Financial Analysis and Collective Action for HBCU’s and Higher Education Institutions in Georgia Howard Bunsis Professor of Accounting, Eastern Michigan University Chair, AAUP Collective Bargaining Congress October 2016 1
Roadmap • How is the State doing financially? • Can we judge whether Georgia supports public higher education? • What Data should you ask for and acquire to become better informed about financial matters at your institution? • Examining State HBCUs, Compared to Other Institutions in GA o Financial Situation o Where the money comes from o How is the money spent? • Importance of HBCU’s • How Can We Act Collectively to make our institutions, state, and country better? 2
The State of Georgia How is the state doing financially? 3
State General Fund Tax Revenues, 2007 to 2017, in Billions Source: Georgia Department of Revenue 25 20 Other Taxes/Fees 15 Vehicle Tax/Fees 10 Corporate Tax Sales 5 Individual Income 0 4
Annual Percentage Changes in Total General Fund Taxes 12% 9.4% 10% 7.8% 8% 6.4% 5.9% 5.2% 4.8% 6% 3.6% 4% 2% 0% -2% -1.0% -4% -6% -8% -10% -9.1% -12% -10.5% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 to to to to to to to to to to 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 5
Comparison of GA Tax Rates with Bordering States Source: Tax Foundation, 2016 SC GA NC AL FL TN 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Income Sales Corporate Income tax is the highest personal income tax rate; FL has no state income • tax; TN has a tax on interest and dividends only Sales tax is the average state plus local rate • 6
State and National Unemployment Rates Source: Bureau of Labor Statistics Georgia National 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 7
Moody’s Bond Rating: Aaa on 7/15/2016 • Georgia's Aaa General Obligation rating reflects its robust economy -- which remains a regional outperformer - solid tax revenue trends, conservative fiscal management, and moderate debt and pension liabilities. • The outlook for Georgia is stable based on the state's conservative fiscal management, the current strong trends in revenue growth, and manageable long-term liabilities. • Georgia is the 8th-largest state, with a population of 10.2 million. It had a gross domestic product of $474.7 billion in 2014, which ranks 10th in the US, and per capita personal income of $40,551. • Georgia has had a AAA S&P bond rating every year since at least 2004 8
State S&P Bond Ratings, 2016 Source: Pew Charitable Trust, 6/6/2016 AAA AA+ AA AA- A+ A A- AK ID AL CA KY NJ IL DE MA AZ MI FL MN AR PA GA NM CO IN NY CT IA OH HI MD OK KS MO OR LA NE SC ME NC TN MS ND VT MT SD WA NV TX NH UT RI VA WV WY WI 9
Source: Grapevine 2016 Higher Education Appropriation Per Capita 100 200 300 400 500 600 700 800 0 Wyoming North Dakota Alaska New Mexico Hawaii Nebraska 2016 State Appropriaiton per Capita per Grapevine Illinois North Carolina Mississippi California Connecticut Arkansas Utah Alabama Maryland Georgia New York Minnesota Kansas GA Rank (of 50) US Average GA Iowa Texas Indiana Kentucky West Virginia Oklahoma South Dakota Wisconsin Louisiana Idaho Tennessee Washington Delaware Montana $270 $288 2015 New Jersey Virginia 16 Massachusetts Florida Maine South Carolina Oregon $278 $295 2016 Ohio 15 Nevada Michigan Missouri Rhode Island Colorado Vermont Pennsylvania Arizona New Hampshire 10
2015-16 In State Tuition and Fees by State Source: College Board $16,000 $15,000 Georiga $8,450 $14,000 $13,000 US Mean $9,410 $12,000 GA Rank 31 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 NH PA IL MI DE MN OH HI ME KY CA TN MD IN WI MO SD AR ND NE MS ID AK FL UT MT NM VT NJ SC VA MA CT RI AZ WA AL CO OR TX KS GA IA LA NY OK WV NC NV WY 11
2016 Appropriation and In-State Tuition for Georgia vs. Border States: Lower the appropriation, higher the tuition In-State Tuition Per Capita Appropriation $14,000 $500 $12,000 $400 $10,000 $300 $8,000 $6,000 $200 $4,000 $100 $2,000 $0 $0 NC AL GA TN FL SC Correlation between tuition and the appropriation for these 6 states = -0.37 • Correlation for all 50 states = -0.52 • 12
