2020-21 Operating and Capital Budget Request

Page 2 of 24 2020/21 BUDGET REQUEST Executive Summary The State University of New York SUNY presents its 2020/21 budget request to the State of New York on behalf of its 29 State-operat

Page 1 of 24

STATE UNIVERSITY OF NEW YORK

2020/21 OPERATING AND CAPITAL

BUDGET REQUEST

Page 2 of 24

2020/21 BUDGET REQUEST Executive Summary

The State University of New York (SUNY) presents its 2020/21 budget request to the State of New York on behalf of its 29 State-operated Campuses, 30 Community Colleges, five Statutory Colleges, three Hospitals, a

Department of Energy National Laboratory, 90,000 staff, myriad programs, and over one million students1 these

institutions serve This request aligns with New York State’s priorities as outlined in the 2020/21 Budget Call Letter and represents a sound investment for the State given SUNY’s ongoing track record in being fiscally responsible and returning a verifiable value for the State; $8.17 returned for every one dollar invested by the State2

As SUNY approaches its 75 th anniversary in 2023, it is important both to commend the investment made by

the State of New York in public higher education, and to recognize the significant return on this important investment,

an impact that goes beyond financial:

• One-third of all New Yorkers with post-secondary education have graduated from the State

University of New York

• SUNY has been recognized nationally for its high ranking in the social mobility index: The SUNY Stony Brook campus is ranked #1 among all public universities 3 and 17 SUNY colleges and universities are in the top 10 percent of institutions in propelling students from poverty to prosperity 4

• Just one SUNY campus serves more low-income students than the entire Ivy League, all eight universities, combined

• On December 10, 2019, one of SUNY’s brightest lights, Binghamton University Distinguished Professor Dr M Stanley Whittingham, received the 2019 Nobel Prize in Chemistry, in Stockholm, along with colleagues Dr John Goodenough and Dr Akiro Yoshino

Dr Whittingham’s discovery and 31 years of technology development is one of the primary reasons we will be able to meet Governor Andrew Cuomo’s inspiring executive orders, and the Community and Climate Protection Act, and just possibly stave off catastrophic climate chaos Hence there is a special significance to this Prize at this

particular time

Recent years have seen these investments in higher education and SUNY continued and championed by

Governor Andrew Cuomo, most notably with the Excelsior Scholarship program ensuring – in partnership with the nearly $1.0 billion from the Tuition Assistance Program (TAP) - tuition free attendance for over 210,000 SUNY and CUNY students Additionally, the NY-SUNY 2020 Act enabled investment and improvement in academic programs and infrastructure for all students

As SUNY approaches 75 years, support in 2020/21 will build upon previous successful investments and will transform SUNY for the 21 st Century Additional support in 2020/21 will:

• Provide the highest quality 21 st Century education through a robust TAP program;

• Rejuvenate curriculum, 3,000 classrooms and 3,000 laboratories to ready students for jobs now and in the future in healthcare, information technology (IT), machine learning, data analytics, cyber security, advanced materials, renewable energy, and high-density battery storage; and

1 https://www.suny.edu/about/fast-facts/

2 2018 The Economic Impact of the State University of New York, Rockefeller Institute of Government

3 The Equality of Opportunity Project, “Top Colleges by Mobility Rate” Available at http://www.equality-of-opportunity.org/college/

4 2018 Social Mobility Index, Opportunity Through US Higher Education, CollegeNet, Inc, published 2018 Available at: https://www.socialmobilityindex.org/

Page 3 of 24

• Enable instructional innovation, building infrastructure for SUNY Online, providing the

broadest access in individualized learning for all students, traditional and non-traditional

Transformation is needed to position New York State as a leader in the emerging 21st Century economy, supported by SUNY As illustrated in the charts below, SUNY is compelled to evolve its curriculum and instruction to meet the shifting interests of students, to provide an education which is relevant in the 21st Century, to close the skills gap for employers, and to provide adult learners with access to needed education

Enrollments at SUNY in the past decade have grown in the more highly technical areas Curriculum is being developed to meet this growth and to integrate the liberal arts Additional support is required to make this

transformation

Job openings in New York between June to September 2019 in healthcare, data science, and business and/or economics were each at the 90,000 level.5 New York is seeing a higher number of adult learners, who are seeking higher education for job opportunities, and degree programs directly aligned to workforce maintenance, advancement, and higher compensation

