South Dakota Board of Regents

Fiscal Year 2017 Budget HearingJoint Appropriations CommitteeFebruary 2-3, 2016

Senator Deb PetersChair

Representative Justin CroninChair

Senator Larry TidemannVice Chair

Representative Dan DrydenVice Chair

Stewardship of Public Higher Education in South Dakota

John W. Bastian

Harvey C. Jewett

Kathryn Johnson Jim Morgan Joseph SchartzKevin Schieffer

Bob SuttonVice President

Terry BalounSecretary

Randy SchaeferPresident

2

Board of Regents’ Strategic Plan: Our vision and mission• Randy Schaefer, President

3

The 2020 Mission Statement• The South Dakota Board of Regents’ mission is to provide an

excellent, efficient, accessible, equitable, and affordable public university and special schools system

that improves South Dakota’s overall educational attainment and research productivity,

while enriching the intellectual, economic, civic, social, and cultural life of the state, its residents, and its communities.

4

65 Percent by 2025!• Goal is based on projections that roughly 65% of all jobs in our

state will require some level of postsecondary education by 2020. Data from Georgetown University Public Policy Institute’s Center on

Education and the Workforce.

5

65 Percent by 2025!• Regents seek statewide goal: 65% of South

Dakotans, age 25-34, holding some type of postsecondary credential by 2025.

• If agreed to, all postsecondary partners work together to deliver on 65% goal: public, private, technical and tribal.

• Adopted by the Workforce Development Council.

• Thank you, Gov. Daugaard, for your support! (State of the State message, Jan. 12, 2016)

6

Projected Revenues from Meeting 65% Goal

$107,600,000

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

State Revenues7

Source: NCHEMS; CLASP

(NCHEMS/CLASP)

Our Goals: Public Higher Education is Vital to South Dakota’s Prosperity

•Student SuccessGrow degree production to 7,450 per

year by 2020.

8

Our Goals: Public Higher Education is Vital to South Dakota’s Prosperity

•Academic Quality and PerformanceDocument that academic programs are

of the highest quality.

9

Our Goals: Public Higher Education is Vital to South Dakota’s Prosperity

•Research and Economic Development Increase annual research and contract

expenditures to $150 million by 2020.

10

• Advance knowledge• Enhance technology

transfer and commercialization

• Catalyze economic development

Our Goals: Public Higher Education is Vital to South Dakota’s Prosperity•Affordability and AccountabilityReduce South Dakota’s tuition and fee

ranking to regional average by 2020.Create and capitalize on efficiencies in

the Regental System.

11

Competition in the Region

12

Source: BOR Fact Books

$3,742

$5,382$5,663 $5,845 $5,849

$6,215

$7,544

$4,960

$6,107

$6,948

$8,475

$6,851

$7,886

$9,842

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

WY MT ND SD NE IA MN

FY16 as compared to FY08 Undergraduate ResidentTuition and Requires Fees

FY08 FY16

55%52% 52% 51% 52%

49%

45%

45%

41%

38%39%

42%

44%45% 48% 48% 49% 48%

51%

55%55%

59%62% 61%

58% 56%

30%

35%

40%

45%

50%

55%

60%

65%

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Student Support

State Support

State Support Impacts Affordability• The 2014 tuition freeze, supported by the Governor and the

Legislature, improved affordability for SD students.

13

Source: BOR Fact Book FY 2016

State support of South Dakota public higher educationincreased from 38% to 44% over the past three years.

The state of public higher education in SD• Mike Rush, Executive Director & CEO

14

As an economic engine

15

• Attracts income• Generates income• Attracts business• Enhances individual wealth

16

Higher Education

Attracts Income• $299 million in federal money in FY14

• Compares to $194 million from General Fund

17

Source: SDBOR FY2016 Fact Book

Generates Income• SD’s public universities generate $1.97 billion per

year in long-run annual economic impact

• BHSU - $191 million• DSU - $110 million• NSU - $157 million• SDSMT - $148 million• SDSU - $766 million• USD - $522 million

18

Source: University of South Dakota, Government Research Bureau (2010)

Attracts Business

• Workforce• Family benefits• Social and

economic climate

19• Business expertise• Research partnerships

Milken Institute Study on Economic Development

20A Matter of Degrees:The Effect of Educational Attainment on

Regional Economic Prosperity

Milken Institute StudyA Matter of Degrees: The effect of educational attainment on

regional economic prosperity • Key Findings:

• Education increases regional prosperity• Better educated, bigger benefits.

