Board of Trustees Public Meeting 0 April 26, 2016
Statement of Principles: Tuition and Fees Introduction P.L. 18A:64-1 et seq., the Higher Education Restructuring Act of 1994, gave significant new responsibilities to Boards of Trustees. Among them are: To set tuition and fees; however, prior to the date of the adoption of a tuition or fee schedule or an overall institutional budget, and with reasonable notice thereof, the governing board shall conduct a public hearing at such times and places as will provide those members of the college community who wish to testify with an opportunity to be heard. The hearing will be held at The College of New Jersey, and will be open to the general public. Mindful of their statutory responsibility, the Trustees offer the following statement to be circulated as part of the notice of the annual hearing and to be read at the beginning of each hearing. February 23, 1995 1
Statement of Principles: Tuition and Fees Principles The cost of delivering a quality, cost effective undergraduate education at The College of New Jersey is the central issue in establishing tuition and fees. That cost is defined annually. The rationale for use of public funds in support of higher education is that higher education exists primarily to serve the public good. The Trustees have the responsibility to provide vigorous advocacy for state support and to rigorously review institutional expenditures so that they may certify the costeffective implementation of the college s mission in service to the citizens of New Jersey. Students are required to share in the cost of higher education because it confers a personal benefit. However, the Trustees recognize that the public good is not served if the cost of attending The College of New Jersey bars access, and pledge that state and federal financial aid, combined with institutional resources, will be managed to ensure access. February 23, 1995 2
Statement of Principles: Tuition and Fees Conclusion Thus, when determining tuition and fees, the Trustees strike a balance between what students pay, and what the state and federal governments pay. That balance must take into account the finite costs of a quality education and that concomitantly, when, after rigorous internal cost control, state support decreases, tuition must increase if quality is to be preserved. 3
CSPP Budget Decision-Making Principles & Process The budget planning and development will be guided by the following Board of Trustees approved resource allocation principles in order of importance: 1. Preserve the health, safety and security of our students, faculty, staff and visitors. 2. Preserve the integrity and excellence of the educational programs and services through which the College realizes its mission. 3. Preserve the institutional integrity of the College, including our obligations to staff, faculty, and students (e.g., scholarships). In implementing these principles, decisions will also be guided by the institutional strategic initiatives, in particular, the need to preserve and enhance the College's long term financial well being. Updated April 9, 2008 4
Governor s FY2017 Higher Education Proposed Budget Governor Christie s proposed budget includes level funding of $2.2 billion for higher education The FY2017 budget provides overall funding in base appropriations for the state s senior public institutions of higher education at the same levels as FY2016. TCNJ s base appropriations = $27.18 million. However, more than $60 million is reflected as savings within the fringe benefit costs of the public higher education sector. According to the Budget In Brief, Plan Design Committee action is essential to achieve these savings. If the savings are not realized, offsetting reductions in support may be necessary. Operating aid to county colleges will also continue at the same levels ($134.123 million) as FY2016. The budget will provide $1 million under the Independent College and University Assistance Act, a reduction of $500,000 from FY2016. 5