Source: US Census Bureau Bachelor’s Degree or Higher College Attainment: Percent of Adults With a 10% 15% 20% 25% 30% 35% 40% 45% 50% 0% 5% Massachusetts Colorado Maryland Connecticut New Jersey Virginia New Hampshire Vermont New York Minnesota Washington Illinois California Kansas Utah Hawaii Delaware Oregon U.S. Average: 28% Georgia: 29% Georgia rank: 23 rd highest Rhode Island Nebraska Maine Montana Georgia Pennsylvania North Carolina Wisconsin Alaska South Dakota Texas Iowa Arizona Missouri Michigan North Dakota Florida Ohio Wyoming New Mexico South Carolina Tennessee Idaho Indiana Oklahoma Alabama Nevada Louisiana Kentucky Arkansas Mississippi West Virginia 13
The State of Georgia • Is the state committed to public higher education? • Is the state committed to public HBCU’s in Georgia? 14
State Appropriation to all of the University System of Georgia (USG) in Billions Source: http://www.usg.edu/fiscal_affairs/financial_reporting 2.50 2.09 2.02 1.94 1.88 1.81 2.00 1.74 1.70 1.50 1.00 0.50 0.00 2011 2012 2013 2014 2015 2016 2017 15
Same Graph, Different Scale 2.20 2.09 2.10 2.02 2.00 1.94 1.88 1.90 1.81 1.80 1.74 1.70 1.70 1.60 2011 2012 2013 2014 2015 2016 2017 16
Annual Percentage Changes in Appropriation and Total State Tax Revenues % Change Appropriation % Change tax revenues 10% 8% 6% 4% 2% 0% -2% -4% -6% 2011 to 2012 to 2013 to 2014 to 2015 to 2016 to 2012 2013 2014 2015 2016 2017 17
2011 to 2017 Percentage Changes in State Appropriation to USG and State Tax Revenues 50% 41% 40% 30% 16% 20% 10% 0% % Change % Change tax Appropriation revenues 18
State Appropriation to USG as a Percentage of Total State Tax Revenue Source: http://www.usg.edu/fiscal_affairs/financial_reporting 16% 15% 14% 13% 12% 11% 10% 9% 8% 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 In Billions 1.81 1.70 1.74 1.88 1.94 2.02 2.09 USG Appropriation 15.31 16.05 17.00 17.88 19.03 20.81 21.56 Total Tax Revenues 11.8% 10.6% 10.3% 10.5% 10.2% 9.7% 9.7% % of Tax Revenues 19
Per Student Appropriation to the University System of Georgia (USG) Appropriaiton per Student $8,000 $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 $4,500 $4,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1.86 2.03 2.02 1.69 1.81 1.70 1.74 1.88 1.94 2.02 USG Appropriaiton in Billions 259,945 270,022 282,978 301,892 311,442 318,027 314,365 309,469 312,936 318,164 HC Enrollment USG $7,164 $7,536 $7,139 $5,608 $5,803 $5,351 $5,549 $6,077 $6,208 $6,338 Appropriaiton per Student 20 Source: http://www.usg.edu/research/enrollment_reports
Basic Setup of Higher Education Institutions in Georgia • University System of Georgia (USG) • Technical College System of Georgia (TCSG) • Independent Public Institution (GA Military) • Private Colleges and Universities • Where do HBCUs Fit in Georgia? o 3 are part of USG o 4 are private institutions 21
Institutions Analyzed HBCU Georgia Georgia Public Georgia Private HBCU Georgia Public Non HBCU non HBCU Private Savannah State Augusta Morehouse Emory Fort Valley State Clayton State Spelman Mercer Albany State Columbus State Clark Atlanta Wesleyan Georgia College Paine Agnes Scott Georgia Tech Georgia Perimeter Georgia State Young Harris Kennesaw State Savannah C Art & Design U of West Georgia Berry College Valdosta State Oglethorpe U of Georgia 22
Consolidations in the University of Georgia System Georgia State University August State University merges with merges with Georgia Perimeter College Georgia Health Sciences University and becomes and becomes Georgia State University Georgia Regents University In 2015, changes name to: Augusta University Kennesaw State University merges with Southern Polytechnic State University and becomes Kennesaw State University 23
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