21

Enhances Individual Income

• Some College – 13% higher• Associate degree – 26% higher• Bachelors degree – 72% higher

22

Return on Investment by Degree Level (2013)

$47,104 $94,208 $134,868 $195,858$310,188

$1,107,922$1,344,267

$3,312,883

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

Associate's Bachelor's Master's Doctoral

Cost of Degree Lifetime Earnings Bonus

23

Source: US Census Bureau, American Community Survey (PUMS), 2013

ROI7 to 1

ROI12 to 1

ROI10 to 1

ROI17 to 1

New US High-Paying Jobs by Degree Level

2,800

152

-39-500

500

1,500

2,500

3,500

Bachelor's Degree orHigher

Some College orAssociate's Degree

High School or Less 24

Source: Georgetown University Center on Education and the Workforce (2015). Good Jobs are Back: College Graduates are First in Line

2010-2014(in Thousands)

Impact of Education on Income

10%

15%

20%

25%

30%

35%

40%

45%

$15,000 $20,000 $25,000 $30,000 $35,000 $40,000

SD

25

Source: US Census Bureau, American Community Survey, 2013

States by Income and Education, 2013

Per Capita Income, 2013

Perc

ent w

ith B

ache

lor’s

Deg

ree

or H

ighe

r

Strengthening South DakotaEconomic, Social, and Human Capital

26

Source: The College Board (2013). Education Pays; Institute for Higher Education Policy (1998). Reaping the Benefits: Defining the Public and Private Good of Going to College

Accountability to our Students and Citizens

27

Measuring Our ProgressEnsuring Accountability & Transparency

• SDBOR Fact Book• www.sdbor.edu/mediapubs/factbook/index.htm

• SDBOR Interactive Dashboards• www.sdbor.edu/dashboards

• SDBOR Strategic Plan – 17 System Metrics• www.sdbor.edu/theboard/StrategicPlan

• Council of Higher Education Accountability Report

• Presidential Evaluations

28 28

Improving Student Preparation & Retention• Department of Education Collaborations

• Placement Aligned with State Assessments• High School Remediation Coursework

• Improving Remedial Performance• Bridge Programing - South Dakota Jumpstart• Co-requisite Remedial Courses

• First Year Targeted Interventions• Early-alert System (Starfish)• Intrusive & Professional Advising

29 29

Fostering On-Time Degree Completion

• Creating a Finish in 4 Year Mindset• Exploratory Studies • 15-to-Finish Models

• Targeted Policy • Credit-Hour Requirements – 128 to 120 • Student Success Collaborative (SDSU)

• Transfer & Non-Traditional Students• Articulation Agreement Expansion• General Studies Degree Expansion

30

Improving System Completion

5,599

5,858

6,355

6,172

6,346

5,200

5,400

5,600

5,800

6,000

6,200

6,400

6,600

FY11 FY12 FY13 FY14 FY15

13% Increase in Total Graduates Since FY11Total Graduates

31

Helping At-Risk Students Succeed

32

Year Low-Income Students

American Indian Students

Nontraditional Students

Underprepared Students

FY11 2,343 108 990 1,320

FY12 2,527 144 1,092 1,278

FY13 2,742 142 1,244 1,461

FY14 2,657 124 1,152 1,362

FY15 2,641 145 1,287 1,342

Change +13% +34% +30% +2%

Source: Regents Information Systems

Filling the Workforce Pipeline• Preparing South Dakotans for tomorrow’s workforce

33

Source: Regents’ Information Systems

1,699

1,124 1,036

552 535 535 486 307 284

2014-2015 Degreesfrom SD Public Universities

2020 Vision: The South Dakota Science and Innovation Strategy

1,376 1,424 1,559 1,630 1,693 1,734

-

500

1,000

1,500

2,000

FY10 FY11 FY12 FY13 FY14 FY15

STEM Graduates

• Graduate programs to foster new innovations

34

Source: Regents’ Information Systems

Responsive Academic Programming(Since 2011)

• Rigorous approval process for new programs• Rigorous annual and 7 year review of existing programs

35

2011-2015 ADDED TERMINATEDUndergraduate Majors 12 26Undergraduate Minors 50 18Undergraduate Certificates 27 8Undergraduate Specializations 7 24

Graduate Degree Programs 22 5Graduate Certificates 12 1Graduate Specializations 8 2

Academic Programming for Economic Development

Programs related to Key IndustriesBioscienceBS, Applied Biological Sciences SDSM&TPhD, Biochemistry SDSU

