THE CITY UNIVERSITY OF NEW YORK 1996-97 STATE EXECUTIVE BUDGET RECOMMENDATIONS PRELIMINARY ANALYSIS (Subject to Revision) University Budget Office Office of Student Services Office of Facilities Planning, Construction & Management December 18, 1995 New York State Overview 1. Spending on an All Funds (includes federal as well as State funds) basis will increase by 0.4%, from $63.6 billion in 1995-96 to $63.8 billion in 1996-97. The increase is due primarily to transitional funding that New York would obtain as part of the congressional plan to move to block grant funding for social service programs. The 0.4% increase represents the smallest rate of growth since 1982. 2. Spending from State Funds (tax and other revenues -- and the source of CUNY's budget) will decline by 4.2%, from $43.3 billion in 1995-96 to $41.5 billion in 1996-97. 3. Recommended State General Fund (only tax revenues) spending will decrease by 5.8%, from $33.1 billion in 1995-96 to $31.2 billion in 1996-97. This is the second consecutive year of decline. 4. Tax reductions adopted in 1995 will continue as planned in 1996-97, reducing revenue by $2.2 billion. 5. Planned State workforce reduction of 7,400 positions through a continuation of the hiring freeze, adoption of legislation to redeploy workers across department lines, and use of a $25 million reserve to fund workforce reduction strategies -- including targeted separation incentives, retraining, counseling, and job placement assistance -- developed in conjunction with labor representatives. 6. Appropriations are organized around four budget bills: Education, Labor, and Social Services Public Protection, Health, and Mental Hygiene Transportation, Economic Development, and Environmental Conservation General Government 7. Executive Budget appropriations for the first time reflect the actual cash spending that will occur during the twelve months of the State fiscal year, thereby corresponding to the State's financial plan. All operating budget reappropriations have been eliminated. 8. CUNY (and SUNY) appropriations are converted from a traditional academic (July-June) year basis to a State fiscal year basis (April-March). All appropriations -- operating and capital -- are shown in one place. 9. General Fund share of key activities (1994-95 to 1996-97): * Public Protection -- increased from 6.1% to 6.6%. * Education -- increased from 35.5% to 37.2%. (The increases are, in fact, all in K-12 support; funding for higher education is lower than in 1995-96.) * Welfare -- decreased from 6.5% to 6.0%. CUNY Budget Highlights A. Senior Colleges 1. Appropriation of $883.9 million, a net reduction of $57.6 million, or 6.1%, from the 1995-96 adopted level. The cut is entirely in State aid, which is 11.2% below the 1995-96 adopted budget. 2. Net reduction of $39.7 million after 1995-96 mid-year reduction of $17.9 million for Management Review Program (MRP). 3. Restriction on tuition increases, not to exceed $250 annually, but no revenue requirement mandating any tuition increase. 4. Recognizes the positive actions CUNY has taken through academic program planning, the college preparatory initiative, and the Trustees' long-range planning initiatives. 5. Includes support for 100 new faculty for continuation of Academic Program Planning and Base Level Equity; Language Immersion Center, and first year cost of prospective labor settlements. 6. No individually lined out college or program budgets with the exception of the Calandra Institute, Services for the Disabled, SEEK, and Language Immersion Center. 7. No new SEEK program cuts; the report of the task force is due later in the year. 8. Appropriation based on State fiscal year cash disbursements rather than CUNY fiscal year. B. Community Colleges 1. State aid based on prior year's enrollment and $/FTE. Cannot be augmented during year by enrollment growth nor reduced by enrollment losses. 2. Extends local sponsor maintenance of effort requirement through 1996-97. 3. Categorical programs -- Child Care and College Discovery -- remain at 1995-96 levels. C. Legislative Items - No CUNY member items continued. D. Financial Aid 1. Coordinates Pell and TAP awards by reducing tuition level used for TAP calculations by 50% of actual Pell grant. 