5 Source: Job Postings Table, Emsi Q3 2019 Data Set, New York: October 2019

- Continue 2019/20 Enacted Budget support levels for all appropriated programs such as the Performance

Investment Fund, the Educational Opportunity Program, the Educational Opportunity Centers, ATTAIN, the Small Business Development Centers, and statutory college support; and work with SUNY during the

legislative process to find available avenues to ensure these exceptional and proven programs are properly funded to meet the needs of their respective missions and populations;

- Continuation of the much-needed update to the State funding model for Community Colleges, with additional investment through ensuring that each college receives the benefit of an enrollment increase at $3,047 per full-time equivalent (FTE) student6or 100 percent of the most recent year’s funding, whichever is higher;

- Providing, at no cost to the State, support for the second and final retroactive salary increase at State-operated institutions and hospitals through a second acceleration of Direct State Tax Support; and

- Allow for the three SUNY hospitals to reinvest in their operations by removing the requirement of repayment for capital improvements

These operating investments will need to be supported by a strong capital infrastructure To ensure this, SUNY

is requesting capital investment in our classrooms, labs, and other facilities as follows:

- Allow new capital construction facilitated by a 2:1 matching program with the State ($2.00 from the State matched with $1.00 from the Campuses);

- Support for Critical Maintenance and Energy Efficiency Needs;

- Capital investment in the three SUNY hospitals; and

6 Increasing Base Operating Aid per FTE by $100 from the Enacted $2,947

Page 5 of 24

- Maximizing local sponsor investment by matching those Community College projects that have received a local sponsor match

SUNY will seek to invest in its core needs and realize synergies with current and ongoing cost-saving

initiatives SUNY is committed to securing and providing the resources required to continue to deliver an

excellent and affordable public higher education that meets the needs of the 21 st Century, enabling student mobility from poverty to prosperity

Rest of Page Intentionally Left Blank -

Page 6 of 24

State University of New York (SUNY) 2020/21 Request Summary

Transforming SUNY for the 21 st Century - Keeping SUNY Affordable and Accessible While Maintaining Excellence and Relevance

• State-operated Campuses: Increase of net $25 million Core Support for Student Financial Aid, Curriculum Rejuvenation and Instructional Innovation

 These funds will both maintain the quality of a SUNY education and address the demands of students and the NYS workforce

 These funds will be matched by an additional $25.0M in offsets by SUNY and its campuses

• State-operated Campuses: Acceleration of $67.7 million (net zero impact to the State) to support the final round of one-time costs associated with the implementation of the much deserved United University Professions (UUP) salary agreement;

• Community Colleges: +$3.8 million (Academic Year basis from Budgeted levels) For a 100% Floor for Base Operating Aid:

 This proposal provides the SUNY Community Colleges with much needed stability and investment while also recognizing the

importance of enrollment in their operations by setting a steady funding “floor” of the higher of either 100 % of most recent funding levels or the level of funding provided by a an increase of $100 in the per student funding of $2,947 provided in 2019/20, whichever is greater;

• Hospitals: Allow the Hospitals to Reinvest in their Operations and Continued Support for Federal Reimbursement:

 SUNY requests that the State allow the Hospitals to both reinvest in their own operations and realize the full value of Federal

reimbursement for their operating losses in prior years

• All Other Parts of SUNY: Maintain 2019/20 Levels of Support

Capital Budget: Additional Support

• $200.0M 1-Year / $1,000.0M 5-Year: State Share of Capital Matching Program to Meet Strategic New Construction Needs

• $650.0M 1-Year / $3,250.0M 5-Year: State-operated and Statutory Campuses – Base Critical Maintenance

• $150.0M 1-Year / $ 750.0M 5-Year: Hospitals, including $50.0M for asset renewal, critical maintenance needs at Downstate

• $200.0M 1-Year / $ 600.0M 5-Year: Spending Authority Allowing for Campus Capital Matching Program and Other Needs (new capital)

