appointment date, the 90-day wait does not apply.apply.
– New Hires can participate in the supplemental New Hires can participate in the supplemental plans on day 1.plans on day 1.
2121
Benefits UpdateBenefits Update
Continuing Employees:Continuing Employees:– Will receive salary supplement based upon Will receive salary supplement based upon
their 8/31 or 5/31 relationship with the their 8/31 or 5/31 relationship with the University and their FTE status and benefit University and their FTE status and benefit status on 9/1/03.status on 9/1/03.
– Will have salary supplement adjusted Will have salary supplement adjusted dynamically based upon FTE status and dynamically based upon FTE status and benefit status each month.benefit status each month.
2222
2323
2424
Benefits UpdateBenefits Update
Graduate Student Workers (GRAs, TAs):Graduate Student Workers (GRAs, TAs):– All continuing Graduate Student Workers will receive All continuing Graduate Student Workers will receive
both a salary supplement (for dependant coverage) both a salary supplement (for dependant coverage) and the traditional benefit supplement.and the traditional benefit supplement.
– All incoming Graduate Student Workers for 9/1/03 All incoming Graduate Student Workers for 9/1/03 and 1/1/04 will receive both a salary supplement (for and 1/1/04 will receive both a salary supplement (for dependant coverage) and the traditional benefit dependant coverage) and the traditional benefit supplement.supplement.
– A Graduate Student Benefit Committee will be put A Graduate Student Benefit Committee will be put together immediately to identify options for 9/1/04.together immediately to identify options for 9/1/04.
2525
Benefits UpdateBenefits Update
New Hires (9/1/03):New Hires (9/1/03):– Will be immediately eligible for health benefits.Will be immediately eligible for health benefits.– Will be subjected to new premium structure. Will be subjected to new premium structure.
Are not eligible for salary supplement.Are not eligible for salary supplement.
2626
CommunicationCommunicationAnnual Enrollment:Annual Enrollment:– Mass electronic communication; hard copy to those without emailMass electronic communication; hard copy to those without email– DispatchDispatch– Benefit Information Sessions:Benefit Information Sessions:
Morning/Afternoon/EveningMorning/Afternoon/EveningEnglish/SpanishEnglish/SpanishBenefit Fairs: Main Campus and PickleBenefit Fairs: Main Campus and Pickle
– Targeted Communication:Targeted Communication:Potential RetireesPotential RetireesGraduate Student WorkersGraduate Student WorkersPart Time EmployeesPart Time Employees
– HRS Web Site: University Home PageHRS Web Site: University Home Page– HR ForumHR Forum– Town Hall MeetingTown Hall Meeting
2727
2828
University Finances & Budget Overview
2929
Legislative Session Financial Legislative Session Financial OutcomeOutcome
PositivesPositives NegativesNegatives• 100% IDC Retention 100% IDC Retention
+$20M+$20M
• Tuition FlexibilityTuition Flexibility
• Continued downward Continued downward trend in State financial trend in State financial supportsupport
GR reduction GR reduction ($22M)($22M)
P/T Benefits P/T Benefits ($6M)($6M)
90 Day Wait 90 Day Wait ($2M)($2M)
TX Tomorrow TX Tomorrow ($3M)($3M)
B-on-Time B-on-Time ($?M)($?M)
Higher tuition set Higher tuition set asidesasides
$20M
-$33M
3030
Total University Total University BudgetBudget
Educational Educational & General & General ComponentComponent
59%59%
Endowment Endowment ComponentComponent
9%9%
Research Research ComponentComponent
20%20%
Auxiliary Auxiliary ComponentComponent
12%12%
$846.7M$846.7M+ 6.8%+ 6.8%
University FinancesUniversity Finances
FY03/04 Total University Budget $1.44BFY03/04 Total University Budget $1.44B
$176.6M $176.6M + 2.2%+ 2.2%
$129.1M $129.1M – 1.0%– 1.0%
$292.2M $292.2M + 12.6%+ 12.6%
$1.44B $1.44B + 4.7% + 4.7%
or $63Mor $63M
3131
University FinancesUniversity Finances
What percentage of What percentage of UniversityUniversity Budget is funded by Budget is funded by State General Revenue?State General Revenue?
