Committee on Appropriations A/V — 2018

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Roll00:00:54
Dr. Michael Rush, Executive Director and CEO, Board of Regents, introduced Board of Regents and made openings remarks.00:01:34
Bob Sutton, President, Board of Regents, made overview of higher education to the committee.00:03:06
Mr. Sutton said challenges for employers are from a lack of skilled workforce and emphasized the importance of the investment in higher education.00:03:59
Statistics show investing in higher education results in a $200,700,000,000 economic impact annually compared to a $200,000,000 state investment. Higher education employs 5,200 people and generate another 22,000 jobs across the state.00:05:06
The State of South Dakota invested $40,000,000 in research in the year 2000 and now invests $100,000,000. Federal funding generates 500 FTE in the regental system.00:05:37
Lack of a skilled workforce remains a challenge for employers. Not enough people are applying for work. There are .34 people seeking work for every job opening in Lincoln and Minnehaha counties. Mr. Sutton said a priority of the Board of Regents is to retain graduates and have them working in the State of South Dakota.00:06:31
Providing an affordable education is one of the four primary goals of the Board of Regents. The State of South Dakota invests less general funds per FTE in its regental system than any other surrounding states. South Dakota invests $27,000 per higher education graduate versus $33,000 in surrounding states. Remaining competitive with award need based scholarships is a challenge. Only $12 per Pell Eligible student receives state funding.00:09:45
Policy changes affect affordability. In the year 2013 the Board of Regents adopted a new lecturing policy and has saved the state $5,500,000 annually.00:10:11
Enrollment in the regental system has decreased because of the statewide labor shortage. It is important to get students through the regental system in a timely manner.00:11:18
Dakota Promise - Is a program to help students with the most need. There are 6,000 students that face an estimated $1,700 funding gap. 00:12:28
The Board of Regents send a proactive letter to students at the end of their junior year in high school that lets them know they will be accepted at in-state higher institutions and technical schools.00:13:25
The Board of Regents have encouraged students to complete their higher education in a timely manner. Taking 15 credit hours per semester will result in students completing 120 credits and graduating in four years.00:15:27
Dual Credit Enrollment - This high school program has saved students $700 for each dual credit course completed.00:16:25
Retention is 7% higher when high school students use the dual credit program. 00:17:47
Mr. Jeff Mehlhaff, Legislative Research Council, Fiscal Analyst, presented Board of Regents FY19 Budget as recommended by the Governor.00:20:42
FY19 Budget Request for the Board of Regents is $211,407,293 in general funds, $86,169,127 in federal fund expenditure authority, and $489,959,573 in other fund expenditure authority totaling $787,535,993 and includes 5,164.2 FTE. - Page 200:20:45
Board of Regents Central Office Budget Center - FY19 Budget Request is $19,483,423 in general funds, $574,447 in federal fund expenditure authority, and $48,043,218 in other fund expenditure authority totaling $68,101,088 and includes 70.3 FTE. - Page 500:20:59
A. Critical Deferred Maintenance Lease Payment - The agency requested a decrease of $4,188 in general funds related to deferred maintenance lease payment schedule. The Governor recommends this request. - Page 700:21:00
B. Fund Shift for Veterinary Slots - The Governor recommends an increase of $642,768 in general funds and a decrease of $652,000 in other funds related to the funding for veterinary students to attend Iowa State University. The funding is used to provide tuition assistance to South Dakota residents who are pursuing veterinary medicine. - Page 800:21:15
Representative Howard - question - how many South Dakota residents are in this veterinary program and what is the tuition00:22:40
Mr. Paul Turman, Board of Regents, responded 6 new students qualify for the scholarship program for this veterinary program. The scholarship is the difference between in-state tuition and out-of-state tuition. It amounts to approximately $24,000 per student per year to attend the Iowa State University veterinary program. 00:23:05
1. REED Network Technology Costs - The Governor recommends a decrease of $370,656 in general funds related to REED network technology costs. - Page 800:24:10