• $ 75.0M 1-Year / $ 300.0M 5-Year: Self-Supported Residence Halls

• $ 60.5M 1-Year / $ 302.5M 5-Year: Community Colleges - State Match for 20 Community Colleges

Operating Budget Request Detailed Submission

The 2020/21 request utilizes the 2019/20 Enacted Budget as a base, respectfully requesting the State to continue

to invest in the levels of Direct Support for Operations, Programs, and Initiatives as was included in the final enacted budget In addition, SUNY continues to appreciate and value the State’s significant investment in the Indirect Costs of the SUNY System, including employee benefits and debt costs related to capital improvements

SUNY presents the following request for support that will ensure the success of the SUNY System for the 2020/21 academic year and beyond In addition, information is provided on the level of spending authority required by our State-operated campuses, teaching hospitals, and the Long Island State Veterans Home (LISVH) to utilize their own self-generated revenue

Information on SUNY’s 2020/21 Operating Budget Request is summarized in the table below for the entire SUNY system

Area

2019/20 Enacted State Budget

Core Spending Authority Need Associated with Keeping SUNY Affordable While Maintaining Excellence

2020/21 SUNY Budget as Requested State-operated Campuses $708.0 $25.0 7 $733.0

8 Academic Year Value on an approved Budget basis

9 Excludes Disproportionate Share (DSH) Reimbursement Match

10 Not shown as an increase, but instead would be the negation of the annual “sweep” of Hospital Operating dollars

Page 7 of 24

1 State-operated Campuses Specifics:

To transform SUNY, to maintain affordability and access, and to enhance the excellent level of education, SUNY seeks an increase in the direct core operating support for the State-operated campuses This increase will

be matched by leveraging relationships with philanthropic organizations, redirection of savings via SUNY’s cost

savings proposals or actions or other activities

This bold investment in SUNY operations will be additionally supported by continuing 2019/20 levels of Direct State Tax Revenue for all campuses and System Administration Additionally, SUNY requests that the State provide limited financial relief to the System by accelerating – at no cost to the State - $67.7 million in Direct State Tax

Support to handle the last installment of one-time and extraordinary costs related to the well-deserved UUP contract

Policy Related Actions are listed below:

• Continuation of Maintenance of Effort

o With only limited interruption since it’s 2011/12 Enactment, the “MOE” agreement between the State of New York and SUNY has stabilized the nation’s largest comprehensive public university system, enabling investment in student success, economic and intellectual development, and programmatic advancement

o SUNY requests the language passed in the 2017/18 Enacted Budget be continued and remain untouched, with the potential exception of extending the protections provided by this key legislation

to the annual investments made in our critically important programs such as the Educational Opportunity Program (EOP), Educational Opportunity Centers (EOCs), Statutory Colleges, and the Small Business Development Centers (SBDC)

Finally, Attachment A reflects (in both the Special Revenue Funds – Other section and the Fiduciary, Internal Service Funds section) the year-to-year spending authority needs of the State-operated campuses for dormitory

operations, fee supported activities, and other academic program needs

2 Community Colleges Specifics:

2020/21 State University of New York (SUNY) Community College Request: Direct State Tax Support 11

($M)

Area 2019/20 Enacted State Budget 12 Requests Associated with

Stability 2020/21 SUNY Budget As Requested

11 Please note that totals may not add due to rounding Appropriate re-appropriations not shown and are assumed to be continued

12 Figures shown on an Academic Year basis (September to August) as budgeted

13 Also known as Base Operating Aid

• Under SUNY’s 2020/21 proposal, this change would continue and be adjusted to allow each College to benefit from either 100 percent (versus 98 percent) of the prior year’s funding level or the increased funding provided by enrollment levels

supplemented by a $100/FTE increase to Base Operating Aid per student

3 State University of New York Teaching Hospitals, Long Island Veterans Home (LIVH), and Other

Healthcare Related Activity Specifics:

• $46.8 million (Negation of Annual Hospital Fund Sweep) for Investment in State-owned Health Care