Governor s FY2017 Higher Education Proposed Budget Student Aid Programs Typical Tuition Aid Grant (TAG) awards will be increased 2% at all levels of need, with a total increase of $17.8 million. The Educational Opportunity Fund will be cut by $2.565 million (6.2 percent), based on projected levels of demand, according to the Budget In Brief document. NJSTARS I & II would receive level funding, at $6.907 million. High School to College Programs The Governor s Urban Scholarship program will add a fifth class and will now support an estimated 635 scholars in targeted school districts. College Readiness Now is funded at $1 million in fiscal 2017 to help students prepare for college level course work before they graduate high school. 6
FY2017 Budget Challenges The key budget challenges that need to be addressed in FY2017 are as follows: Ensure that budget resources are aligned with the new Strategic Plan priorities. Due to the lack of vacant positions plus the addition of new positions over the past four fiscal years, the entire budgeted salary savings ($1.5M in FY2016) will not be available to help balance the budget in FY2017. Additionally, 11 new faculty and staff positions are reflected in the FY2017 budget plan. An overall enrollment plan that accounts for the projected number of graduating students plus the historical rate of student attrition needs to be developed and incorporated into the budget planning assumptions. Tuition and fee increases will continue to be constrained coupled with increased demand for need-based institutional scholarships. The pattern of reducing net state appropriation to offset state-funded fringe benefit costs may continue, adding to the challenge of balancing the operating budget. According to the Budget In Brief document, if the proposed savings of $60M in fringe benefit costs for public higher education is not realized, offsetting reduction in support may be necessary. Note: FY2016 net appropriation was reduced by $2.1M. 7
TCNJ s Strategic Plan TCNJ s Strategic Planning Strategic planning at TCNJ involves a need to make disciplined, informed decisions about the goals that we will and will not pursue. TCNJ s Strategic Priorities Priority I: Attract and retain talented students, faculty, and staff into a diverse, inclusive, and healthy campus. Priority II: Enhance Signature Experiences Priority III: Promote the college s distinctive identity to enhance institutional and program recognition at the national level. Priority IV: Build, operate, and maintain a safe, sustainable, and accessible physical and technological infrastructure that supports high-caliber learning. Priority V: Achieve a sustainable financial model that allows the college to realize its vision while maintaining quality and affordability for the students it serves. 8
State Appropriations and Tuition & Fees The following graph illustrates state appropriations and tuition & fees as a percentage of the College s education & general operating budget: 9 *Other includes investment income and TCNJ Foundation support.
State Appropriations per FTE Student Column1 FY 2012 FY 2013 FY 2014 FY 2015 Base Appropriation $ 29,317,000 $ 29,317,000 $ 29,317,000 $ 29,317,000 Fringe Appropriation 25,091,000 23,994,000 23,762,000 24,530,000 Total State Appropriations $ 54,408,000 $ 53,311,000 $ 53,079,000 $ 53,847,000 Total FTE Enrollment 6,779 6,799 6,901 6,944 State Appropriations per FTE $ 8,026 $ 7,841 $ 7,691 $ 7,754 10
Budget Planning Process Strategic Resource Allocation Grow Revenues Control Expenses PRIORITIES Access & Excellence TCNJ S FINANCIAL STRATEGY REALITIES Economic & Political 11
FY2017 Budget Planning Assumptions The following assumptions are set forth to guide the College s budget planning and development process. All scenarios start with the FY2016 projected actuals. The Fall 2016 enrollment goals are 1,465 freshmen, 240 transfers and 65 provisional students. 12 Growth Assumptions Note: As of 6/30/2015, the Higher Education Price Index (HEPI) was 2.1%. FY2017 No Tuition Increase FY2017 Scenario A FY2017 Scenario B Operating Budget Operating Revenues 1.50% 1.50% 2.00% Student tuition and fees - tuition increase 0.00% 2.00% 2.50% Student tuition and fees - change in enrollment mix 0.20% 0.20% 0.20% Student housing and fees - meal plan plus room rate increase 3.00% 3.00% 3.50% Federal grants indirect cost recovery 1.50% 1.50% 2.00% Other Sources 1.50% 1.50% 2.00% Operating Expenses 4.40% 3.50% 3.20% Instruction & Research 4.00% 3.75% 3.50% Maintenance cost increase - new construction ($ in 000's) $ - $ - $ - Nonoperating Revenues 1.50% 1.50% 2.00% State of New Jersey appropriations 0.00% 0.00% 0.00% State of New Jersey fringe appropriation 0.00% 0.00% 0.00% Investment Income 7.50% 7.50% 8.50% Capital Contribution ($ in 000's) $ - $ - $ - Nonoperating Expenses 3.00% 3.00% 2.50% Enrollment Projection Undergraduate Core Headcount 6,457 6,457 6,457 Graduate Core Headcount 525 525 525 Total 6,982 6,982 6,982
