[Cobo] FW: Clarification on Legis. 14% Reduc. Scenario

[Mauck, Sheri]

With the worksheet previously sent attached above for your reference.

From: Paliotta, Amanda
Sent: Thursday, April 07, 2016 10:19 AM
To: Mauck, Sheri
Subject: Clarification on Legis. 14% Reduc. Scenaro

Sheri - please send the communication below to all Business Officers on my behalf.  Thank you.

To All Business Officers:

Understandably, many of you have had questions relating to the calculations of the Legis. proposed 14% reduction scenario.  It is important to recognize that the FY'17  Legis. scenario is based on a completely new set of assumptions and parameters that is not based on the actual FY'16 budgets or total revenue reductions experienced by higher education.
Below is an description of how the Legis. calculations were figured for the higher education system:

1.       Original FY'16 appropriation of $963,412,106 was reduced by $56,199,281 (equates to only the total system FY'16 GR reduction). After holding $61,721,705 in debt service harmless from cuts, this reduction equates to a 6.23% for all other allocations (including institutions, const. agencies, State Regents admin. and programs and financial aid programs). The purpose of this calculation is only to establish a Legis. base appropriation.   It does NOT match your current year's (FY'16)reduction.  This is the amount being used for the new Legis. base appropriation going into FY'17.

2.       After holding harmless the $61,721,705 in FY'17 debt service requirement, the new Legis. FY'17 base is further reduced by another 14% ($118,368,757) for all other allocations (including institutions, const. agencies, State Regents admin. and programs and financial aid programs).

3.       Percentage changes for Legis. FY'17 scenario compared to new Legis. FY'17 base are:

a.       Debt Service - 0.00%

b.      Institutions, const. agencies, State Regents admin, etc. - 14.00%

c.       Total System - 13%

4.       Final % changes for Legis. FY'17 scenario compared to Orig. FY'16 appropriations are:

a.       Debt Service - 0.00%

b.      Institutions, const. agencies, State Regents admin, etc. - 19.36%

c.       Total System - 18.12%

Any projected  impacts being conducted based on the Legis. 14% reduction scenario should be based off the figures provided to you on March 14, from Sheri Mauck through the COBO list serv.

I hope this description helps answers any questions you may have.

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