Monte Kramer, Board of Regents, indicated the Bureau of Information and Telecommunications renegotiated the REED Network contract with AT&T and the billing will decrease $370,656 and the money will revert to the general fund.00:24:28
2. Maintenance and Repair - The agency requested an increase of $1,826,040 in general funds and a decrease of $575,614 in other funds for maintenance and repair of campus facilities. The Governor recommends an increase of $796,691 in general funds and a decrease of $575,614 in other fund expenditure authority. - Page 800:24:55
Board of Regents - Maintenance and Repair Funding Percent by Source - FY10 - FY19 - Chart - Page 800:25:05
Board of Regents Maintenance and Repair Funding Percent by Source - FY10 to FY19 - Chart - Page 900:25:30
Dr. Rush commented South Dakota has taken responsibility to invest in Maintenance and Repair. The agency was cut in FY18 for maintenance and repair would like to see those level return to the 2% rate. Dr. Rush indicated private donors expect the state to take care of buildings.00:27:37
Representative Howard - question - what is the ideal amount of state HEFF funds that goes into Maintenance and Repair00:29:11
Representative Hunhoff - question - what is the 10-year plan for buildings in the regental system00:30:27
Senator Cronin - question - how do you determine which buildings are considered revenue generating and other buildings are not and gave Frost Arena at SDSU as an example00:32:26
Mr. Kramer explained there are academic buildings and other revenue generating buildings such as student unions, wellness centers, and all the residence facilities. The schools pay for cost, maintenance and repair, and operations for these buildings.00:33:50
Representative Howard - question - what is the difference between maintenance and repair classifications and who determines that revenues from ticket sales at athletic events don't go to maintenance and repairs00:34:29
Senator Tidemann - question - how and when was 2% of maintenance and repair rate decided and did that rate last one or two years before the recession during the Rounds Administration00:37:50
Course and Program Duplication with the Regental System and Duplicated Programs at Two, Three, Four, or Five Institutions Within the Regental System - Page 10 - Page 1200:38:34
Mr. Paul Turman, Board of Regents, indicated the Board of Regents reviewed duplicate programs at their August 2017 retreat and has a report they will forward to the committee. The Board of Regents monitor duplication closely.00:40:30
Mr. Turman said the Board of Regents review programs every two years that produce 5 graduates or less a year and reevaluate these programs. The institution has to justify why it wants to keep a program or collaborate with another school to maintain the program. Last year 40 areas were targeted. Ten of these programs are in teacher education and teacher programs usually receive a waiver. Over the past six years, 50 programs and 40 specialized programs have been eliminated.00:44:05
Representative Howard - question - why do you review programs that average 5 graduates per year and why do you pick that number00:45:45
Representative Hunhoff - question - are staff absorbed elsewhere when a program is eliminated00:47:07
Representative Hunhoff - question - after a new program has started, what is the time frame to evaluate whether that program is producing00:48:30
New and Terminated Programs - 2013-2017 - Table - Page 1200:50:45
General Funds per FTE Student - FY14 - FY18 - Chart - Page 1300:51:05
Research Pool Budget Center - FY19 Budget Request is $1,000,000 in general funds. - Page 1500:51:44
Representative Bartels - question - what are your performance indicators for this $1,000,000 research pool fund and said Mr. Nathan Lukkes, Assistant Vice President, Board of Regents, Division of Research & Economic Development distributed a handout 00:51:51
South Dakota Opportunity Scholarships - Budget Center - The FY19 Budget Request is $6,698,195 in general funds, $0 in federal fund authority, and $0 in other fund expenditure authority totaling $6,698,195 and includes 0.0 FTE - Page 1600:53:00
1. SD Opportunity Scholarship - The agency requested an increase of $614,038 in general funds for the increased need for the South Dakota Opportunity Scholarship. The Governor recommends this request. - Page 1700:53:05
Senator Peters - question - will the $30,000,000 Sanford Scholarship Fund be included in the Opportunity Scholarship Fund and will these funds be a part of a revenue request00:53:50
Senator Peters - question - will the funds be donated to the foundation of each regental institution00:54:43
President Barry Dunn, South Dakota State University, said South Dakota students will apply for Sanford Scholarships through the Horatio Alger Foundation.00:55:43