Oil and GasMinor, Petroleum Systems SDSM&TMinor, Sustainable Energy Systems SDSU

Financial ServicesMinor, International Business NSUMA, Banking & Financial Services NSU

Shooting, Hunting, and Outdoors Minor, Conservation & Biodiversity USDMinor, Events & Facilities Admin SDSU

Professional Business ServicesMinor, Social Media Marketing USDMS, Analytics DSU

Value-Added Agriculture Minor, Precision Agriculture SDSUMS, Ag & Biosystems Engineering SDSU

36

Producing Graduates with Information-Age Skills and Knowledge Literacy and communication Critical thinking Collaborative problem solving

and decision making Numerical and scientific

reasoning Computer fluency and use of

technology Subject-matter proficiency Understanding social,

organizational, and technological systems

Individual and social responsibility

Self-management Integrity, teamwork Creativity, enthusiasm,

initiative Understanding ethics, values,

and how society, government, and business work

Coping with change; how to make things change

Being assertive to get concerns addressed

Taking charge of your own learning

37

Fact Check: What kind of graduates does a major South Dakota employer hire?• College majors of recently-hired graduates working for

Wells Fargo

Finance Accounting Business Administration,

Business Management, Business Marketing, Business Economics

Computer Science Education-Teaching,

Special Education Speech Communications Economics

Sociology Agricultural Science,

Agricultural Business/Economics

Communications-Public Relations

Banking and Finance Service Management Music Spanish Biology 38

Research is Economic Development

$105,072,927

$83,411,604

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

SDBOR Research ActivityFY00-FY15Awards Expenditures

39

Source: SDBOR Office of Academic and Research Affairs

Research is Job Development

• FY15 Job creation - Faculty research efforts (FTE): 610• Research innovations – FY07-FY15

• Invention disclosures – 456• Patent & intellectual property protections filed – 202• Patents/licenses issued – 116

40

Source: BOR system office

FY17 Budget Request

41

State HEFF Match - Year Four of Four

• Governor’s Recommendation: $3,274,464

• Safe, efficient and appropriate • 2% replacement value

FiscalYear

Replacement Value(in millions)

M&R Allocated(in millions)

% of Replacement Values

FY11 $ 945,224,939 $ 8,778,712 0.9%

FY12 $ 964,530,324 $13,372,636 0.9%

FY13 $1,093,628,653 $15,917,778 1.5%

FY14 $1,135,770,710 $18,590,650 1.6%

FY15 $1,184,230,289 $20,068,760 1.7%

FY16 $1,260,771,828 $22,563,326 1.8%

FY17 $1,291,889,484 $25,837,790 2.0%

42

LRC Budget Briefing Pages 4 & 6

Resident State-Support Tuition Freeze

• Governor recommends paying off Bonds and adding $324,020 in general funds

• Total redirected to tuition freeze is $3,228,710

• Reduce tuition proportion of cost

• Goal: 50/50 split between student support and state support

$0

$2,500

$5,000

$7,500

$10,000

$12,500

$15,000

$17,500

FY10 FY11 FY12 FY13 FY14 FY15

$5,6

53

$5,1

78

$4,9

53

$5,1

03

$5,4

55

$5,5

34

$7,6

77

$8,3

94

$8,8

24

$9,6

83

$9,5

94

$9,9

95

General Fund and Student Expendituresper FTE Student

General Fund Support Student Expenditures

Average Expenditure per FTE Student$13,330 $13,572 $13,777 $14,786 $15,049 $15,529

43BOR Strategic Goal 4: Affordability & Accountability

LRC Budget Briefing Page 7

44

Lower State Support Drives Higher Tuition

45

Source: SHEEO State Higher Education Finance (SHEF) Report, 2014(Note: SHEF data adjusted for enrollment mix and cost of living, so numbers will differ from BOR Fact Book.)

