OKLAHOMA STATE SYSTEM

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OKLAHOMA STATE SYSTEM OF HIGHER EDUCATION
Improving our future by degrees
November 22, 2005
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Budget Request Overview

• 2005 Progress Update
• OSRHE role in college preparation and admission
• Graduate Oklahoma! Initiatives
• Oklahoma Research Initiative
• Economic realities
• Oklahoma Funding Gap
• Budget Request

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1. 2005 Progress Update

• Capital Bonds
• 475 million higher education bonds
• 140 projects and 36 communities
• 350 million sold
• Favorable rates
• Maturities up to 25 years
• First cash available to campuses Dec. 10

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Oklahomans Earning a College Degree

• The number of degrees awarded has increased by
  over 1,000 per year for the past several years.

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FY06 Allocation of State Appropriations
Higher Education received a significant
appropriations increase in FY06, 87.3 million.
But debt service and scholarships claimed 35 of
that amount.
Debt Service 15.0 17.2 Scholarships
TSEIP 15.8 18.1 Institutions, Programs and
Other 56.5 64.7 Total 87.3 100.0
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FY06 Allocation of State Appropriations (Percent
of Total)
Miscellaneous, 0.3
Scholarships, 6.7
Institutions -
System Shared
Endowed Chairs, 0.8
Quartz Mountain, 0.2
Resources, 0.5
Institutions - Debt,
OneNet, 0.2
Capital, Master
Lease, 2.5
Office of
Accountability, 0.1
Institutions - Grants,
0.7
State Regents' Office,
0.8
Institutions -
Operations, 87.2
Total to Institutions 91.2
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FY06 Revenue InstitutionsPrimary Academic
Budget

• Appropriations make up half of the primary
  operating budget of 1.5 billion.
• Tuition and fees make up 37.1.

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Sources Uses of Funds
(in millions) INCREASED BUDGETED
EXPENDITURES Change of Total Mandatory
Costs 33.9 26.7 New Positions (160
faculty 89 staff) 16.7 13.1 Salary
Increases (4.5 average)
31.3 24.6 Adjunct, Part-time, Overload
2.6 2.0 Scholarships/Waivers
10.6 8.3 Travel 2.1
1.7 Library Books and Equipment 3.2
2.5 Equipment 7.9
6.2 Indigent Care and Telemedicine
4.2 3.3 Supplies and Other Operating Expense
14.5 11.4 Total Increase 127.0
100.0
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Tuition
Tuition increases have ensured availability of
academic programs and services.

• Between FY03 and FY 06

• Overall average undergraduate resident increase
  808 or 40.
• Percent range is 28.9 (Rose State College) to
  54.7 (Univ. of Science Arts of Oklahoma)
• Dollar range is 440 (Rose State College) to
  1,479 (University of Oklahoma)

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FY05 and FY06 Average Resident Undergraduate Tuiti
on and Mandatory Fees by Tier (30 credit hours)
Overall average 2,633 in FY05 and 2,828 in
FY06
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• OSRHE Role in College preparation
• and Admission

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Achieving Classroom Excellence
Achieving Classroom Excellence (ACE), SB 982, is
the Governor's initiative that includes 

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• raising high school graduation course
  requirements,  
• making this the standard curriculum unless
  parents opt their students out, and  
• providing a tuition waiver to seniors who
  concurrently enroll.

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Achieving Classroom Excellence
This legislation also established the ACE Task
Force to develop recommendations for  

• testing in core high school subjects,  
• requiring the passage of subject tests for
  graduation, and  
• providing intervention and remediation strategies
  to better prepare high school students for
  college and the workforce. 

