The Ohio State University Academic Plan
Note to Preliminary Cost Estimates. These expenditures are based upon a projection of available funding over the first five years. The initiatives can be scaled up or down depending upon actual funding.
Possible Available Resources for Support of the Academic Plan This section describes additional resources that could be available to support the priorities of the Academic Plan. This is not a prediction, but rather a series of scenarios designed to show the effects of various assumptions. This estimate deals with gross numbers only and does not address timing constraints or restrictions on how funds might be used. All figures are based on a five-year time span commencing in FY2002.
The fundamental assumption underlying these numbers is that the University will be able to secure additional resources beyond inflation to invest in academic priorities. These resources are expected to be generated through a series of initiatives that are presented in a range of possible scenarios. Actual figures could be higher or lower. It is important to remember that receipt of almost all of these funds, with the exception of private gifts, is dependent on legislation of one kind or another. How much the University will actually receive in FY2002 and FY2003 will not be known with any degree of certainty until passage of the next biennial budget in June of 2001.
Baseline Growth. This assumes that current trends continue (revenue growth of about 5 percent with annual compensation increases of 4 percent). Figures below are an estimate of uncommitted funds available after continuing operations are funded.
Tobacco Funds. These funds have already been appropriated. This assumes that Ohio State will receive $35-45 million (25-30 percent) of the statewide share of $150 million to be distributed over the next five years for biomedical research and technology.
Outside the Box. This scenario concludes that a combination of initiatives including a shift of Development funding from the General Fund to endowment earnings, Research Challenge, and other initiatives will produce $65-85 million in one-time funds.
Reallocation. This scenario assumes a centrally driven reallocation of $25.5-$30.5 million over the next five years. Reallocation funds include the matches for Strategic Investment ($20 million) and Women/Minority faculty hires ($2.5-5 million) as well as administrative cost reductions of $3-5 million.
Tuition Cap Relief. This scenario is predicated on an adjustment to the tuition cap at the Columbus Campus. Funds created by this adjustment would become one part of the resource base necessary to build academic excellence in undergraduate programs. The adjustment proposed would be the equivalent of three to four percentage points above the cap for each of the next four or five years. Such an adjustment would require legislative approval, and if fully implemented, could produce approximately $32 million in additional funds annually. Of this $32 million, $10 million would be earmarked for additional funding for student financial aid to offset the impact of tuition increases on those students who are least able to pay. The remaining annual income of $22 million would be targeted to the portion of the Academic Plan directly related to the improvement of undergraduate education. If legislative approval is not granted, net additional revenues would be zero. Thus, the projected net income from this initiative for the Academic Plan is estimated to range from 0 to $22 million. Under the new budget system, a substantial portion of the above-cap tuition revenue will be shared with generating colleges, and the Office of Academic Affairs will assure that these revenues are used in a manner consistent with the goals of the Academic Plan.
Ohio Plan. The Ohio Plan is a joint initiative of Ohio's colleges and universities and the Ohio Board of Regents that is still in the development stage. It is designed to be a breakthrough initiative for a partnership between higher education and the State of Ohio. This scenario assumes that Ohio State will receive between $150 million and $250 million over five years as its share of the proposal.
Private Gifts. This assumes private giving that provides $4-5 million in continuing funds and $300 million in one-time funds over five years that can be directly applied to initiatives in the Academic Plan.
Distance Learning. The University lags its benchmark institutions in the creation and dissemination of distance-learning programs. Fortunately, the substantial resources that will be required to seed distance learning programs over the next several years have the potential for significant net earnings in the longer term. Cost and revenue profiles for this initiative will be developed within a new strategic Information Technology plan to be prepared by the incoming Chief Information Officer.
Enterprise Development. The University is investing in a number of private sector partnerships which over a period of years are expected to generate revenue from royalties, patents, license fees, sponsored research, and other activities. As with distance learning, a revenue estimate for these activities is not possible at this time.
Known Commitments. Funds available are adjusted downward by $25 million in continuing funds and $200 million in one-time funds for known and emerging commitments that do not currently have an identified funding source.
|Possible Available Resources For Support of the Academic Plan (in millions)|
|Initiative*||Continuing Funds||One-Time Funds|
|Outside the Box||0||65-85|
|Tuition Cap Relief||0-32||0|
|* As already noted, Distance Learning and Enterprise Development are also expected to generate a currently unidentified amount of revenue.|
|** This estimate is based upon the current proposal. If that changes, the estimate will be scaled back accordingly.|
The above charts demonstrate that there could be a gap between our aspirations and available resources, particularly in continuing funds. We will know much more once next year's State budget is adopted. Should such a gap exist, alternatives include finding other funding sources and/or scaling back or stretching out the implementation of various initiatives.
At the end of each academic year, we will review our accomplishments and compare them with the benchmarks outlined in the next section of this plan. We will also reassess the continuing and one-time expenditures necessary to implement the plan along with currently available resources. Based on this reassessment, we will set priorities and establish our agenda for the year ahead. This process will take place during the summer in Year One of the State budget biennium and in the spring during Year Two.