Fiscal Year 2007 Budget Report
Oakland University Senate
October 19, 2006
Economic Review
• Michigan’s unemployment rate was 6.7 in CY 2005 and
is forecast to be 6.8% in CY 2006 and 7.5% in CY 2007.
(House Fiscal Agency, Economic Outlook and Revenue Estimates for Michigan, May 2006.)
• Michigan has endured five years of a dual-deficit budget
situation that has plunged state finances into the worst
fiscal crisis in more than 50 years. The central
conclusion after close examination of spending and
revenue trends is that the economy will not grow
Michigan out of its deficit crisis.
• Since FY 2000 General Fund revenues dropped
$1.5 billion (15.6 percent).
(Citizens Research Council of Michigan, State Budget Notes, Michigan’s Budget Crisis and the Prospects for
the Future, May 2006
Shares of General Fund-General Purpose
Spending Fiscal Years 2001 and 2006
Change in
Percentage Point
FY2001 FY2006 Share
Community Health 27.3% 32.9% 5.6
Corrections 16.3 19.8 3.5
Higher Education 21.3 20.7 (0.6)
Human Services 12.7 12.0 (0.7)
Other 22.4 14.5 (7.9)
“Other” includes items such as court funding, state police, natural resources, environmental quality, and
capital outlay.
Numbers may not add to 100.0% due to rounding.
(Citizens Research Council of Michigan, State Budget Notes, Michigan’s Budget Crisis and the Prospects for
the Future, May 2006
Making the Case in Lansing
• Michigan’s lagging economy continues to have an adverse
impact on state resources. This reality, coupled with term
limits and greater needs and demands, has created a much
more competitive environment as various entities and interest
groups, including the 15 public universities, vie for limited
general fund revenues.
• Tuition and fees at state universities have significantly
increased in recent years to offset the decline or less than
inflation increases in state appropriations.
Making the Case in Lansing
• Although Oakland University has faired relatively well in the
appropriations process, this is an area of great concern given
the increased pressure on state officials to minimize the
percentage increase differentials.
• Michigan’s economic woes have elevated the value of higher
education amongst elected officials and their constituents, a
major milestone considering that the state trails the nation in
the percentage of college graduates.
• Efforts are being made to raise the state building authority
bond cap to allow more funding for building projects on the
campuses of state universities, community colleges and
agencies.
Appropriation per FYES
1997 1999 2001 2003 2005 2007
Projected
Oakland University’s FY 2007 appropriation per FYES is projected to be $504
per FYES less than the FY 1997 level.
Comparison of General Fund
Revenue Sources
FY 1992, FY 2002 and FY 2007 Budget
Projected
Since 1992, Oakland University’s relative reliance on tuition and fees in the
General Fund has grown from 41% to a projected 67% in 2007.
Comparison of State Appropriation Average
Percentage Increase Versus OU Percentage
Academic Affairs – FY 2007
Incremental Budget Allocations
Does not include FY 2007 compensation adjustments
Oakland University
Fall Full-Time Faculty Headcount
FY 2007 New & Replacement
Faculty Positions
College of Arts and Sciences 29
School of Business Administration 5
School of Education and Human Services 11
School of Engineering and Computer Science 1
School of Health Sciences 2
Kresge Library 1
School of Nursing 14
Total 63
Note: 49 positions were originally approved. Includes visiting faculty.
Academic Affairs – FY 2006
One-Time Budget Allocations
Focus on Support
for Academic Programs
• Research Support and Success
• Budget Incentives to Support Future Enrollment Growth
• Partnerships to Leverage Excellence
• Capital Campaign
Budget Incentive Policies/Programs
• On-Campus Incentive Program
-$238,900 transferred to Academic Affairs
base for on-campus enrollment initiatives
• Off-Campus Incentive and Credit CE Programs
-$1,113,781 incentive for FY06 programs
activity
• Student Course Fee
-Increased allocation by $53,200 for FY07
-Fixed base budget at $1,258,589 after
course fee elimination
Research Support
• Indirect Cost Recovery:
- Standard allocation increased from 25% to 35%
- $581,660 earned in 2006
- Additional research funding allocated per AAUP
contract (FY05 – FY06 total) - $223,853
- Research Assistant Support $162,254 for
approximately 31 new tuition reimbursements
added in FY 2005
Oakland University Grant and Contract Activity
Fiscal Years 2001 - 2006
Capital Campaign Dollars to Units
As of September 2006
• College of Arts and Sciences $7,360,253
• School of Business Administration 4,478,802
• School of Education and Human Services 5,703,836
• School of Engineering and Computer Science 23,928,456
• School of Health Sciences 170,177
• School of Nursing 3,015,755
• Academic Affairs - other 11,223,852
• Athletics 986,541
• Student Affairs 179,031
• Office of the President 696,098
• Auxiliaries 8,550,181
• Other 4,149,699
Total $70,442,681
Financial Stewardship
Budget Reductions and Cost Containment
Cumulative FY 2003 – 2006
Category Base One-Time
Budget Reductions $ 6,412,400 $ 5,626,000
Cost Containment 7,083,949 2,893,051
Total Reductions/Containment $ 13,496,349 $ 8,519,051