Demys&fying

the Money:
An Inside Look into the Stark State Financial Situa&on

Howard Bunsis
Professor of Accoun2ng, Eastern Michigan University
Chair, AAUP Collec2ve Bargaining Congress
October, 2014

Roadmap

Financial Condi&on of The State

of Ohio

Financial Condi&on of Stark

State: Ra&o Analysis

Revenue Analysis: Where

is the money coming from?

Priori&es of the Administra&on:

Are They Being True to the Core
Academic Mission?

The State of Ohio:

Financial Condi&on of the State

Higher Educa&on Appropria&on

State and Na&onal Unemployment Rates

Source: Bureau of Labor Sta&s&cs; September each year, seasonable adjusted

18%#
16%#
14%#
12%#
10%#

Ohio#
Michigan#

8%#

Na7onal#

6%#
4%#

0%#

1980#
1981#
1982#
1983#
1984#
1985#
1986#
1987#
1988#
1989#
1990#
1991#
1992#
1993#
1994#
1995#
1996#
1997#
1998#
1999#
2000#
2001#
2002#
2003#
2004#
2005#
2006#
2007#
2008#
2009#
2010#
2011#
2012#
2013#
2014#

2%#

U-6 Unemployment Rate by State

Source: Bureau of Labor Sta&s&cs, 10/24/2014

15.9%%

High%(Nevada)%

14.2%%

Michigan%

12.9%%

Kentucky%
West%Virginia%

12.6%%

NaConal%

12.5%%
12.2%%

Pennsylvania%

11.8%%

Ohio%

11.5%%

Indiana%

5.4%%

Low%(North%Dakota)%

0%%

2%%

4%%

6%%

8%%

10%% 12%% 14%% 16%% 18%%

kened slightly in August, but remain squarely consistent with

erm. The 4-week moving
average
of ECRIs Weekly Leading
Ohio
Economy
Looking BeXer
even weeks ending
in mid-September,
reducing
the 6-month
Source:
Ohio Oce of Budget
Management,
October 2014
o 2.0% from a recent peak of 5.3% in late May. After a very
the composite
Ohio Leading Economic Index
the Conference
Projected 6-Month Rate of Change, %
ust, but was still
6
In contrast, prior
of change of the
4

dent Economic
Reserve Bank of
ontinues to grow
index was 4.2%
er, and the yearng steadily since
%. The index has
around the times

2
0
-2
-4
-6

07
08
09
10
11
12
13
14
Source: Philadelphia Federal Reserve Bank

State of Ohio: Total Revenues

Source: BUDGET IN DETAIL House Bill 59 130th General Assembly

70,000,000,000"
60,000,000,000"
50,000,000,000"
40,000,000,000"
30,000,000,000"
20,000,000,000"
10,000,000,000"
0"

2008" 2009" 2010" 2011" 2012" 2013" 2014" 2015"

7

2013 State of Ohio Revenue Distribu&on

Source: State of Ohio 2013 CAFR

In#Billions# Percent#of#
of#Dollars
Total
Income#Tax
9.811
19%
Sales#Tax
8.643
17%
Corporate#Taxes
2.556
5%
Fuel#Taxes
1.775
3%
Licenses,#Permits,#Fees
3.207
6%
Cigarette#taxes
0.828
2%
Federal#Gov
21.537
42%
All#Other
2.807
5%
Total#Revenues
51.164
100%

State of Ohio: Tax Revenues Only

Source: 2013 State of Ohio CAFR

3%$

4%$

12%$
35%$
6%$

Income$Tax$
Sales$Tax$
Corporate$Taxes$
Fuel$Taxes$

9%$

Licenses,$Permits,$Fees$
CigareAe$taxes$
Other$Taxes$

31%$

Tax Changes in Ohio

Old Income Tax Rates:
Progressive rates ranging
up to a high of 5.925%
Sales tax rates: State rate
was 5.5%, with most
coun&es having separate
rate of 1% to 2% on top

New: Top rate is

5.33%; Exemp&ons
and EITC expanded
State Rate is now
5.75%; Stark County is
6.50%, lowest in state;
Cuyahoga County is
8.0%, highest in state;
Digital products and
magazine subscrip&ons
now taxed
10

Gecng Rid of the Income Tax in Ohio?

Where Would the Money Come From?

hXp://www.cleveland.com/open/index.ssf/2014/10axing_ohios_income_tax_what_wo.html#incart_river

Sales Tax:

Kasich and others

have suggested this:
It would mean $8
Billion of revenue
goes away. What can
make it up?

Increasing to7% raises $2 billion

Increase it to 10% raises $6 billion
Expanding the base to include
services raises $4 billion
Other Taxes:
Biz: Increase from 0.26% to .49%
raises $733M
CigareXe: Increase from $1.25 per
pack to $raises $1.3 billion
Oil & Gas: Increase to rate in Texas
can raise $1 billion
Cut Spending:
10% ATB cut saves $2.2 B
Cut community support
saves $1.5 B

11

Major Expenditures in Ohio

2013 General Fund per CAFR
$$"in"Millions
Medicaid/Public"Assistance
21,660
K>12"Education
11,030
Community/Econ"Dev
3,377
Health"and"Human"Services
3,370
Justice/Public"Protection
3,062
Transportation
2,638
Debt"Service
1,813
All"Other
1,758
Universities">"Main"Campuses
1,231
Environmental"protection
417
Community"Colleges
404
Universities">"Branch"Campuses
116
Total"Expenditures
50,876

%"of"Total
42.6%
21.7%
6.6%
6.6%
6.0%
5.2%
3.6%
3.5%
2.4%
0.8%
0.8%
0.2%
100.0%
12

Total Higher Ed Appropria&on for Ohio:

State Share of Instruc&on (SSI)
Source: hXps://www.ohiohighered.org/nancial

$2,500,000,000##

$2,000,000,000##

$1,500,000,000##

$1,000,000,000##

$500,000,000##

$0##

2008# 2009# 2010# 2011# 2012# 2013# 2014# 2015#

13

Community College State Share of Instruc&on

hXps://www.ohiohighered.org/nancial

500,000,000""
450,000,000""
400,000,000""
350,000,000""
300,000,000""
250,000,000""
200,000,000""
150,000,000""
100,000,000""
50,000,000""
0""

2008" 2009" 2010" 2011" 2012" 2013" 2014" 2015"

14

Stark State State Share of Instruc&on

hXps://www.ohiohighered.org/nancial

30,000,000""
25,000,000""
20,000,000""
15,000,000""
10,000,000""
5,000,000""
0""
2008" 2009" 2010" 2011" 2012" 2013" 2014" 2015"

15

Percentage Changes in SSI for Universi&es,

Community Colleges, and Stark State
20%%
15%%
10%%
4!Year%Universi7es%

5%%
0%%

Community%Colleges%(w/o%
SSC)%

!5%%

Stark%State%

!10%%
!15%%
!20%%

2008% 2009% 2010% 2011% 2012% 2013% 2014%

to%09% to%10% to%11% to%12% to%13% to%14% to%15%

16

2014-15 Performance Funding for Community Colleges in Ohio:

Appropria&on from HB 59

Item
Completed.FTE
Success.Points
Completion.Milestones

Percent
50%
25%
25%

17

How Success Points are Awarded

Source: hXps://www.ohiohighered.org/node/936

1. Students earning their rst 15 college level semester SCH at this

ins2tu2on by the current year.
2. Students earning their rst 30 college level semester SCH at this
ins2tu2on by the current year.
3. Students earning at least one associate degree from this ins2tu2on
in the current year.
4. Students comple2ng their rst developmental course in the current
year earn 2/3 of a point.
5. Students comple2ng any developmental English in the previous year
and aMemp2ng any college level English either in the remainder of the
previous year on any term this year earn 2/3 of a point.
6. Students comple2ng any developmental Math in the previous year
and aMemp2ng any college level Math either in the remainder of the
previous year on any term this year earn 2/3 of a point.
7. Students enrolling for the rst 2me at a USO University main
campus or branch this year and have previously earned at least 15
college level semester SCH at this community college.
18

Performance Funding for 2015

Source: STATE SHARE OF INSTRUCTION: Formula Alloca&on 5/1/2014

FY'2015
Shares'of'

Shares'of'

Shares'of' Shares'of'

Course'
Course'
Completions' Success'
Completions'
(FTE)'7'
Points
(FTE)'
Access
BELMONT'TECH
CENTRAL'OHIO
CINCINNATI'STATE
CLARK'STATE
COLUMBUS'STATE
CUYAHOGA
EDISON'STATE
HOCKING
JAMES'RHODES'ST.
EASTERN'GATEWAY
LAKELAND
LORAIN'COUNTY
MARION'TECH
NORTH'CENTRAL
NORTHWEST'STATE
OWENS'STATE
RIO'GRANDE
SINCLAIR
SOUTHERN'STATE
STARK'STATE
TERRA'STATE''
WASHINGTON'STATE
ZANE'STATE
SUBTOTAL

1.29%
2.82%
6.57%
2.69%
14.74%
14.67%
1.75%
3.18%
2.45%
1.44%
4.29%
5.87%
1.58%
1.71%
2.71%
7.58%
1.20%
10.29%
1.72%
6.85%
1.51%
1.30%
1.78%
100.0%

1.39%
3.06%
6.69%
2.79%
14.53%
15.15%
1.57%
3.19%
2.48%
1.44%
3.74%
5.41%
1.59%
1.73%
2.51%
7.50%
1.25%
10.19%
1.81%
7.40%
1.53%
1.11%
1.92%
100.0%

1.15%
2.42%
6.52%
2.55%
15.02%
15.90%
1.89%
3.46%
2.00%
1.48%
4.38%
5.30%
1.64%
1.61%
2.28%
7.33%
1.23%
10.75%
1.83%
6.51%
1.49%
1.09%
2.17%
100.0%

Shares'of'

Shares'of'

Assoc.'
Degrees

Assoc.'
Degrees'
Access

Certificates

1.66%
3.32%
7.15%
2.58%
12.50%
12.87%
2.25%
3.40%
3.49%
1.03%
4.72%
6.64%
1.71%
2.27%
1.92%
6.34%
1.44%
10.35%
2.17%
5.91%
1.47%
2.02%
2.82%
100.0%

1.50%
3.78%
7.93%
2.72%
13.41%
15.34%
2.09%
2.73%
3.32%
0.91%
3.70%
5.52%
1.61%
2.14%
1.99%
6.07%
1.48%
9.48%
2.18%
6.45%
1.48%
1.36%
2.81%
100.0%

1.56%
3.10%
6.13%
3.92%
20.71%
5.99%
2.48%
2.20%
2.23%
3.56%
1.84%
4.28%
1.42%
0.64%
3.89%
2.31%
0.64%
8.61%
3.00%
10.41%
0.09%
2.31%
8.69%
100.0%

Shares'of'

Shares'of' Shares'of' Shares'of'

Formula'
Certificates'7'
Transfers'7'
Transfers
Total'FY'
Access
Access
2015
1.41%
2.97%
8.60%
4.44%
21.74%
6.57%
2.18%
1.57%
2.24%
2.92%
1.55%
4.00%
1.56%
0.61%
4.21%
2.85%
0.65%
6.97%
3.02%
11.68%
0.05%
1.76%
6.44%
100.0%

0.95%
1.80%
6.13%
2.37%
14.75%
17.30%
2.53%
3.10%
1.83%
1.03%
5.36%
7.00%
1.05%
1.97%
1.72%
6.71%
1.40%
9.42%
3.46%
5.90%
1.40%
1.99%
0.83%
100.0%

0.75%
2.82%
6.00%
1.66%
15.44%
22.48%
1.21%
2.73%
1.34%
1.02%
5.39%
6.08%
0.75%
1.39%
1.05%
6.52%
0.63%
10.02%
1.72%
7.81%
1.29%
0.52%
1.38%
100.0%

1.30%
2.80%
6.68%
2.63%
14.47%
14.90%
1.90%
3.24%
2.49%
1.36%
4.36%
5.84%
1.59%
1.79%
2.40%
7.18%
1.26%
10.31%
1.93%
6.63%
1.48%
1.38%
2.08%
100.0%

19

Performance Funding Result for 2015

Source: STATE SHARE OF INSTRUCTION: Formula Alloca&on 5/1/2014

BELMONT(TECH
CENTRAL(OHIO
CINCINNATI(STATE
CLARK(STATE
COLUMBUS(STATE
CUYAHOGA
EDISON(STATE
HOCKING
JAMES(RHODES(ST.
EASTERN(GATEWAY
LAKELAND
LORAIN(COUNTY
MARION(TECH
NORTH(CENTRAL
NORTHWEST(STATE
OWENS(STATE
RIO(GRANDE
SINCLAIR
SOUTHERN(STATE
STARK(STATE
TERRA(STATE((
WASHINGTON(STATE
ZANE(STATE
SUBTOTAL

FY#2013

FY#2014

FY#2015

Actual

Actual

%#Change

Projected

%#Change

$5,290,341
$10,172,989
$28,992,889
$10,137,875
$60,304,099
$57,623,181
$6,619,428
$14,206,775
$9,612,257
$4,712,349
$17,564,892
$23,206,628
$5,455,252
$6,677,774
$9,207,167
$35,432,155
$4,576,734
$42,573,655
$7,433,323
$26,066,189
$6,252,763
$5,276,198
$6,262,563
$403,657,477

$5,297,532
$10,746,962
$28,414,628
$10,810,803
$60,429,175
$59,565,164
$6,957,876
$14,167,392
$9,756,561
$5,201,388
$17,594,759
$23,474,769
$6,014,033
$6,806,799
$9,848,420
$34,369,190
$4,753,629
$42,995,103
$7,620,934
$27,793,694
$6,445,349
$5,188,293
$7,005,025
$411,257,477

0.14%
5.64%
=1.99%
6.64%
0.21%
3.37%
5.11%
=0.28%
1.50%
10.38%
0.17%
1.16%
10.24%
1.93%
6.96%
=3.00%
3.87%
0.99%
2.52%
6.63%
3.08%
=1.67%
11.86%
1.88%

$5,454,920
$11,738,761
$28,009,907
$11,039,856
$60,642,576
$62,432,066
$7,962,589
$13,591,011
$10,435,149
$5,697,724
$18,273,824
$24,477,423
$6,643,631
$7,504,003
$10,058,735
$30,102,863
$5,281,855
$43,215,173
$8,076,262
$27,772,915
$6,205,464
$5,774,479
$8,710,243
$419,101,428

2.97%
9.23%
=1.42%
2.12%
0.35%
4.81%
14.44%
=4.07%
6.96%
9.54%
3.86%
4.27%
10.47%
10.24%
2.14%
=12.41%
11.11%
0.51%
5.97%
=0.07%
=3.72%
11.30%
24.34%
1.91%