Iowa Minnesota Montana Nebraska NorthDakota

SouthDakota Wyoming National

AverageAppropriations Fer FTE $5,335 $5,327 $4,939 $7,840 $7,888 $4,878 $15,561 $6,552Net Tuition Revenue Per FTE $8,118 $7,111 $5,505 $5,401 $6,752 $8,221 $2,761 $5,777

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

FY14 Public Postsecondary EducationEducational Appropriations and Net Tuition Revenue

Per FTE

National Guard, Teacher and State Employee Tuition Support

• Governor’s Recommendation:

• General Fund - $390,054

• Transfer $230,098 fromDepartment of Military

46

LRC Budget Briefing, page 7

SD BOR Strategic Goals 1 & 4: Student Success and Affordability & Accountability

National Guard, Teacher and State Employee Tuition Support

• Simplifies tuition and fees• Maximizes federal tuition assistance

for military personnel• Requires legislation to change HEFF

percentage from 20% to 11.5%

47

LRC Budget Briefing, Page 4, 13-14

SD BOR Strategic Goals 1 & 4: Student Success and Affordability & Accountability

South Dakota Opportunity Scholarship

• Governor’s Recommendation: $434,369

• Changes in 2016 to $1,300 for first 3 years and $2,600 for final year

• 1,100 new students each year• 2nd year of students to receive

increased funding

48

BOR Strategic Goal 1: Student Success – Grow undergraduate degrees awarded

LRC Budget Briefing, Page 10

Re-Establishing Value

26.0%

24.3%22.8%

21.4%

19.8%18.4%

17.6%16.5% 16.3%

15.5% 15.5%

20.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

% OF TUITION

49

• $5,000 award equaled 26% of four-year tuition costs in 2004• Decreased in value to 15.5% in 2014-15• $6,500 award is 20% of the tuition and mandatory fees

Source: BOR Fact Book

LRC Budget Briefing, Page 10

REED Network Equipment Replacement

• Governor’s Recommendation:• $250,920 per year for five years

• Existing routers need replaced -$1,254,600

• The Research, Education and Economic Development (REED) Network has provided a robust and reliable network for higher education, SURF, and EROS

• Research collaboration with other states as well as within South Dakota

50

SD BOR Strategic Goal 3 – Research and Economic Development

LRC Budget Briefing Page 8

Center for the Prevention of Child Maltreatment

• Governor’s Recommendation:• $210,725 and 1 FTE

• Jolene’s Law Task Force• Educate and provide

assistance• State and local agencies and

regionally

51

LRC Budget Briefing Pages 4, 12-13

Need Based Scholarship Endowment

• Governor’s Recommendation:• $1.4 million in health insurance savings from tuition funds

transferred to Endowment• One-time General Fund appropriation of $2.1 million• Will grow the Endowment from $1.5 million to $5 million• Will produce from $100,000 (2%) to $200,000 (4%) in awards

each year

52

FY16 GB Amendment –SB 48 & SB 67

SD BOR Strategic Goals 1 & 4: Student Success and Affordability & Accountability

Need Based Scholarship Endowment

• 60% eligibility for PELL Grant funding• Currently, $12.80 per PELL eligible student• Affordability and accessibility continue to be hurdles for many academically

accomplished students

53

SD BOR Strategic Goals 1 & 4: Student Success and Affordability & Accountability

FY16 GB Amendment –SB 48 & SB 67

Need-Based Funding PELL Eligible StudentsNeed Funding per PELL

Eligible Student

South Dakota $200,000 15,629 $12.80

North Dakota $9,193,000 13,156 $698.77

Wyoming $167,000 7,849 $21.28

Colorado $67,332,000 102,266 $658.40

Iowa $48,854,000 152,554 $320.24

Minnesota $119,894,000 107,688 $1,113.35

Montana $5,288,000 16,857 $313.70

Nebraska $14,948,000 34,895 $428.37

Total/Average $265,876,000 450,894 $589.66

Public PerceptionThe Affordability Disconnect

Percent of US adults agreeing that higher education is:

54

100%

60%

40%

20%

0%

80%

Important? Available? Affordable?

96%

61%

21%

The ObstaclesCompletion Rates by Income

Baccalaureate Degree Attainment by Age 24

55

Source: Postsecondary Education Opportunity, 245 (November 2012)

71%

10%

0%

20%

40%

60%

80%

Highest Income Quartile Lowest Income Quartile

The ObstaclesAbility to Pay for Higher Education

Percent of families with school-age children by annual family income:

56

42% 44%

28%

19%

0%

10%

20%

30%

40%

50%

United States South DakotaUnder $50,000 $100,000 or more

Animal Disease Research and Diagnostic Laboratory Design Study

• Governor’s recommendation: $1,575,000 from the Livestock Disease Emergency Fund

• Total planning costs - $2,742,000• $535,000 spent to date from ADR&DL funds• $635,000 available from ADR&DL funds if needed

57

HB 1080

SD BOR Strategic Goal 3: Research and Economic Development

Mission• Protect the SD livestock industry,

• the health of animals, and • the welfare of society

58

35%

59

60