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Achieving Classroom Excellence
Higher education proposes to support the ACE
initiative by  

• raising college admission requirements to include
  extra lab science course
• providing tuition waivers for high school
  seniors 
• using the Algebra II and English III test results
  for course placement if the tests are developed
  appropriately and students continue to take more
  math and English  
• providing interventions through continued support
  of the Educational Planning and Assessment System
  (EPAS)  
• using the high school test data to inform teacher
  preparation and remediation activities

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Concurrent Enrollment

• Pilot program for fall and spring semesters
  underway
• Enrollment up 25 overall in fall semester to
  3,379
• 75.3 at community colleges
• Systemwide committee to review and make policy
  recommendations

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OHLAP Scholarship Recipient Projections
Assumes 10 annual increases in OHLAP enrollment
and 70 requirement-completion rate.
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OHLAP Cost Projections(In millions, by fiscal
year, varying tuition rates)
Assumes 10 annual increase in high school OHLAP
enrollment 70 requirement completion rate.
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OHLAP Current Funding Sources FY2006
27.1 million
4.0 m
10.2 m
5.7 m
7.2 m
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Academic Scholars Program

• FY2007 increase funding by 700,000
• Equalize annual funding to annual expenditures
  (trust fund principal is currently being
  depleted).
• By FY2008, annual funding of 9.3 million should
  be sufficient to cover annual projected expenses.

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Ok. Tuition Aid Grant Ok. Tuition Equalization
Grant

• OTAG 4.8 million to increase the maximum award
  for students at public colleges to the same level
  as students at private colleges (1,300).
• OTEG 600,000 will allow awards for 50 of
  eligible students equivalent to the proportion
  of eligible students currently served in the
  OTAG program.

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3. Graduate Oklahoma! Initiatives

• Cooperative Alliances
• Student Portal
• Adult Degree Completion Program
• Programs of Excellence
• Nursing/Allied Health
• Oklahomas progress

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Technology Center
College
Cooperative Alliances

• Goals
• More high school students to college
• More adults to begin and/or continue
• Expand access to postsecondary education
• Efficiently use federal, state local
  resources

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Technology Center
College

• Steps
• Select of pilot sites-Spring 2004
• Develop template-Fall 2004
• Approve pilot cooperative alliance
  agreements-Spring 2005
• Enroll students at pilot sites-Fall 2005
• Phase-in other sites-Summer 2005
• Approve cooperative alliance agreements-Fall
  2005/Spring 2006
• Enroll students across state-Fall 2006

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CollegesUniversities
Comprehensive planning tools
Interests, preparation and needs
Student applications inquiries
Notification and inquiries
Student preparation
Marketing to more students
GEAR UP and customized student information
Inquiries and registrations
OHLAP applications, inquiries and data
ACT, EPAS, WorkKeys
Labor market
Workforce infomation
Applications and inquiries
Career and program info
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Adult Degree Completion Program

• Oklahomas bachelors degree-completion program
• at least two years of college, completed general
  education
• flexible and accelerated schedule for working
  adults
• curriculum preparation for todays and tomorrows
  workplace
• technology to enhance learning
• shared intellectual resources among universities
  (18 hours)
• market as partnership for Oklahomans
• degree programs approved through campus standard
  academic processes
• State Regents approval of institutional adult
  degree completion programs

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FY06 Programs of Excellence Grants

• Thirteen (13) proposals were received, requesting
  a total of nearly 4.4 million in first-year
  funding.
• Five proposals approved -- 1.5 million in
  first-year funding
• CU (Information Technology)
• USAO (Liberal Arts)
• OPSU (Computer Information Services)
• WOSC (Registered Nursing)
• RCC (Agriculture Education Applied Research
  Center)

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FY06 Programs of Excellence Grants
Cameron University Information Technology Baccalau
reate Degree Program

• Will combine academically rigorous curriculum
  with hands-on component to meet employer needs,
  thus bridging the gap between graduate school
  preparation and business/operational emphasis of
  current programs.
• Will attract and develop exceptional students and
  faculty.
• Strong partnerships through internships,
  advisement committees, recruiting, and faculty
  professional service to area businesses and
  industry.