20

$7,000#

$0#
Vermont#
New#Hampshire#
South#Dakota#
Minnesota#
MassachuseBs#
New#York#
Oregon#
South#Carolina#
Pennsylvania#
Iowa#
Ohio#
Virginia#
Kentucky#
Washington#
New#Jersey#
Wisconsin#
Alabama#
North#Dakota#
Alaska#
Maryland#
Rhode#Island#
Indiana#
ConnecScut#
Colorado#
Tennessee#
Idaho#
Georgia#
Maine#
Illinois#
Utah#
Louisiana#
Oklahoma#
Delaware#
Hawaii#
Michigan#
Montana#
Florida#
West#Virginia#
Missouri#
Arkansas#
Nevada#
Nebraska#
Wyoming#
Kansas#
Mississippi#
Arizona#
North#Carolina#
Texas#
New#Mexico#
California#

Public 2-Year 30-Hour Resident Tui&on and Fees Levels

Source: The College Board, 2013-14 Tui&on and Fees

$8,000#

Ohio is 11th at $4,382. US average is $3,711

Stark State was $4,509, and is $4,608 for 2014-15

$6,000#

$5,000#

$4,000#

$3,000#

$2,000#

$1,000#

21

120%#

100%#

0%#
California#
Georgia#
Louisiana#
North#Carolina#
Idaho#
Virginia#
Hawaii#
Colorado#
New#Mexico#
South#Dakota#
Alabama#
Washington#
Nevada#
Florida#
Tennessee#
Mississippi#
Texas#
Oregon#
Pennsylvania#
South#Carolina#
MassachusePs#
Michigan#
Kansas#
Illinois#
Utah#
Wyoming#
Arkansas#
Rhode#Island#
Arizona#
New#York#
Alaska#
ConnecVcut#
Iowa#
West#Virginia#
Delaware#
Ohio#
Oklahoma#
Wisconsin#
Vermont#
Indiana#
New#Jersey#
New#Hampshire#
Maryland#
Nebraska#
Minnesota#
Kentucky#
Missouri#
Montana#
Maine#
North#Dakota#

Public 2-Year 30-Hour Resident Tui&on and Fees:

Changes from 2009 to 2013
Source: The College Board, 2013-14 Tui&on and Fees

140%#

Ohio is 36th highest at 24%;

US average is 34%, median is 29%

80%#

60%#

40%#

20%#

22

Low- and middle-income students in states with high disinvestment fare the worst
with a higher price to pay for college. A higher price means greater borrowing and
higher debt for students with the least resources. A higher price could also result
in students choosing not to go to college, meaning a decrease in access to education
in states with the greatest decrease in investment.

Center for American Progress

A Great Recession, a Great Retreat
October, 2014

FIGURE 5

Low-income students pay the most for college in states with the
greatest cuts in higher-education funding
Net price by level of state disinvestment in higher education, instititution type, and income
Cut most

2nd most

Middle

2nd least

Cut least

2 Year

$10,000

Ohio is in
the middle
group

$8000
$6,000
$4,000
$2,000
0
Low-income

$15,000

Low-middle income

4 Year

Middle-income

23

Educa&onal AXainment
Source: U.S. Census Bureau, 2008 to 2012

35%& 32.4%&
30%&

29.0%& 28.6%& 28.5%&

27.4%&
24.6%& 24.0%&

25%&
20%&
15%&

Some&College&or&
Associates&

10%&

Bachelor's&or&Higher&

5%&

Oh
Ke io&
nt
W
uc
es
ky
t&V
&
irg
Pe
i
nn nia
&
sy
lv
an
ia
&

ich
Na
i
6o gan
&
na
l&A
vg
.&
In
di
an
a&

0%&

24

State of Ohio General Obliga&on Bond Ra&ngs

2nd Highest Possible Ra&ngs
Source: State of Ohio CAFR

Moody's

S&P

Fitch

Aa1

AA+

AA+

25

Financial Condi&on
of SSC:
Ra&o Analysis

26

Financial Condi&on in the Universitys Own Words

Source: 2013 Audited nancial statements

The economy in Ohio suered greatly under the recent recession.

Large job losses have aected all sectors of the states economy. The
Ohio unemployment rate is a liXle beXer than the na&onal
unemployment rate. The unemployment rate has declined slightly in
recent months due to people dropping out of the ocial count and a
reduc&on in the ocial es&mate of the number of jobs in the economy
rather than there being an increase in employment.
The State of Ohio is receiving slightly more tax revenue than last year
from most sources, including income, sales, property taxes and the
commercial ac&vi&es tax. The State of Ohio has increased
appropria&ons for higher educa&on for this year by 1.9%.
We foresee that there may be future growth in the Ohio economy
Management rmly believes that the overall nancial posi&on of the
College is strong, and that the College has demonstrated improvement
in its nancial condi&on during the past year. The Colleges enrollment,
reserves and cash posi&on are sucient to endure worsening
condi&ons into the near future.

27

SSC Balance Sheet: VERY Strong!

Source: Audited Financial Statements

140,000,000"
120,000,000"

Does not include

the $4 million in
the endowment

How much of the $104

Million of net assets
are true reserves?

100,000,000"
80,000,000"

Total"Assets"

60,000,000"

Total"Liabili6es"

40,000,000"

Total"Net"Assets"

20,000,000"

$20M was borrowed in

0"

2008" 2009" 2010" 2011" 2012" 2013"

2011 for facili&es, and is

being paid o. This is a
very small amount of debt

28

SSC Asset Breakdown, in Millions

Incredible Growth!

Source: Audited Financial Statements (Does not include endowment)

140$$
4.4$$

120$$
100$$
91.2$$

80$$
60$$
40$$

Other$Assets$
Capital$Assets$

2.0$$

Receivables$
Cash$and$Investments$

46.7$$
7.8$$

20$$
0$$

5.5$$

27.3$$

11.0$$

2008$

2013$

29

More Evidence of Balance Sheet Strength:

SSC Current Ra&o
Source: Audited Financial Statements

2008

Current-Assets

2010

17,318,909 20,819,952 26,740,961

Current-Liabilities 5,350,837

Current-Ratio

2009

3.2

2011

2012

2013

33,540,021

35,106,841 36,920,982

6,400,621

7,717,824

13,840,643

9,314,419

8,496,289

3.3

3.5

2.4

3.8

4.3

The current ra&o is dened as current assets divided by current liabili&es

Current assets are items that will turn into cash within one year, and current
liabili&es are obliga&ons that have to be paid in cash within one year
A current ra&o above 1.0 is considered solid; a ra&o of 4.3 is o the charts high.