2. Requires offset of TAP award by income from home relief. 3. Requires "C" average by the fifth TAP payment. 4. Lags, by a year, potential increases in minimum TAP award due to tuition increases. 5. TAP expenditures will be limited to appropriated levels. 6. TAP schedules will use adjusted gross income (AGI), which is used by federal programs, rather than current net taxable income (NTI) to determine award level, thereby lowering awards. 7. APTS program continued at 1995-96 level. 8. Provides $20 million financial aid block grant through HESC to SUNY and CUNY, which may be divided equally. 9. Creates Scholarships for Academic Achievement, which will be awarded to high school students going on to colleges in New York State -- effective in 1996-97. E. Capital Budget Highlights 1. Provides a total of $262.2 million for projects at both senior and community colleges. 2. Supports major bonded projects that include half of the construction costs for Baruch Site "B", the second phase of the renovation of the B. Altman building for the Graduate School, renovation of Fiterman Hall (BMCC), and Lehman College security and fire alarm system. 3. Funding for various projects to comply with health and safety codes, facility preservation and modernization, asbestos abatement, alterations and improvements based on building condition surveys, facilities accessibility, and energy conservation. 4. Provides flexibility in community college program and permits use of additional non-State funding without full 50% State match. SUNY Highlights 1. Total net cut of $86.8 million from 1995-96 adopted level ($71.8 million after MRP). 2. Educational Opportunity Centers moved to Department of Labor at current appropriation level. 3. Given ability to request a carryover of surplus funds to subsequent fiscal year. 4. Same $250 tuition restriction as CUNY, but permits differential tuition. 5. Same financial aid block grant as CUNY. 6. Restructures total budget, including non-instructional costs, as a single consolidated fund -- the Academic Quality Fund. 7. Community college State aid allocated on an individual campus basis to local sponsors. Other 1. Bundy aid to private colleges remains at 1995-96 level of $39 million, but funds are transferred from SED to HESC. 2. A total of $10 million in Port Authority of New York and New Jersey regional development funds will be made available to support projects in the Upper Manhattan/South Bronx Empowerment Zone.. 1996-97 Executive Budget Recommendations v. Need Senior Colleges ($ millions) 1995-96 State Adopted Budget 941.5 1996-97 Request for Mandatory Items 27.6 Personal Service 14.4 OTPS 13.2 _____ 1996-97 Continuation Budget 969.1 1996-97 Executive Budget -- Increases 11.1 Collective Bargaining 5.7 New Faculty (with fringes) 5.0 Language Immersion 0.4 _____ 1996-97 Continuation Budget with New Items 980.2 1996-97 Executive Budget 883.9 _____ Shortfall ( 96.3)* *Exclusive of cuts outside the CUNY budget, e.g. financial aid, and the resulting impact on enrollment and revenue. Financial Aid Appropriations The proposed appropriation of $532.3 million ($527 million general fund and $5.4 million federal SSIG) for TAP represents a reduction of $102 million from the expected 1995-96 expenditure. This really reflects a program cut of about $120 million since a more generous award schedule (primarily applicable at private colleges) was being phased in for new students. Unlike prior years, this is a fixed appropriation with authority given to NYSHESC to review expenditures by October 1st and to reduce Spring term awards, if necessary, to stay within the appropriation. The APTS program is funded at the 1995-96 level of $14.6 million. A new block grant of $10 million is proposed to assist students including transitional funding to mitigate the burden of the revised TAP award criteria. A preliminary estimate is that the TAP program changes will cost CUNY students approximately $50 million (slightly above 1/3 of current levels of support). A new Governor's Scholarship for Academic Excellence is proposed with initial funding of $3 million for 1,000 exceptional student awards of $1,000 each and 4,000 awards of $500 each for another tier of excellent