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FY06 Programs of Excellence Grants
University of Science and Arts of
Oklahoma Liberal Arts and ScienceMission
Enhancement

• Grant will provide support in four areas
  identified in USAOs Mission Enhancement Plan
• Academic development, including undergraduate
  research and instructional technology
• Cultivation of a campus environment that more
  fully supports USAOs mission and provides a
  compelling and engaging learning and living
  environment
• Enrollment management
• Institutional development and marketing
• Significant investment in making faculty salaries
  competitive and hiring additional faculty in
  English, math, foreign languages, and art.

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FY06 Programs of Excellence Grants
Oklahoma Panhandle State University Computer
Information ServicesProgram Expansion

• Builds upon proven Computer Science program
  success
• Adds program area content in Computer Graphics
  and Web Site Data Management Technology
• Grant will provide resources for
• Additional faculty member
• A new classroom with Macintosh computers for
  graphics
• Two new capstone courses
• Another Microsoft SQL Server
• Increased digital video capabilities

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FY06 Programs of Excellence Grants
Western Oklahoma State College Registered Nursing
Program

• Increase the number of associate degree
  Registered Nurses
• Strong partnership with eight hospitals,
  additional healthcare facilities, two 4-year
  higher education institutions, technology
  centers, public schools, and two area workforce
  investment boards
• Grant will provide resources for
• Increased number of clinical sites
• Expanded faculty and clinical supervisors
• Distance education classrooms and equipment
• Enhanced curriculum and development
• Recruitment materials

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FY06 Programs of Excellence Grants
Redlands Community College Agriculture Education
and Applied Research Center

• Focus on Value-Added Agriculture and EDGE
• Builds upon outstanding research partnerships,
  service to the agricultural community, and
  international acclaim. Examples include
• International Dairy Goat Research Demonstration
  site for North America through DeLaval, Inc.
• Member of Viticulture and Enology Science and
  Technology Alliance (VESTA)
• OCAST, USDE, and other agency-supported research
  projects
• Faculty incorporate applied research in their
  undergraduate coursework.
• Curriculum articulated with all upper-division
  universities in OK

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Nursing and Allied Health Shortage

• A 2003 Survey indicated that the top four health
  care worker shortages in Oklahoma hospitals are
• nurses
• medical laboratory technologist and technicians
• radiology specialties and
• respiratory care professionals.
• A more extensive follow-up study of the factors
  influencing the healthcare workforce shortage is
  currently being conducted in conjunction with the
  Governors Workforce Task Force.

The survey was conducted and administered
cooperatively by the Oklahoma Hospital
Association, the Oklahoma State Regents for
Higher Education, and the Oklahoma Department of
Career and Technology Education in December 2003.
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Preliminary Findings

• Students
• Large number of qualified applicants for Nursing
  and Allied Health educational programs, but
  limited slots available.
• 86 of health profession graduates stay and work
  in Oklahoma.
• Faculty
• Shortage in Nursing faculty
• Many nursing faculty plan to retire in the next 5
  years
• Nursing faculty often leave for higher paying
  jobs in Hospitals.
• Similar pattern exists in allied health fields.
• Resource Issues
• Budget cuts in the early part of the decade
  exacerbated the shortage
• Adequate clinical space not available in all
  parts of the state
• Additional funds for hiring nursing and allied
  health faculty needed.
• Current funding structure makes it difficult to
  quickly expand high-cost programs.
• Faculty salaries need to be raised to 60th
  percentile of local MSN market to maintain
  faculty

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Possible outcome

• To meet the demand for Oklahoma healthcare
  professionals, Oklahoma colleges and universities
  will need to supply additional graduates.
• Admit additional qualified applicants into high
  demand programs.
• Hire additional faculty in Nursing and Allied
  Health programs based upon geographic workforce
  needs and institutional capabilities
• Increase faculty salaries toward the goal of
  paying at the 60th percentile.
• Train additional faculty at OUHSC
• Current OSRHE Initiative
• In this fiscal year, OSRHE allocated to Western
  Oklahoma State College an additional 450,000 for
  the purpose of doubling the number of Associate
  Degree Nursing degrees awarded annually from 44
  to 88.