30

Reserves
Total Net
Assets

Invested in
Capital Assets

Restricted
Net Assets

Expendable

Reserves or
Expendable
Net Assets

Restricted
Expendable

Unrestricted
Net Assets

Non-expendable

Unrestricted
Net Assets

31

First Two Components of Net Assets

From the prior chart, when we examine net
assets, the two white categories are not
considered part of true reserves:
Invested in capital assets are the value of the
buildings, and universi2es need the buildings to
operate. Since the university will not sell the
buildings, their value is not considered when
analyzing the nancial health of the ins2tu2on
Restricted non-expendable represents funds
donated to the university and the principal can
never be spent.
32

Deni&on of Restricted Expendable Reserves

Restricted-expendable net assets represent funds that can
only be used for a specic purpose.
For example, a bond sinking fund is set up for future
principal and interest payments, and the University is not
allowed to use any of those funds for any purpose except
paying o the debt (the fund cannot be used for faculty
salaries, for example).
However, the existence of these assets s2ll helps the
ins2tu2on. Lets say you have a home mortgage, and all of
your future house payments are covered in a fund. You
cannot touch this fund for anything but house payments.
The existence of this fund s2ll helps your overall nancial
situa2on.
This category is a very small amount for Stark State
33

Deni&on of Unrestricted Reserves

The administra2on will claim that unrestricted is
not unrestricted, as they have designated those
funds for par2cular purposes (they belong to the
departments is o`en heard)
However, the Board cam reverse those
designa2ons. If the designa2ons were a set in
stone no-way-you-can-get-out-of-them
commitments, the external auditors would put
them in the restricted-expendable or restricted
nonexpendable categories.
Therefore, unrestricted is really unrestricted.

34

SSC Net Asset Detail

Source: SSC Audited Financial Statements

2008

2009

2010

2011

2012

2013

Total,Assets

65,237,980

73,991,754

90,148,913

122,775,127

121,863,589

130,737,572

Total,Liabilities

6,396,924

7,394,183

8,701,689

33,490,758

28,322,445

26,785,626

Total,Net,Assets

58,841,056

66,597,571

81,447,224

89,284,369

93,541,144

103,951,946

2008

2009

2010

2011

2012

2013

46,743,739

51,876,786

61,665,302

64,371,835

65,555,844

73,573,493

Restricted,NonCExpendable

255,665

227,381

318,054

358,657

261,028

276,235

Restricted,Expendable

764,993

747,634

759,276

715,668

329,000

566,239

Unrestricted

11,076,659

13,745,770

18,704,592

23,838,209

27,395,272

29,535,979

Total,Net,Assets

58,841,056

66,597,571

81,447,224

89,284,369

93,541,144

103,951,946

Net,Assets:
Invested,in,Capital,Assets

35

SSC Reserve Components of Net Assets

Net$Assets:

2008

2009

2010

2011

2012

2013

46,743,739

51,876,786

61,665,302

64,371,835

65,555,844

73,573,493

Restricted$Non@Expendable

255,665

227,381

318,054

358,657

261,028

276,235

Restricted$Expendable

764,993

747,634

759,276

715,668

329,000

566,239

Unrestricted

11,076,659

13,745,770

18,704,592

23,838,209

27,395,272

29,535,979

Total$Net$Assets

58,841,056

66,597,571

81,447,224

89,284,369

93,541,144

103,951,946

2008

2009

2010

2011

2012

2013

11,076,659

13,745,770

18,704,592

23,838,209

27,395,272

29,535,979

764,993

747,634

759,276

715,668

329,000

566,239

11,841,652

14,493,404

19,463,868

24,553,877

27,724,272

30,102,218

Invested$in$Capital$Assets

True$Reserves:
Unrestricted
Restricted$Expendable
Total$Reserves

36

Discussion of SSC Net Assets

The rst two categories of net assets do not
tell us anything about the nancial health or
exibility of SSC
The laXer two categories expendable and
unrestricted, tell us something, as they are
the two components of reserves.
For SSC, almost all the reserves are

unrestricted

37

SSC Reserves Graphically

Source: Audited Financial Statements

35,000,000""

Does this mean there is

$30M free to spend?
A safe level is the red
line, based on a % of
total expenses

30,000,000""
25,000,000""
20,000,000""

Restricted"Expendable"
Unrestricted"

15,000,000""
10,000,000""
5,000,000""
0""

2008" 2009" 2010" 2011" 2012" 2013"

38

SSC Size of Reserves Rela&ve To Opera&ng Expenses:

Primary Reserve Ra&o

2008

2009

2010

2011

2012

2013

Total,Reserves

11,841,652

14,493,404

19,463,868

24,553,877

27,724,272

30,102,218

Total,Expenses

54,973,610

66,883,781

86,129,615

102,988,753 108,549,030 103,120,236

22%

22%

23%

Primary,
Reserve,Ratio

24%

26%

29%

The primary reserve ra&o is dened as reserves over total expenses

A ra&o of 29% says that SSC could keep paying employees and keep
the lights on for 3 months if all the revenue dried up; a prudent
ra&o is 2 months (15-17% ra&o)

39

SSC Primary Reserve Ra&o in Context

50%#
45%#
40%#

SSC#

35%#

Excellent#

30%#

Very#Good#

25%#

Good#

20%#

Solid#

15%#

ok#

10%#

Ques?onable#

5%#

Trouble#

0%#
2008# 2009# 2010# 2011# 2012# 2013#
40

SSC Size of Reserves Rela&ve to Debt:

Viability Ra&o
2008

Reserves
Debt4

Viability4Ratio

2009

2010

2011

2012

2013

11,841,652 14,493,404 19,463,868 24,553,877 27,724,272 30,102,218

NA

NA

NA

19,443,994 18,636,250 17,822,917

126%

149%

169%

The viability ra&o is dened as reserves divided by interest-bearing debt

From 2008 to 2010, Stark had no debt, so the ra&o is not applicable,
though it does indicate strength
The 169% is a very strong ra&o, indica&ng a strong level of reserves and
low level of debt

41

SSC Viability Ra&o in Context

250%#

200%#

SSC#
Excellent#

150%#

Very#Good#
Good#
Solid#

100%#

ok#
Ques>onable#

50%#

Trouble#

0%#
2008#

2009#

2010#

2011#

2012#

2013#

42

SSC Revenues vs. Expenses: Net Income Ra&o

(also known as Net Asset Ra&o)
Large Prots Every Year Source: Audited Financial Statements

2008

2009

2010

2011

2012

2013

Total,Revenues

60,172,397

74,640,296

96,025,334

111,611,931 113,646,405 114,355,763

Total,Expenses

54,973,610

66,883,781

86,129,615

103,774,786 109,389,630 103,944,961

Change,in,Net,
Assets

5,198,787

7,756,515

9,895,719

7,837,145

4,256,775

10,410,802

Net,Asset,Ratio

8.6%

10.4%

10.3%

7.0%

3.7%

9.1%

The net asset ra&o is dened as the change in net assets as a percent of total revenues.
The change in net assets is dened as total revenues less total expenses
Anything above 5% is considered extremely high
SSC is above 5% for every year but 2012, where it was above 3% (s&ll strong)

43

SSC Net Income Ra&o in Context:

O the Charts High
12%$
10%$

SSC$

8%$

Excellent$

6%$

Very$Good$
Good$

4%$

Solid$

2%$

ok$

0%$

Trouble$

Ques@onable$

!2%$
2008$ 2009$ 2010$ 2011$ 2012$ 2013$
44

SSC Cash Flows: Cash Flow Ra&o

Strong and Posi&ve Every Year
Source: Audited Financial Statements
2008
Cash+Flows+from+
Operations
Cash+Flows+from+NoncB
capital+financing+(mostly+
SSI)
Interest+expense
Operating+cash+flows
Total+Revenues

Cash+Flow+Ratio

2009

2010

2011

2012

2013

(28,034,624) (33,981,270) (42,370,407) (56,643,525) (58,435,950) (53,913,842)

30,726,673

38,284,227

47,975,710

62,824,859

62,762,830

61,826,198

(786,033)

(840,600)

(824,725)

2,692,049

4,302,957

5,605,303

5,395,301

3,486,280

7,087,631

60,172,397

74,640,296

96,025,334

111,611,931

113,646,405

114,355,763

4.5%

5.8%

5.8%

4.8%

3.1%

6.2%

The Cash Flow ra&o is dened as opera&ng cash ows as a % of total revenues
SSC generated over $7 Million of EXCESS cash ows in 2013; this is awer paying
all employees and vendors for everything

45

SSC Cash Flow Ra&o in Context

8%$
6%$

Excellent$
Very$Good$

4%$

Good$
Solid$
ok$

2%$

Ques?onable$
Trouble$

0%$

SSC$

!2%$
2008$

2009$

2010$

2011$

2012$

2013$

46

What is the Dierence Between

The Change in Net Assets and Cash Flows?