FY2017 Budget Planning Assumptions 13 Assumptions ($ in thousands) FY2016 Projected Revenue $ 233,717 $ 233,717 $ 233,717 FY2016 Projected Strategic Initiative Expenses - One Time (2,924) (2,924) (2,924) FY2016 Projected Strategic Initiative Expenses - Recurring (1,373) (1,373) (1,373) FY2016 Projected All Other Expenses (229,146) (229,146) (229,146) FY2016 Projected Budget Surplus $ 274 $ 274 $ 274 FY2017 Assumptions: Operating Revenues Net student tuition and fees (Increase of $240 due to change in enrollment mix) 0.00% 240 2.00% 2,348 2.50% 2,875 Net student housing and fees (Meal plan plus room rate increase) 3.00% 1,368 3.00% 1,368 3.50% 1,596 Other sources 1.50% 180 1.50% 180 2.00% 240 Operating Expenses 4 new faculty (salary and fringe) (483) (483) (483) 7 new staff (salary and fringe) - already hired (568) (568) (568) Salary increase - faculty and staff* 2.00% (1,869) 2.00% (1,869) 1.50% (1,402) Fringe benefit increase - - - Savings from vacant positions held - - Reduction in projected salary savings (750) (750) (750) New strategic investments in excess of FY2016 recurring above 20 20 20 Non-salary inflationary cost increase (2,568) (2,568) (2,552) Nonoperating Revenues State of New Jersey appropriations 0.00% - 0.00% - 0.00% - State of New Jersey fringe appropriation 0.00% - 0.00% - 0.00% - Investment income 7.50% 168 7.50% 168 8.50% 190 Nonoperating Expenses Debt service (95) (95) (95) Net Transfers for Capital & Strategic Reserves 17 (379) (664) FY2017 Projected Budget Deficit (4,065) (2,353) (1,317) Deficit as a percent of the total base expenditure plan -1.13% -0.63% * Presuming the union contract negotiations are completed FY2017 No Tuition Increase FY2017 Scenario A FY2017 Scenario B
Strategies to Achieve Budget Equilibrium To achieve budget equilibrium, the College will consider a variety of actions, including, but not limited to: 1. Hold vacant positions (faculty and staff) based on institutional priorities Financial Flexibility 2. Examine department budgets to reallocate resources to fund institutional strategic priorities (Growth by Substitution) 3. Explore savings from fuel and utility due to the lower cost of energy 4. Reduce the budget for departments non-salary operating allocations based on multi-year trend analysis 1. Grow net tuition through enrollment and reduction in scholarships & waivers Revenue Enhancements & Cost Containment 2. Department contingencies examine departments discretionary funds 3. Strategically enhanced Summer School offerings to attract more students 4. Link all new positions (salary + fringe) to marginal revenue increase or expenditure reallocations identified by the requesting departments 14
Tuition, Room & Board Pricing Mandatory Charges (Academic Year) FY 2012 FY 2013 FY 2014 FY 2015 FY 2016* Undergraduate Tuition & Fees (In State) $ 13,867 $ 14,357 $ 14,710 $ 15,004 $ 15,446 Undergraduate Tuition & Fees (Out of State) $ 23,676 $ 24,509 $ 25,115 $ 25,617 $ 26,378 Room & Board $ 11,230 $ 11,748 $ 11,932 $ 12,227 $ 12,570 Annual Tuition Increase 4.5% 3.5% 2.5% 2.0% 3.0% Annual Fees, Room & Board Increase 3.4% 3.2% 2.9% 2.3% 2.8% Overall Annual Increase 3.9% 3.8% 2.3% 2.1% 2.9% For every 1% increase in Student Charges Amount per student Undergraduate Tuition & Fees (In State) $ 154 Undergraduate Tuition & Fees (Out of State) $ 264 Room & Board $ 126 * In FY2016, the net state appropriation was reduced by $2.1 million, or 7.3%, to offset state-funded fringe benefits. 15
Communication On Campus Communication Committee on Strategic Planning and Priorities Faculty Senate Staff Senate Student Government Union Leadership Deans Council Presidential and Staff Meetings with Legislature Individual Meetings Assembly and Senate Hearings Participation with New Jersey Presidents Council Advocacy Networks TCNJ Specific Advocacy through Website (SGA, Parent Listserv, Alumni Networks and Other Constituency Groups) 16
17 Questions?