REGENTS REPORT

South Dakota Higher Education: Good Investment. Great Future. NO. 58, 12/20/96

Foundation for the Future

Fiscal Year 1998 Budget Request

The Board of Regents commends Governor Janklow for his Fiscal Year 1998 budget request as a realistic request that recognizes priorities for public higher education to bring South Dakota into the new century. Governor Janklow has underscored the importance of technology in his budget request authorizing nearly $1 million for technology infrastructure across the university system. Following is a closer look at the Regents' and the Governor's budget requests.

REGENTS' BUDGET-REQUESTED INCREASES

The Board requested a total increase of $2.98 million, or a 2.8% base increase, over its FY97 base. The FY98 request is the smallest requested increase in over a decade, reflecting the Regents' understanding of the fiscal realities facing South Dakota. The request also recognizes real system needs such as human resources, facilities, and technology.

System Requested Increases General Funds: FY94-FY98

SOURCE: Board of Regents
HIGHER EDUCATION IN THE BUDGET REQUESTS

The Board of Regents requested an increase of $2,986,083 or a 2.8% base increase over FY97. Of this request, the Governor is recommending funding $1,159,677, or a 1.1% base increase. In addition, Governor Janklow is recommending items that apply to all state agencies. The total FY98 base increase in the Governor's request represents a 4.3% increase over FY97 which includes items not represented in the Board's request such as salary policy, CSA midpoint, health insurance, and PEPL/Auto Fleet. These items apply to all state agencies and are not included in any agency's budget request.

INSTRUCTIONAL FORMULA FUNDING

The formula provides instructional resources to meet student demands and is based on actual student enrollments. The Regents requested a $757,491 increase for funding the formula which has not been fully funded since FY94. The Governor has requested a $757,491 increase in funding to fully fund the instructional formula.

FACILITIES INFRASTRUCTURE/MAINTENANCE AND REPAIR

For FY98 the Regents requested $254,604 to meet maintenance needs at the special schools and Agricultural Experiment Station. The M&R fund for these facilities was zero funded by the 1996 Legislature. The Governor did not identify this is as a need in his budget request, but some facilities are on the state's M&R list slated for repair.

HUMAN RESOURCES INFRASTRUCTURE

Investment in human resources is essential to maintain quality and the Regents requested $966,931 for salary equity. The FY98 request links faculty and exempt employees to market values in a similar fashion as CSA employees. Salary policy and CSA midpoint are not included in agency budget requests. The Governor called for a $2.6 million increase in his budget request to help cover salary policy which includes a 3% salary increase for Regental employees. In addition, just under $292,978 is identified for CSA midpoint. The Governor did not identify any funds for salary equity for faculty and CSA exempt employees.

TECHNOLOGY INFRASTRUCTURE

The universities will invest about $8 million over the next four years in technology. Much of this money is a direct result of the Reinvestment Through Efficiencies Program. A partnership is sought with the state in this area and the Regents requested roughly $1 million for FY98. This is the first year of a three year request totaling $3 million. The Governor recognizes the emphasis on technology as important for the future of South Dakota. In his budget request, the Governor authorized $892,540 for technology.

CONCLUSION

The Board of Regents has presented a realistic budget that identifies needed investments for the university system within the state's fiscal realities. This year's request marks the lowest requested increase in over a decade. The Board appreciates the Governor's recognition of higher education as a priority in South Dakota and is looking forward to working with the state's policy makers in the coming months.