The change in net

assets = Total
Revenues Total
Expenses for the
year; Total net
assets (some of
which are reserves)
get built up if the
change in net assets
is posi&ve, which is
true at SSC

Add back
deprecia&on
expense and other
non-cash
expenses

Add or subtract
paper gains on
investments

Opera&ng Cash Flows;

This includes all cash
coming in, less all cash
going out for recurring
items

47

Senate Bill 6 Ra&os in Ohio

Some years ago, the Ohio Board of Regents
authorized Moodys to come up with a ra2o
formula2on to assess the nancial strength of
higher educa2on ins2tu2ons
These ra2os are published every year, and
2013 can be found at:
hMps://www.ohiohighered.org/sites/
ohiohighered.org/les/uploads/nancial/SB6/
FY13-SB6-Scores.pdf

48

Moodys Ra&o Analysis

Moodys uses three ra2os to judge the nancial
condi2on of public universi2es. In fact, the SFSU
nancial statements refer to the Moodys ra2ngs of
the State system.
Then a composite score is compiled based on these 3
ra2os:
Primary Reserve Ra2o
Are there sucient reserves?

Viability Ra2o

Is there too much debt?

Net Income Ra2o

Are revenues and expenses in line with each other?

49

Moodys Ra&o Deni&ons

Primary reserve ra+o: Expendable net assets
divided by total opera2ng expenses.
Viability ra+o: Expendable net assets divided
by debt.
Net Income Ra+o: Change in total net assets
divided by total revenues.
Final Score =
50% * Primary Reserve Ra2o +
30% * Viability Ra2o +
20% * Net Income Ra2o
50

Moodys Summary Scores

51

Fichtenbaum-Bunsis Ra&os
First Three Ra&os are Same as Moodys

A perfect score is 5.0

To be in nancial exigency, there needs to be two
consecu&ve years below 1.75
These ra&os are similar to those used by Moodys and
KPMG in their public nance analysis
52

Fichtenbaum-Bunsis: Summary of Ra&o

Deni&ons and Benchmarks

53

Fichtenbaum-Bunsis Ra&o Scores

54

SSC Ra&o Details

Viability.Ratio
Primary.Reserve.Ratio
Cash.Flow.Ratio
Net.Asset.Ratio

2008
250%
22%
4.5%
8.6%

2009
250%
22%
5.8%
10.4%

2010
250%
23%
5.8%
10.3%

2011
126%
24%
4.8%
7.0%

2012
149%
26%
3.1%
3.7%

2013
169%
29%
6.2%
9.1%

Viability.Score
Primary.Reserve.Score
Cash.Flow.Score
Net.Asset.Score

4.50
3.27
4.24
5.00

4.50
3.28
4.88
5.00

4.50
3.34
4.92
5.00

3.68
3.42
4.43
5.00

3.83
3.52
3.55
3.89

3.96
3.67
5.00
5.00

2008

2009

2010

2011

2012

2013

3.96

4.09

4.12

3.88

3.64

4.17

3.70

3.70

3.70

3.70

4.00

4.20

FichtenbaumGBunsis.
Composite.Score
Moody's.Senate.Bill.6.
Score

55

SSC Ra&o Scores in Context

5.0#
4.5#
4.0#
3.5#
3.0#

Perfect#Score#

2.5#

SSC#Fichtenbaum<Bunsis#

2.0#

SSC#Senate#Bill#6#(Moodys)#
Trouble#Score#

1.5#
1.0#
0.5#
0.0#
2008#

2009#

2010#

2011#

2012#

2013#

56

Senate Bill 6: 2013 (Moody's) Scores for All

Community Colleges in Ohio

OWENS#STATE##

LORAIN##

NORTH#CENTRAL##

SOUTHERN#ST.##

CINCINNATI#ST.##

CUYAHOGA##

MARION#TECH##

LAKELAND##

EASTERN#GATEWAY##

TERRA#STATE##

EDISON#STATE##

JAMES#RHODES#ST##

RIO#GRANDE##

HOCKING##

CLARK#STATE##

NORTHWEST#ST.##

SINCLAIR##

COLUMBUS#ST.##

Stark#State#

WASHINGTON#ST.##

COTC##

5.00#
4.50#
4.00#
3.50#
3.00#
2.50#
2.00#
1.50#
1.00#
0.50#
0.00#

BELMONT#TECH##

Source: hXps://www.ohiohighered.org/sites/ohiohighered.org/les/uploads/nancial/SB6/FY13-SB6-Scores.pdf

57

What SSC Administrators Would Say to Outsiders on the

Budget and the Outsiders Responses
SSC Administrators

The Key is the budget

We are limited in what we can
charge for tui&on
We would love to spend more
on faculty salaries and students,
but there are signicant poli&cal
hurdles
Those reserves are spoken for
or restricted

Outsider Responses:

Actual nancial statements

tell the true story
The administra&on at SSC
has much more exibility
than they claim; they spend
internally and borrow on
their own
Why are they lecng the
percent to the core mission
decline?
Unrestricted is unrestricted

58

Problems with Budgets

Budgets always balance, with
revenues = expenditures
Talk of budget holes and
gaps describe self-imposed
and internally created gaps.
They are based on projec&ons

Real life never balances

Administrators typically predict revenues
will be lower than actual, and that
expenses will be higher than actual
Then, when reality comes in beXer than
they predicted, they take credit for
balancing the budget and being scally
prudent.

Budget hysteria (we must cut, cut, cut,

cut, cut) is simply an exercise in trying to
make things look worse than they are

So that credit can later be taken

for xing a self-imposed problem.

Budgets are plans; they are a guide

to where spending is going.

However, what is more relevant in

analyzing a universitys nances are
actual audited nancial statements

59

SSC Revenue
Analysis

60

SSC 2013 Revenue Distribu&on

4%$

Fed$Grants$(mostly$
Pell)$

3%$ 3%$

31%$

10%$

Tui<on$and$Fees$
State$Appropria<on$
Auxiliaries$

23%$

Capital$Appropria<on$
26%$

Grants$and$Contracts$
Other$

61

SSC 2013 Revenue Distribu&on Without Pell Grants

5%$

Tui,on$and$Fees$

4%$

6%$

State$Appropria,on$
38%$

14%$

Auxiliaries$
Capital$
Appropria,on$

33%$

Grants$and$
Contracts$
Other$

62

Revenue Distribu&on Over Time

Source: Audited Financial Statements

2008

2009

2010

2011

2012

2013

Tuition-and-Fees

18,863,324

23,133,468

28,626,853

31,075,657

30,400,300

30,250,282

Grants-and-Contracts

4,163,569

5,951,185

4,850,416

6,393,390

4,214,295

3,637,235

Auxiliaries

4,209,897

4,944,680

6,243,801

7,572,641

11,070,899

11,446,752

State-Appropriation

18,568,670

21,309,454

20,206,375

21,603,186

24,728,161

26,170,950

Capital-Appropriation

2,968,788

2,855,736

873,604

2,810,816

4,900,000

Fed-Grants-(mostly-Pell)