30 Years 20 Years 10 Years Today
(in millions) 1972/73 1982/83 1992/93 2003/04
State GR Funding 57.9$ 168.8$ 207.7$ 291.8$
Total Budget 119.9$ 360.6$ 726.9$ 1,444.6$
Percent State Funding 48.3% 46.8% 28.6% 20.2%
adjusted for expense shift ===> 19.4%
3232
Total University Total University BudgetBudget
Educational Educational & General & General ComponentComponent
59%59%
Endowment Endowment ComponentComponent
9%9%
Research Research ComponentComponent
20%20%
Auxiliary Auxiliary ComponentComponent
12%12%
$846.7M$846.7M+ 6.8%+ 6.8%
University FinancesUniversity Finances
FY03/04 Total University Budget $1.44BFY03/04 Total University Budget $1.44B
$176.6M $176.6M + 2.2%+ 2.2%
$129.1M $129.1M – 1.0%– 1.0%
$292.2M $292.2M + 12.6%+ 12.6%
$1.44B $1.44B + 4.7% + 4.7%
or $63Mor $63M
3333
University FinancesUniversity Finances
What percentage of What percentage of AcademicAcademic Budget is funded by Budget is funded by State General Revenue?State General Revenue?
30 Years 20 Years 10 Years Today
(in millions) 1973/74 1983/84 1993/94 2003/04
State GR Funding 68.6$ 190.5$ 219.6$ 291.8$
Total ACADEMIC Budget 71.6$ 287.0$ 458.5$ 846.7$
Percent State Funding 95.8% 66.4% 47.9% 34.5%
3434
Budget AccomplishmentsBudget Accomplishments
For our StateFor our State
• Improved research competitiveness Improved research competitiveness
For our StudentsFor our Students
• Additional faculty positionsAdditional faculty positions
• Increased tuition & scholarship supportIncreased tuition & scholarship support
• Capacity to invest in specific programmatic Capacity to invest in specific programmatic initiativesinitiatives
For our EmployeesFor our Employees
• Preservation of a competitive benefit programPreservation of a competitive benefit program
• Possibility of mid-year salary programPossibility of mid-year salary program
3535
It was a challenge to balance the It was a challenge to balance the budget!budget!
Efficiency ImprovementsEfficiency Improvements
• $5M from Office Supplies & Credit Card $5M from Office Supplies & Credit Card changes…more to comechanges…more to come
Across-the-board Budget ReductionsAcross-the-board Budget Reductions
• $25M total reductions…$4M from $25M total reductions…$4M from occupied occupied positionspositions
Reduced Infrastructure FundingReduced Infrastructure Funding
• $10M reduction in an area already $10M reduction in an area already under under funded!funded!
3636
What are our Continuing What are our Continuing Challenges?Challenges?
Infrastructure Funding - $30M+ Infrastructure Funding - $30M+ annual shortfallannual shortfall
3737
Facility Aging Drives Repair & Renovation (R&R) Facility Aging Drives Repair & Renovation (R&R) RequirementsRequirementsThere is a significant bubble of R&R requirements in the near There is a significant bubble of R&R requirements in the near future.future.
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
1910 1920 1930 1940 1950 1960 1970 1980 1990
Construction Decade
Gross Square Footage
A substantial portion of the University’s Plant, those projects built in the 50’s A substantial portion of the University’s Plant, those projects built in the 50’s through 80’s, is approaching 30-60 years old and will require substantial repair through 80’s, is approaching 30-60 years old and will require substantial repair
and renovation.and renovation.
3838
What are our Continuing What are our Continuing Challenges?Challenges?
Competitive Compensation Program Competitive Compensation Program Funding - $15M recurringFunding - $15M recurring
3939
Thank YouThank You