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Degrees Earned in Oklahoma Colleges and
Universities, 1999-2004
The number of degrees awarded has increased by
over 1,000 per year for the past several years.
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4. Oklahoma Research Initiative

• 1 billion research endowment should be ultimate
  goal
• Need to invest immediately for a competitive
  economy
• Dynamic Economy and Budget Stabilization Fund
• Governor to appoint superboard to make
  decisions
• 3 industry clusters Aerospace/Aviation,
  Biosciences, Weather

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5. Economic Realities
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economic
Per Capita Income v. Share of Adult Population
with a Bachelors Degree or Higher (2003)
34,000 -
32,000 -
30,000 -
28,000 -
26,000 -
Per Capita Income
24,000 -
22,000 -
20,000 -
18,000 -
16,000 -
? 15
? 25
? 20
? 30
? 40
? 35
? 45
Population with a Bachelors Degree or Higher
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Source U.S. Census Bureau, ACS 2003
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economies
economic
US Per Capita Income Since 1947
Per capita income
35,000
30,000
25,000
20,000
15,000
10,000
5,000
5
10
15
20
25
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Percentage of population age 25 and over that are
college graduates
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Source Trend Data - Federal Reserve Bank of
Dallas Oklahoma Data Census Bureau
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Average family income by educational attainment,
2003
economies
economic
175
150
125
100
Income (000)
75
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Source Postsecondary Education Opportunity, 2005
25
0
LT-9
9-12
HSG
Some
Prof
MA
PhD
BA
AA
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College
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Most high school seniors (and their parents)
expect to go to collegeonly about half do!
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6. Oklahomas Funding Gap

• SHEEO data is nationally comparable
• Adjusted for cost of living and program
  enrollment mix

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State Cost of Living and Public Higher Education
System Enrollment Mix Index Values
Dollars per FTE are adjusted upward the most in
states with an inexpensive enrollment mix and low
cost of living. The reverse is true for states
with a more expensive enrollment mix and high
cost of living. In some states, the two factors
cancel each other.
OK
OK
Source SHEEO SHEF
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Percent Change by State in Enrollment and in
Educational Appropriations per FTE, Fiscal
1991-2004
90
NV
NV
80
APPROPS CHANGE below avg
APPROPS CHANGE above avg
FTE CHANGE above avg
FTE CHANGE above avg
70
UT
Note
The 13 circled states also
exceeded the national average
Educational Appropriations per
60
FTE by 10 or more in FY 2004.
MS
AR
50
LA
ID
Percent Change in Public Higher Education
Enrollment
WA
ID
NC
SD
40
NC
AZ
FL
TX
SC
30
ND
IN
OK
MT
CA
CA
OK
NM
KY
KY
NJ
CO
NJ
US
OR
OK
20
VA
GA
GA
HI
HI
WI
TN
ME
IA
VT
NH
WV
OH
DE
PA
MA
NY
NY
APPROPS CHANGE below avg
APPROPS CHANGE above avg
CT
CT
AK
10
NE
FTE CHANGE below avg
FTE CHANGE below avg
AL
MI
MN
KS
WY
WY
IL
IL
RI
0
MD
MO
MO
-10
-45
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
Percent Change in Educational Appropriations per
FTE
Source SHEEO SHEF
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Total Educational Revenues per FTE by State
Percent Change and Current Standing Relative to
U.S. Average
OK
Source SHEEO SHEF
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What is the Oklahoma funding gap?

• The most recent State Higher Education Funding
  Report (2004) indicates a per student funding
  deficit in Oklahoma of
• 1,212
• Compared to the national average.