9,814,518

14,270,280

31,457,605

40,640,635

36,571,724

34,831,388

Other

1,583,631

2,175,493

3,766,680

1,515,606

6,661,026

3,119,156

Total-Revenues

60,172,397

74,640,296

96,025,334 111,611,931 113,646,405 114,355,763

In 2010 and 2011, there was an increase in Pell grants, but there was also
federal s&mulus money. The State data included the addi&onal dollars in SSI,
but the audited statements put the federal s&mulus in Federal grants
The at tui&on and fees is aected by scholarship allowances

63

SSC Revenue Dollar Distribu&on Graphically

45,000,000""
40,000,000""
35,000,000""

Tui.on"and"Fees"

30,000,000""

Grants"and"Contracts"

25,000,000""

Auxiliaries"

20,000,000""

State"Appropria.on"
Capital"Appropria.on"

15,000,000""

Fed"Grants"(mostly"Pell)"

10,000,000""

Other"

5,000,000""
0""
2008"

2009"

2010"

2011"

2012"

2013"

64

SSC Percentage Revenue Distribu&on Graphically

Source: Audited Financial Statements

40%#
35%#
30%#

Tui.on#and#Fees#

25%#

Grants#and#Contracts#
Auxiliaries#

20%#

State#Appropria.on#

15%#

Capital#Appropria.on#

10%#

Fed#Grants#(mostly#Pell)#
Other#

5%#
0%#
2008# 2009# 2010# 2011# 2012# 2013#

65

Headcount Enrollment
Source: Ohio Board of Regents, April 2014

18,000"
16,000"
14,000"
12,000"
10,000"
8,000"
6,000"
4,000"
2,000"
0"
2007"

2008"

2009"

2010"

2011"

2012"

2013"

2014"

66

Headcount Enrollment Changes

Sources: Ohio Board of Regents, April 2014 and SSC for Fall 2014
Fall$
2006

Fall$
2007

Fall$
2008

Fall$
2009

Fall$
2010

Fall$
2011

Fall$
2012

Fall$
2013

2007
Headcount 7,920

2008

2009

2010

2011

2012

2013

2014

8,632

9,516

12,610 14,709 15,494 15,252 14,963

Changes:
Number
Percent

2007$ 2008$ 2009$ 2010$ 2011$ 2012$ 2013$ 2014$

to$08 to$09 to$10 to$11 to$12 to$13 to$14 to$15
712
9.0%

884 3,094 2,099

10.2% 32.5% 16.6%

785
5.3%

E242
E1.6%

E289
E1.9%

E840
E5.6%

Fall$2014
2015$(not$
official)
14,123

2007$to$
2014
7,043
89%

This is incredible enrollment growth over this &me period

Though the growth has subsided, tui&on is the largest revenue
source other than Federal, and is why the administra&on has built
up such strong reserves and cash ows

67

Dierences in Enrollment Data

Headcount
Ohio,Board,of,Regents
SSC,Data

Fall,2012
15,252
15,672

Fall,2013
14,963
15,452

%,Changes
Ohio,Board,of,Regents
SSC,Data

Fall,12,to,
Fall,13
D1.9%
D1.4%

Fall,13,to,
Fall,14

SSC,vs,Ohio,BOR

Fall,2014
14,123

D8.6%
D5.6%

The data from the Ohio Board of Regents is the ocial enrollment data, and
was reported by the Board in April of 2014
The SSC data is a preliminary headcount, and is of the 14th day of the term
The Fall 14 loss would be much less severe if the Ohio Board number is used
as the Fall 2013 base. It is not known what the ocial numbers will be at
this &me

68

Enrollment Changes at SSC vs. Other

Community Colleges in Ohio
35%%
30%%
25%%
20%%

From 2007 to 2014:

SSC has grown 89%
All other CCs have grown 8%

15%%

SSC%

10%%

Other%CC%

5%%
0%%
!5%%
!10%%

2007%to% 2008%to% 2009%to% 2010%to% 2011%to% 2012%to% 2013%to%

08%
09%
10%
11%
12%
13%
14%

69

FTE Enrollment

(only available through Fiscal 2013, which is Fall 2012)

Source: Ohio Board of Regents, November 2013

FTE
HC
Ratio$of$FTE$to$HC

FTE
HC

Fall$2006 Fall$2007 Fall$2008 Fall$2009 Fall$2010 Fall$2011 Fall$2012

2007
2008
2009
2010
2011
2012
2013
5,180
5,677
6,478
8,360
9,888
9,749
9,335
7,920

8,632

9,516

12,610

14,709

15,494

15,252

0.65

0.66

0.68

0.66

0.67

0.63

0.61

2007$to$ 2008$to$ 2009$to$ 2010$to$ 2011$to$ 2012$to$ 2007$to$

08
09
10
11
12
13
2013
9.6%
14.1%
29.1%
18.3%
;1.4%
;4.2%
80%
9.0%
10.2%
32.5%
16.6%
5.3%
;1.6%
93%

70

Stark State part of $1 million prize for

improvement in postsecondary aXainment

Stark State press release, October 29, 2014

Stark State College is part of a $1 million Talent Dividend award

presented today by CEOs for Ci2es in recogni2on of improvement
in postsecondary aMainment in the Akron metropolitan area, which
includes The University of Akron, Kent State University, Hiram
University and Northeast Ohio Medical University (NEOMED), in
partnership with the Northeast Ohio Council on Higher Educa2on
(NOCHE).
"Through collabora2on, our region has had a strong 20 percent
increase in college degree holders during the past four years," said
Para M. Jones, president of Stark State College, who was in
Washington, DC for todays announcement.
In the past year, Stark State has conferred a record number of
associate degrees and cer&cates in support of workforce
development.

71

State Share of Instruc&on (SSI) per Student (Headcount)

$3,000''
$2,500'' $2,314''

$2,445''

$2,579''
$2,159''

$2,000''

$1,672'' $1,682'' $1,729''

$1,500''
$1,000''
$500''
$0''
2008'

2009'

2010'

2011'

2012'

2013'

2014'
72

SSI per Student

Same Graph, Dierent Scale (Administra&on Viewpoint)

$2,700''

$2,579''
$2,445''

$2,500''
$2,300''

$2,314''
$2,159''

$2,100''
$1,900''
$1,672'' $1,682''

$1,700''

$1,729''

$1,500''
2008'

2009'

2010'

2011'

2012'

2013'

2014'
73

Tui&on and Fees

Source: Ohio Board of Regents

$8,000##
$7,000##
$6,000##
$5,000##
$4,000##
$3,000##

In#State#
Out#of#State#

$2,000##
$1,000##

20
07
#
20
08
#
20
09
#
20
10
#
20
11
#
20
12
#
20
13
#
20
14
#
20
15
#

$0##

74

Numbers Behind Tui&on and Fees

Source: Ohio Board of Regents

2007

2008

2009

2010

2011

2012

2013

2014

2015

In,State

$3,810

$3,810

$3,810

$3,874

$4,073

$4,215

$4,410

$4,509

$4,608

Out,of,State

$5,610

$5,610

$5,610

$6,124

$6,323

$6,465

$7,140

$7,239

$7,338

2007,
to,08

2008,
to,09

2009,
to,10

2010,
to,11

2011,
to,12

2012,
to,13

2013,
to,14

2014, 2007,to,
to,15
2015

$0

$0

$64

$199

$142

$195

$99

$99

In,State,$,Change
In,State,%,Change

Out,of,State,$,Change

0.0% 0.0% 1.7% 5.1% 3.5% 4.6% 2.2% 2.2%

$0

Out,of,State,%,Change 0.0%

$0

$514 $199 $142 $675

$99

$99

0.0% 9.2% 3.2% 2.2% 10.4% 1.4% 1.4%

$798
21%

$1,728
31%

75

Tui&on Revenue Changes

35%%
30%%
25%%
20%%

From 2008 to 2013:

Enrollment up 77%
Tui&on price up 16%
Tui&on revenue up 74%

15%%
10%%

Enrolment%Change%
Tui<on%Price%Change%

5%%

Tui<on%Revenue%Change%

0%%
!5%%
!10%%

2007% 2008% 2009% 2010% 2011% 2012% 2013% 2014%

to%08% to%09% to%10% to%11% to%12% to%13% to%14% to%15%

76

Another Factor: Discount Rate on Tui&on:

Source: Audited Financial Statements

2008

2009

2010

2011

2012

2013

Gross+Tuition+and+Fees

23,220,276

27,004,890

36,081,537

41,763,081

43,106,806

43,224,745

Less+Scholarship+Allowance

4,356,952

3,871,422

7,454,684

10,687,424

12,706,506

12,974,463

Net+Tuition+and+Fees

18,863,324

23,133,468

28,626,853

31,075,657

30,400,300

30,250,282

18.8%

14.3%

20.7%

25.6%

29.5%

30.0%

Discount+Rate

77

Priori&es of the
Administra&on:
Are They Being True to the
Core Academic Mission?
Where do Budgets Fit In?
78

SSC 2013 Expense Distribu&on

Source: Audited Financial Statements
0.8%&
3.0%&

Instruc5on&

9.3%&

1.8%&

Research&
Academic&Support&

32.6%&

Student&Services&
Ins5tu5onal&Support&
Plant&

23.8%&

Student&Aid&
Public&Service&
0.03%&
7.2%&

5.4%&

10.2%&

6.0%&

Deprecia5on&
Auxiliaries&
Interest&

79

Expense Category Deni&ons

Instruction

Salaries.of.those.who.teach;.academic.admins.are.out

Academic.Support

Deans.and.Libraries;.Advising

Auxiliaries

Housing,.dining,.bookstore,.parking,.athletics

Institutional.Support

Upper.level.administration

Scholarships/Student.Aid Direct.aid.to.students

Plant

Buildings.and.grounds

Student.Services

Admissions;.student.orgs

Research

Includes.external.grants.and.internal.spending

Depreciation

Estimated.decline.in.value.of.buildings

Public.Service

Conferences.and.institutes

80

Expense Dollar Distribu&on

2008

2009

2010

2011

2012

2013

21,166,709

23,693,848

29,704,484

34,503,760

34,788,615

33,852,101

1,079,261

581,968

35,693

Academic<Support

3,744,102

4,108,736

5,070,756

5,712,396

7,726,872

6,285,340

Student<Services

3,532,974

4,322,991

5,848,227

6,673,000

7,955,976

7,452,068

Institutional<Support

7,677,897

7,851,937

8,165,426

9,259,996

11,073,769

10,556,107

Plant

3,672,848

4,662,226

5,249,476

6,624,577

6,040,077

5,633,419

Student<Aid

7,844,360

14,316,098

22,397,823

28,482,384

26,268,853

24,730,144

Public<Service

2,073,744

2,084,129

2,600,880

2,081,062

2,229,501

1,866,741

Depreciation

1,786,718

1,844,469

1,985,530

2,379,885

2,897,386

3,078,177

Auxiliaries

3,474,258

3,999,347

5,107,013

6,192,432

8,986,013

9,630,446

786,033

840,600

824,725

54,973,610

66,883,781

86,129,615

Instruction
Research

Interest
Total<Expenses

103,774,786 109,389,630 103,944,961

81

Expense Percentage Distribu&on Over Time

The Percent Devoted to Instruc&on Going Down
2008

2009

2010

2011

2012

2013

Instruction

38.5%

35.4%

34.5%

33.2%

31.8%

32.6%

Research

0.0%

0.0%

0.0%

1.0%

0.5%

0.0%

Academic<Support

6.8%

6.1%

5.9%

5.5%

7.1%

6.0%

Student<Services

6.4%

6.5%

6.8%

6.4%

7.3%

7.2%

Institutional<Support

14.0%

11.7%

9.5%

8.9%

10.1%

10.2%

Plant

6.7%

7.0%

6.1%

6.4%

5.5%

5.4%

Student<Aid

14.3%

21.4%

26.0%

27.4%

24.0%

23.8%

Public<Service

3.8%

3.1%

3.0%

2.0%

2.0%

1.8%

Depreciation

3.3%

2.8%

2.3%

2.3%

2.6%

3.0%

Auxiliaries

6.3%

6.0%

5.9%

6.0%

8.2%

9.3%

Interest

0.0%

0.0%

0.0%

0.8%

0.8%

0.8%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Total<Expenses

82

Auxiliary (Bookstore) Revenues and Expenses

Source: Audited Financial Statements

2008

2009

2010

2011

Auxiliary/Revenues

4,209,897

4,944,680

6,243,801

7,572,641

11,070,899 11,446,752

Auxiliary/Expenses

3,474,258

3,999,347

5,107,013

6,192,432

8,986,013

9,630,446

735,639

945,333

1,136,788

1,380,209

2,084,886

1,816,306

Auxiliary/Profit

2012

2013

83

Salaries and Benets: Instruc&onal Component in Context

Source: IPEDS (Integrated Postsecondary Educa&on Data System of the U.S. Dept. of Educa&on)

70%#
60%#
50%#
Instruc4on#Salaries#&#Benets#
as#a#%#of#Total#Salaries#&#
Benets#

40%#
30%#

Instruc4on#Salaries#&#Benets#
as#a#%#of#Total#Univ#Expenses#

20%#
10%#
0%#
2008#

2009#

2010#

2011#

2012#

2013#

Instruc&on salaries and benets are less than 60% of total salaries and benets
Those who teach are barely 30% of total expenses and this percentage is declining

84

Data Behind Instruc&onal Salaries and Benets

Source: IPEDS

2008

2009

2010

2011

2012

2013

19,528,586

22,013,768

27,226,210

30,965,267

32,180,309

31,577,639

Total0Salaries0and0Benefits 33,574,345
Instruction0Salaries0&0
Benefits0as0a0%0of0Total0
Salaries0&0Benefits
58.2%

37,563,058

45,168,468

50,759,971

55,380,338

55,060,514

58.6%

60.3%

61.0%

58.1%

57.4%

2008

2009

2010

2011

2012

2013

19,528,586

22,013,768

27,226,210

30,965,267

32,180,309

31,577,639

54,973,610

66,883,781

86,129,615

103,774,786 109,389,630 103,944,961

35.5%

32.9%

31.6%

Instruction0Salaries0and0
Benefits

Instruction0Salaries0and0
Benefits

Total0University0Expenses
Instruction0Salaries0&0
Benefits0as0a0%0of0Total0
Univ0Expenses

29.8%

29.4%

30.4%

Of all salaries and benets, only 57% go to those who teach, and the percentage is declining
Of total university expenses, only 30% goes to those who teach, and the percentage is declining

85

Instruc&on Expense Detail per IPEDS, 2012 vs. 2013

2012

25,679,834
6,500,475
Plant
2,864,987
Depreciation
1,374,315
Interest
398,721
Other
2,608,306
Total;Instruction;IPEDS 39,426,638
Total;per;Audited
34,788,615
Sal;+;Ben;+;Other
34,788,615
Salaries
Fringes

2013

%&Change

25,364,956
6,212,683
2,736,900
1,495,478
400,679
2,274,463
38,485,159
33,852,101
33,852,102

!1.2%
!4.4%
!4.5%
8.8%
0.5%
!12.8%
!2.4%
!2.7%
!2.7%

Instruc&on costs declined 2.4% per IPEDS, and 2.7% per the
audited nancial statements
Salaries and benets declined even more
Issue to address: What is contained in other, which is over $2
million each year?

