Revised
      
M E M O R A N D U M

								December 17, 2012

TO:		Members of the Board of Trustees

FROM:	Nancy L. Zimpher, Chancellor

SUBJECT:	Resource Allocation Model


Action Requested

      By adoption of this resolution, the Board expresses its support for a new model used to allocate essential State operating support to the 29 State-operated campuses.
	
Resolution

	I recommend that the Board of Trustees adopt the following resolution:

Whereas in accordance with Education Law §355(4)(c), the Board of Trustees has authority to allocate annual State operating appropriations among the State-operated and statutory colleges and programs of the University; and

Whereas the current allocation methodology is outdated and no longer addresses the strategic needs or priorities of the State University; and 

Whereas the inconsistent application of reductions in State support endured by the University during the New York State fiscal crisis from 2008-09 to 2011-12 created allocations that did not address strategy, mission or enrollment changes; and

Whereas the limited State operating support available to the University must be maximized and allocated to meet instructional costs while acknowledging both SUNY’s unique composition and broad mission; and



Whereas a new model for allocating State operating support  will ensure SUNY can adapt and excel in the face of evolving educational and fiscal environments; and

Whereas the new rational and data driven model has been developed under guiding principles that emphasize responsiveness to the strategic goals of the University and of the campuses; acknowledge campus differences; and remain sensitive to  campus need and retention of tuition; and

Whereas the new model works in concert with the rational tuition and maintenance-of-effort provisions included in the NY-SUNY 2020 Challenge Grant Program Act to provide an opportunity for predictability and planning; now, therefore, be it

Resolved that the Board of Trustees expresses its support for the new resource allocation methodology, described in the document entitled “A New Model for Resource Allocation” (copy on file in the Office of the Secretary of the University), which will be implemented beginning for the academic year 2013-14 and will include a transition period of not less than five years.

Background

      Since its inception, the State University of New York has progressively adapted to changing funding levels and strategic priorities in terms of its allocation of essential State operating support. No fewer than five separate methodologies have been utilized, with each change corresponding to a paradigm shift in how SUNY and the State interact. Given recent alterations to SUNY’s operating structure following years of large reductions in State operating support, it is critical that SUNY develop a new resource allocation methodology. 

      The current method of allocating funds is no longer effective and has outgrown its usefulness; several major components are outdated, and distributions of State operating support reductions were not implemented consistently. This created allocations that did not address changes in strategy, mission or enrollment.
      
      
      
      

   Examples of this outdated approach to allocating resources include:

* Costs of instruction data were based on SUNY-centric direct instructional expenditures from 2003, and did not align with either the true cost of instruction or the difference in cost between sectors, 
o Overall costs in higher education have increased by 29 percent
o Low cost discipline types in the lower division area such as Business were valued at $1,706/FTE, versus $4,075/FTE in the new tool. 
* Of equal importance, funded enrollment was frozen at 2007-08 levels
o Enrollment has grown eight percent since 2007-08, (187,427 estimated annual average full-time equivalent students for 2011-2 versus 172,628 AAFTE funded in 2007-08) 
* Funding was provided for institutes and programs that no longer exist.

   The new data driven allocation model is designed to optimize the limited State operating support appropriated to the State University by embodying the following principles:
* responsiveness to strategic goals,
* acknowledgement of and sensitivity to campus differences,
* recognition of campus retention of tuition, and
* usefulness for long term planning. 

   With the adoption of these principles, SUNY will tie its limited State operating support not only to the actual cost of educating a student, but will firmly base allocation decisions on the priorities of the University at large, put an emphasis on important research investments, and work hand-in-hand with rational tuition to fully reflect the unique nature and needs of the largest comprehensive public university system in the country.  

Attachment
Board Resolution			-3-				December 17, 2012