The most recent State Higher Education Funding
Report (2004) indicates a per student funding
deficit in Oklahoma of 1,212 Compared to the
national average.
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Funding needed for parity

• US Average 8,924
• Oklahoma Average 7,712
• Gap 1,212
• FTE Enrollment 133,393
• Per student gap 1,212
• Funding needed 161,672,316

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7. Budget Request - 123.1m

• I. Elimination of Per Student Funding Deficit
  (first of two requests) 80.0m
• 160 million in increased state appropriations
  would bring Oklahoma close to national parity
  funding support for Oklahoma students.
• A. College and University Mandatory Costs
  36.4m
• Costs over which colleges and universities have
  little or no control such as utilities, employee
  health insurance, risk management premiums,
  annualization of partial-year salaries, etc.
• B. Institutional Priorities 29.0m
• Improvements necessary for colleges and
  universities to increase quality of education for
  students and the higher education system, such as
  additional full-time faculty, additional
  researchers, adjunct faculty, professional staff
  in academic support/student services, library
  services, graduate assistants, student employees.
  Includes funding for faculty and staff salary
  increases, increases in instructional materials
  and instructional technology.
• C. Targeted Needs 14.6 million
• Base adjustments for institutions with unfunded
  enrollment growth
• Nursing/Allied Health Program expansions to
  address workforce needs
• Teacher Residency Program increase to fund
  additional workload
• Operating costs for new campus facilities

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Budget Request - Continued

• II. Graduate Oklahoma! Programs 2.8m
• Brain Gain/Programs of Excellence Expansion
  2.0m
• Second round of five-year funding for priority
  academic programs at colleges and universities.
• Adult Degree Completion Initiative Start up
  .5m
• To enable Oklahomans who have at least two years
  of college credit to return to complete a
  bachelors degree. This funding will assist the
  lead institution in coordinating the program.
• Summer Academies Partial Restoration of FY04
  Budget Reductions .3m
• Summer academies supplement middle and high
  school curriculum with relevant experiences in
  math and science for students in grades 8 through
  12.

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III. Scholarships - 18.6m

• A. Oklahomas Promise (OHLAP) 10.0m
• Estimated 2,900 more students. 3 million less
  if no tuition increase.
• B. Concurrent Enrollment Tuition Waiver 2.5m
• Pilot program underway for the fall 2005 and
  spring 2006 semesters. The actual costs will be
  determined after analysis of the pilot program.
  The requested amount will be used to reimburse
  institutions for their costs.

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Scholarships, contd

• .
• C. Oklahoma Tuition Aid Grant (OTAG) 4.8m
  
• Provides equity in the award amount between
  public students (1,000) and private students
  (1,300).
• D. Oklahoma Tuition Equalization Grant (OTEG)
  .6 m
• Funding sufficient to make awards to 50 of
  eligible students similar to OTAG.
• E. Academic Scholars .7 m
• Second installment of funding needed to align
  revenues and expenditures.

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IV. Other System Needs - 21.7m

• Annualize 475 Million Capital Bond Debt Service
  15.1m
• Initial interest-only debt service payment in
  FY06. Full debt service payments begins in FY07.
  The debt service is estimated to be between 30
  and 32 million annually.
• Section 13 Offset (Institutions capital
  funding) 1.0m
• Restoring reductions from FY04 for parity between
  those institutions that do and those that do not
  receive Section 13 Funds and New College Funds.
• OneNet Equipment 1.5m
• Equipment and software to improve security and
  performance of the OneNet system, as well as
  bringing facilities up to health and safety
  codes. Specific items include anti-spam
  software, modules for additional bandwidth, air
  cooling equipment, Lightwave cards, server
  cabinets, and upgraded hardware.
• Endowed Chairs 3.5m
• Restore 11million base additional 73 million
  currently in the queue.
• Office of State Finance Charges .6m
• Original estimate 1.4 million for FY06. Revised
  estimate 1.7 million.

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Possible Proposed Legislation

• Art in Public Places
• Dedicated revenue for the OHLAP program
• OTAG --  allow maximum awards based on the
  average tuition by type (tier) of institution
  rather than for each individual institution
• Other minor clean-ups

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OKLAHOMA STATE SYSTEM OF HIGHER EDUCATION
Improving our future by degrees