86

The Stark State Administra&on Explaining the

Decline in Instruc&on Costs in 2013
Source: Audited Financial Statements

The College increased the usage of part-

&me instructors. Many full-&me posi&ons
were vacated and the employees were not
replaced compared to the prior scal year.

Addi&onally, all part-&me hourly
employees were limited to working no
more than an average of 29 hours per week
star&ng in January 2013.

87

Ins&tu&onal Support (Upper Level Administra&on)

Source: IPEDS
2012

2013

5,336,929 5,581,530
1,481,619 1,497,204
Plant
911,971
853,448
Depreciation
437,467
466,336
Interest
126,919
124,944
Other
4,255,221 3,477,372
Total&Inst&Support&IPEDS 12,550,126 12,000,834
Audited&Fins
11,073,769
10,556,107
Sal&+&Ben&+&Other
11,073,769
10,556,106
Salaries
Fringes

%&Change

4.6%
1.1%
=6.4%
6.6%
=1.6%
=18.3%
=4.4%
=4.7%
=4.7%

Per the audited statements and IPEDS, these administra&ve costs declined from
2012 to 2013
However, the salary and benet components of these costs increased
The main reason these costs declined was a decline in the other component
of ins&tu&onal support
Issue to address: What is in the other component of ins&tu&onal support?

88

Number of Faculty
Source: IPEDS

900""
800""
700""
600""
500""

Part"Time"Faculty"

400""

FT"Faculty"

300""
200""
100""
0""
2008" 2009" 2010" 2011" 2012" 2013" 2014"

FT*Faculty
Part*Time*Faculty
Total*Faculty

2008

2009

2010

2011

2012

2013

2014

147
455
602

152
547
699

166
649
815

195
609
804

198
532
730

198
443
641

199
493
692

89

2013-14 Average Salaries of Employee Groups per IPEDS

Management'

$113,195''

Community/Legal/Media'

$63,936''

Instructors'

$63,179''

Business/Fin'Ops'

$61,346''

Computer/Eng/Sci'

$60,308''

ConstrucFon/Maint,'
Library/Student'Aairs'
Oce'and'Admin'Support'
Service'

$54,308''
$49,546''
$45,352''
$43,073''

90

Percent Change in Employees and Enrollment:

2008 to 2014
80%$

73%$

70%$
60%$
50%$
40%$
30%$
20%$
10%$
0%$

35%$
22%$
15%$

8%$

HC$
FT$Faculty$ Non$Faculty$ Total$Faculty$ PT$Faculty$
FT$
Enrollment$
Employees$

91

From the SSC October 2014 Board Mee&ng:

New Hires
Position
Adjunct1Instructors1(per5hour,1non5benefit1
eligible1positions)
Assistant1Instructors1(per5hour,1non5
benefit1eligible1positions)
Instructors1(full5time1salaried,1benefit5
eligible1positions)
Total1Faculty1Hires
Non1Faculty1Hires
Total1New1Positions1for12014515

Number
22
4
3
29
15
44

92

Commitment to a Quality Educa&on?

GOAL 1 of the 2014-16 Strategic Plan:
Con&nuously provide value and high quality educa&on

From the 2011-13 Strategic Plan:

We foster a college culture that provides high-quality educa&on

through aordability and ins&tu&onal excellence. We uphold
high academic standards and individual student support.

From the 2014 Bond Report:

As enrollment grows, adjunct faculty are added. Should
enrollment decrease, adjuncts would not be hired in those
par&cular departments. This gives the College exibility
within its opera&ng budget to manage its expenditures in
the context of its enrollment.
93

Salaries:
Faculty and
Administra&on

94

$100,000##
$90,000##
$80,000##
$70,000##
$60,000##
$50,000##
$40,000##
$30,000##
$20,000##
$10,000##
$0##
Terra#State#

Washington#State##

Belmont#College#

Eastern#Gateway#

North#Central#State#

Edison#State##

Zane#State#

Hocking#College#

Rhodes#State##

Central#Ohio##

Clark#State##

Marion#Technical##

Columbus#State##

Southern#State##

Northwest#State##

Owens#

Stark#State#

OSU#Ag#Tech#

Sinclair#

Cincinna?#State#

Lorain#County#

Cuyahoga#County#

Lakeland#

2012-13 Stark State vs. Ohio Community College Peers

Source: IPEDS

Stark State is at $58,932

Peer Average is $54,089

95

Top 25 Administra&on Salaries, 2013-14

Source: hXps://starkaaup.wordpress.com/ssc-salary-index-fy/
Job$Title

FY$2013014

President

$225,000$

Director$of$Academic$Outreach

$111,077$

VP$of$Business$&$Finance

$180,080$

Executive$Director,$Advacement$&$Foundation

$110,157$

VP$for$Enrollment$Mgmt,$Student$Serv$&$Admin

$173,923$

Dean$of$Education,$Liberal$Arts,$&$Math

$109,809$

VP$&$Special$Asst$to$Provost

$164,304$

Sr$Dir$Strategic$Grant$Develop

$109,251$

Provost$&$Chief$Acad$Officer

$155,486$

Dir$Physical$Plant$&$Construct

$108,617$

Dean$of$Bus$&$Entrepren$Studie

$129,013$

Dir$of$Continuing$Education

$107,415$

Dean$of$Student$Services

$126,952$

Dept$Chair$III$$Assoc$Prof

$107,315$

Comptroller

$124,655$

Dean$Advising&StudEngagement

$106,524$

Director$of$Budget

$123,115$

Dean$of$Health$&$Human$Service

$106,000$

Temp$Dept$Chair$II0Assoc$Prof

$117,579$

Director$of$Human$Resources

$105,506$

Dean$of$Financial$Aid&Registra

$113,233$

Dean$Engr,$Indust$&$Emerg$Tech

$104,800$

Director$of$Computer$Services

$111,126$

Dean$of$Sciences

$103,615$

Dir$of$Marketing/Communication

$102,973$

Total$Pay$of$Top$25
Average
Median

Job$Title

FY$2013014

$3,137,525
$125,501
$111,077

96

Conclusions
The Financial Condi&on
of the State of Ohio

Financial Condi&on
of SSC

Priori&es of the
Administra&on

The State has a high bond ra&ng,

though the appropria&on for
higher educa&on is at

Extremely strong
Excellent cash ows
Strong reserves
Small amount of debt

Instruc&onal costs are declining as a

share of total expenses
The large increase in enrollment has
not been matched with faculty hiring
Administra&ve salaries are high and
increasing; instruc&onal salaries are a
declining share of total expenses

97