students. This initiative is expected to cost $12 million when fully phased in after 4 years. Income Determination The formula used to determine invome for TAP applicants will change: * Current: TAP income equals New York State net taxable income (NTI). NTI is the result of subtracting deductions (standard or itemized) and exemptions from the federal adjusted gross income (AGI). * Proposed: TAP income will be limited to AGI minus the New York State standard deduction and exemption only. * Result: Taxpayers with federal itemized deductions will have a higher base income for use in calculating TAP eligibility. * Typically, a traditional student would be allowed a standard deduction of $9,500 if the tax filing status was "married" and a deduction of $7,000 if the tax filing status was "single head of household." Exemptions are worth $1,000 each. Single independent filers are allowed a standard deduction of $6,000. Award Eligibility Students would have to maintain a "C" average to receive any TAP payments subsequent to the fourth payment. Students who fail this eligibility criterion will not receive payments. Students who remain academically eligible would face three proposed changes in award determination using the income reduction schedules contained in current statute: 1. The amount of tuition used in the initial determination of a TAP award is the full tuition if the AGI is "0"; otherwise, 90% of the tuition is used in the award determination. 2. One half of the student's Pell Grant award is subtracted from the initial calculation of the award. 3. If the student receives Home Relief, the Home Relief payments are also subtracted to determine the actual award. Proposed legislation limits the receipt of Home Relief to two months. Therefore, at a rate of $350 per month, this can result in up to a $700 reduction in the TAP award. Impact of TAP Proposals Dependent Student and Independents with Dependents - family size 5 with 1 in college - Senior College Tuition $3,200 AGI NTI 95-96 TAP PELL Proposed DIFFERENCE 96-97 TAP in TAP Award 0 0 2,880 2,340 2,030 -850 5,000 0 2,880 2,340 1,710 -1,170 20,000 7,500 2,845 2,340 1,675 -1,170 25,000 12,500 2,450 2,340 1,280 -1,170 Community College Tuition $2,500 AGI NTI 95-96 TAP PELL Proposed DIFFERENCE 96-97 TAP in TAP Award 0 0 2,250 2,340 1,330 -920 5,000 0 2,250 2,340 1,080 -1,170 20,000 7,500 2,215 2,340 1,045 -1,170 25,000 12,500 1,820 2,340 650 -1,170 Single Independent Family Size 1 Senior College Tuition $3,200 AGI NTI 95-96 TAP PELL Proposed DIFFERENCE 96-97 TAP in TAP Award 0 0 2,880 2,340 1,330 -850 1,000 0 2,880 2,340 1,080 -1,170 5,000 0 2,880 1,690 1,045 -845 9,000 3,000 2,880 0 650 0 Community College Tuition 2,500 AGI NTI 95-96 TAP PELL Proposed DIFFERENCE 96-97 TAP in TAP Award 0 0 2,250 2,340 1,330 -920 1,000 0 2,250 2,340 1,080 -1,170 5,000 0 2,250 1,690 1,405 -845 9,000 3,000 2,250 0 2,250 0 Capital Budget 1. The 1996-97 Executive Budget recommends a total of $262.2 million for Capital Projects, as follows: Bonded Moderate Rehab Major Projects Minor Projects TOTAL Senior Colleges $235.2 $1.63 $236.83 Community Colleges 23.0 2.34 25.34 Total by Fund Type $258.2 $3.97 $262.17 2. Projects included in the recommended budget are: a) $104.4 million for the first phase of Baruch College Site "B" construction. b) $71.7 million for the second phase of renovation costs to the B. Altman building for consolidation of the Graduate Center. c) $44 million for various projects to comply with health and safety codes, asbestos abatement, accessibility, energy conservation, facility preservation and modernization, as detailed in the Building Condition Assessment Report. d) $10 million for a Lehman College security and fire alarm system. e) $3 million for the CUNY-wide Educational Technology Equipment initiative. 3. Moderate rehabilitations (minor projects) are recommended at a $3.97 million funding level for projects to improve health and safety issues, roof replacements and emergency needs. 4. The debt service level is recommended as necessary to support the additional bonded projects. 5. Provides flexibility in the Community College program, and permits use of additional non-State funding without the full 50% State match. .