Facilities

o SUNY's three teaching hospitals have, since 2000/01, operated under a slowly fracturing financial structure that relied on the hospitals themselves, the Federal government, and the State of New York

to effectively treat the people of the State

o Under hospital reform in the early 2000s, the three SUNY Teaching Hospitals were required to pay the costs of their own fringe benefits as well as reimburse the State for payment of debt service costs

on capital improvements In return, the State pledged to provide an “operating subsidy” (generated

by formula) that was intended to offset some of the costs the Teaching Hospitals incurred due to their State-related status

o This formula has not been followed in many years, and all direct support was eliminated in the 2018/19 Enacted State Budget15 While the hospitals have managed to continue operations, the lack

of sustained State investment in their day-to-day activities (both in terms of Direct State Tax Support and Capital support) have had an impact

o However, the benefit that the three teaching hospitals provide to the State, as well as their importance to healthcare, research, and the populations they serve are too great to devolve into recitations of issues of the past Instead, SUNY proposes that burgeoning discussions between SUNY, the Department of Health (DOH), and others continue to come to a mutual understanding of the services that the State expects from the hospitals (and how to pay for them) that will – hopefully – eliminate the ongoing cycle that has existed even prior to hospital reform

o Meanwhile, to support continued operations at the teaching hospitals and to incentivize needed investment in hospital infrastructures, SUNY is requesting that the State not sweep $46.8M in hospital operational cash, allowing these funds to be reinvested in the critical needs of the hospitals Attachment A (the Special Revenue Funds- Hospitals and other Healthcare Related Activities section) reflects requested year-to-year self-generated revenue spending authority for the three teaching hospitals, as well as for Long Island Veterans Home, for the 2020/21 academic year

14 If the State reverts to a purely “volume based” model as in prior years, the funding amount provided to the Colleges will be re-adjusted for the 2020/21 Academic Year Under current enrollment projections this new level of funding will be reduced, which would necessitate an approximate $24M investment

15 The State did, however, provide one-time support to the teaching hospitals through the facilitation of an operating grant from the Care Restructuring Enhancement Pilot (CREP)

Page 9 of 24

4 Other – Administration of the State’s Voluntary Defined Contribution (VDC) Program

While no new funding is requested, SUNY is proposing that the $0.5 million in Direct State Tax appropriated since 2016/17 be provided for workforce needs and travel related to SUNY’s administration of this program on behalf of the State Additionally SUNY will engage with the State on re-examining the program, the cost impacts and opportunity to grow and provide more savings for the State

Page 10 of 24

Capital Budget Request Detailed Submission

The Capital Budget Request enables the transformation of SUNY for the 21st Century Additionally, it aligns with New York State’s capital priorities outlined in the 2020/21 Budget Call Letter, which asks for submission of multi-year capital plans that give priority to projects that are shovel ready, environmentally sound, create jobs, improve infrastructure, and achieve a long-term return on the public’s investment SUNY’s multi-year capital request is based

on projects that meet each of these criteria

As discussed further below, SUNY campuses and the State University Construction Fund (the Fund) have advanced the design of numerous projects across most campuses that support the academic mission and are now

“shovel-ready.” Providing State-support to advance these projects to construction will create hundreds of construction and construction-related jobs and address the considerable deferred maintenance backlog of SUNY’s vast physical plant, which represents 40 percent of all State-owned building assets In addition, these projects will have a significant impact on improving upon previous progress that SUNY has made in advancing the State’s energy efficiency and carbon reduction goals SUNY has been a leader in advancing energy conservation through capital project designs as evidenced by the adoption of a resolution by the SUNY Board of Trustees requiring all new SUNY buildings to meet a LEED Silver standard in 2007, coupled with advancing designs that exceed energy code Most importantly, there is no better return on the State’s investment than investing in the buildings and infrastructure that supports the education of thousands of current and future New York residents who represent New York’s future workforce

It is important to consider that SUNY’s more than 2,900 buildings, covering 110 million gross square feet, have facilitated the education of millions of students and that the majority of these students remain in New York State after their education is complete These 3 million alumni give back to their colleges and communities in numerous ways and are essential to the advancement of the State’s economy The long-term return to New York State by investing in

SUNY has been, and can be, quantified in numerous ways, as highlighted in a 2018 Rockefeller Institute of

Government study, “The Economic Impact of the State University of New York”

