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Board of Trustees

Budget Update04/13/2012

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Budget ObjectivesBuilding Value for Michigan

• Build upon status as one of world’s top 100 universities, serving Michigan first

• Sustain land-grant mission - preserve access for talented students, prepare students to be part of a highly talented work force and provide cutting edge research and outreach, – the key drivers for 21st century prosperity

• Fulfill obligations of a responsible long-term steward of MSU’s people, programs and facilities

• Assure MSU remains a best value for students and other stakeholders

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MSU ContextMetrics

Academics, Research & Outreach• 77% graduation rate – up 3% in 5 years, the largest increase in

the Big Ten

• Exceeds predicted (U.S. News) graduation rate by 15%

• 91% retention rate – Carnegie peer median 87%

• 90% of seniors rated their educational experience as good or excellent

• Student faculty ratio – 16:1, approximates Big Ten average

• $439M in external support, up 15% in five years

• 1,000,000+ outreach contacts per year

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Financial Aid • Over $600M in financial aid administered, 200% increase

over 10 years, general fund supported aid up 67% over five years

• Student debt levels beneath national averages

MSU ContextMetrics

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2011

5 Year Av-erage

# of Families

Families with incomes > $200,000 omitted for purposes of this analysis. Distribution represented in inflation adjusted 2011 dollars.

MSU Maintains Distribution of Family Income Within Student Population

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Stewardship• Over past five years, reengineered employee health care

programsEliminated funded post-retirement health care for new employeesIncentivized use of generic drugs Capped funded health care growth at 5% per year

• Top 6th percentile over 10 years for endowment performance

• Among the lowest energy cost and consumption patterns in the Big Ten

• Over $110M in reductions and cost containment efforts over 3 years

• 58% of expenses dedicated to core activities (Instruction, research, public service), 2nd in the Big Ten

MSU ContextMetrics

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Appropriation “What if Analysis”

If AppropriationsResident Undergraduate

TuitionAll Other Tuition &

FeesNote

0% 5.0% 5.0% June 2011 Planning

1.0% 4.3% 5.0%

1.4%Governor

4.1% 5.0% Cap at 4.0% Costs $0.4K

1.8%Senate

4.0% 5.0% Cap at 3.5% Costs $1.8M

2.0% 3.6% 5.0%

3.0% 2.9% 5.0%

4.0% 2.2% 5.0%

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Appropriation Analysis-AgBio/MSUE

11-12 Approp 3%AgBio $28.3M $0.9M

MSU E $24.4M $0.7M

• Governor, Senate, and House recommendation each call for appropriations at 2011-12 levels

• House recommendation includes provision that could allocate an additional $1.6M (3.0%) if performance funding remains unallocated

• Impact of state funds are compounded by leveraging of federal match

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Appropriation Analysis-FRIB

• Governor and Senate include FRIB funding of $2.4M in 12-13 in their respective recommendations

• Governor also includes $5.0M in 13-14

• House proposal shifts like amount to Department of Treasury appropriation

• Amounts are dedicated to pay debt service on community cost-share portion of project

• Longer term, work to receive appropriations adequate to fund project expenditures directly instead of debt service model

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MSU Planning Model Summary

Budget Item 2011-122012-13

June 2011*2012-13***April 2012

State Appropriations -15% 0% 0-1.8%

Tuition & Fees 6.9% 5.0% 3.5%-5.0%

Financial Aid 10% 5.5% 5.5%

Graduate Assistants 0% 3.0% 3.0%

Faculty Salaries 2.0%** 2.0%** 2.0%**

Utilities 5.0% 8% 4.0%

Health Care 5.0% 5% 5.0%

Surplus/(Deficit) $0 $0 $0.0-$1.5

*Preliminary budget approved by the BOT in June, 2011**Includes 1.5% general merit, 0.5% college market, plus 1.0% provost market pool*** Appropriations and resident undergraduate tuition based upon Governor’s recommendation, utilities reduced by 2.1M, entering class assumed at 7,650