SUNY is also supportive of continuation of the NYSUNY 2020 Challenge Grant Program, which has resulted

in many transformational capital projects across New York State

SUNY’s 2020/21 Capital Budget Request is further detailed in the following pages

Rest of Page Intentionally Left Blank -

Page 11 of 24

State-operated Campuses and Statutory Colleges

Educational Facilities

The Educational Facilities program, the largest of SUNY’s capital programs, supports the buildings and

infrastructure necessary to facilitate the academic enterprise at SUNY’s State-operated campuses and statutory

colleges The footprint comprises 1,850 academic buildings averaging about 50 years of age and spans nearly 63

million gross square feet It is vital to increase the planned $550 million investment for Educational Facilities by $300 million annually to ensure SUNY’s continued success and reputation as world-renowned institution, transformed for the 21st Century To ensure effective planning and continued execution, it is imperative that this additional support is provided through a predictable multi-year capital plan commitment, rather than a year-at-a-time approach

In recognition of the State’s capacity to accrue new debt obligations under the limitations of the Debt Reform Act of 2000, and to ensure that campuses have a financial stake in advancing large new projects, a Strategic Needs Capital Matching Program is proposed to leverage up to $200 million in additional State bonded support annually In general, the Matching Program would support new construction and/or major renovations of academic facilities at the State-operated campuses and statutory colleges The matching goal would be to achieve an overall program ratio of 1:2, every $1 of campus generated funds would leverage $2 of State support More information on this proposed program is provided in Attachment C

($M)

Annual Increase from 2019/20 Enacted Educational Facilities

• Base Critical Maintenance

• Strategic Needs – Matching Program (State

Share)

$ 650.0 200.0

$ 850.0

$3,250.0 1,000.0

$4,250.0

$100.0 200.0

$300.0 Hospitals

• Critical Maintenance & Strategic Needs

State Bonded Capital Requested

500.0

100.0 600.0

100.0

100.0 200.0 Residence Halls

Education Liberal Arts and Sciences, General Studies and Humanities

Health Professions and Related Clinical Sciences

Biological and Biomedical Sciences

Engineering Computer and Information Sciences and Support Services

Percent Change in Headcount Enrollment, by Program of Study Long Term vs Short Term Trends (2010-2018 vs 2014-2018)

Percent Change in Headcount Fall 2010-2018

Percent Change in Headcount Fall 2014-2018

As noted above, the State-operated campuses and statutory colleges, in partnership with the State University of New York, have engaged in a robust planning process that has produced multi-year capital plans on every campus that meet the criteria set forth in the 2020/21 Budget Call Letter, but that also address the facility needs to meet shifting student demands for programs that prepare them for the jobs of tomorrow

While SUNY’s total enrollment at the State-operated campuses and Statutory Colleges has been relatively stable over the past decade, the programs in which students are enrolling have changed considerably, with STEM-related programs showing significant increases as demonstrated in the chart above Also of note, enrollment in

programs that prepare students for a career in the trades (i.e., construction trades), which are comparatively smaller overall, have seen a steady relative increase in the past five years This requires that campus buildings evolve from teaching and learning in traditional classrooms and student support spaces to those that provide more specialized labs and collaborative learning environments that accommodate today’s student demand In the past 11 years, SUNY’s capital plan has invested approximately $3.3 billion in STEM-related construction

There are multiple projects at nearly every campus currently being designed that will renovate buildings that support the shifting programmatic demand These include the full renovations of science buildings at the University at Albany, Maritime College, Old Westbury, Binghamton and Delhi Other projects that support various programs,

including economics, business, communications and social sciences are also underway at SUNY Oneonta, SUNY Oswego, and Farmingdale State College, respectively

As part of managing a predictable, multi-year capital program, capital funds have been committed to advance the designs for the renovations of existing buildings, or for new construction where warranted, to support the

programmatic needs of the departments located in those facilities, while also significantly reducing the deferred

maintenance backlog This is done with the expectation that additional capital will be made available to fund and

advance construction As a result, the requested multi-year capital request is predicated on a number of projects that are

shovel-ready and meet the State’s priorities

Environmentally Sound SUNY has been a leader in advancing energy conservation through capital project

designs as evidenced by the adoption of a resolution by the SUNY Board of Trustees requiring all new SUNY