Senator Tidemann - question - will the Sanford Scholarships help students with high need and could others donate privately to Dakota Promise00:56:19
Representative Peterson - question - referring to Page 13 Budget Brief - why are the general funds per FTE student vary from institution to institution00:57:59
Representative Peterson - question - why is there a disparity in funding for FTE00:59:55
Representative Peterson - question - is there any nonfixed costs that can be managed to alleviate disparity by institution and General Funds per FTE Student01:00:15
Senator Tidemann - question - what was the five-point plan that originated in the Year 2000 and asked for a historical perspective01:05:09
Senator Tidemann - question - how many other states follow the five-point plan01:07:44
Senator Nesiba - question - what is the average FTE per student per institution and how does South Dakota compare to other states and requested additional information01:09:17
Senator Cronin - question - what is the general funds trend for higher education over the last 20 years, commented on financial burden on students, and requested additional information01:10:51
Representative Peterson - question - does South Dakota have tuition arrangement with surrounding states (reference to Attachment 8A) and requested additional information01:13:07
President Downs, President, Northern State University, introduced staff and gave an overview of the regental institution. Student retention is 78%, applications for admission have increased 17% from the year before, and student success is a priority. Eighty percent of their graduates reside in the State of South Dakota. 01:15:20
President Downs indicated the loss of the Perkins program will affect 250 students.01:21:30
Mr. Jeff Mehlhaff, Legislative Research Council, presented Northern State University, FY19 $14,685,886 in general funds, $1,979,854 in federal fund expenditure authority, and $24,670,817 in other fund expenditure authority totaling $41,335,557 and include 363.0 FTE.01:23:37
A. Utility Expense Inflation - The agency requested an increase of $46,416 in general funds for increased utility expenses. - The Governor recommends this request. - Page 5901:23:51
B. Remove Excess Authority - The agency requested a decrease of $500,000 in other funds to remove excess spending authority. The Governor recommends this request. - Page 5901:23:55
C. Shift Off-Campus Tuition Authority - The agency requested to shift $1,500,000 from the NSU Tuition and Fees informational budget. The requested increase in authority is to reflect the projected increase in tuition revenue and provide the authority necessary to spend carry over funds. The Governor recommends this request. - Page 5901:23:59
1. NSU Math Initiative - The agency requested an increase of $165,000 in general funds for a math initiative at NSU. The Governor did not recommend this request. - Page 5901:24:10
Representative Hunhoff - question - what is the Off-Campus Tuition Authority fund and do all universities use an online tuition account 01:24:34
NSU Data - NSU History of Fall FTE Students - FY06 to FY17 - Graph -Page 6101:26:12
Representative Howard - question - why is Northern building new residence halls when student enrollment is declining01:28:14
Representative Howard - question - what is the square footage of new residence hall01:31:15
Representative Lake - question - does the institution know where students are attending and what schools are your competitors01:31:50
Representative Hunhoff - question - do you have a yearly projection how many students you will recruit to meet your goal 01:32:45
Representative Hunhoff - question - what are you doing to emphasize student enrollment in math01:34:15
Representative Karr - question - what is your strategy to recruit students01:35:26
Representative Karr - question - what type of students are you recruiting01:36:31
NSU Fall On-Campus Headcount History - FY06 to FY17 - Graph - Page 6101:39:00
Representative Hunhoff - question - do online students affect statistics - referring to NSU Fall On-Campus Headcount History - Graph - Page 61 Budget Brief01:40:00
Representative Hunhoff - question - is there any statistics tracking online students transfers and what is their graduation rates01:40:30
NSU Undergraduate Degrees Awarded - Chart - FY12 to FY17 - Page 6201:41:50
NSU Retention of Students - Chart - Year 2005 to Year 2016 - Page 6201:42:20
NSU Remedial Student History - Graph - Year 2007 to Year 2016 - Page 6301:44:08
Representative Howard - question - why are the number of students needing english and math remediation increasing and does the institution work with secondary education to address the issue01:45:05
Senator Peters - question - does the Board of Regents have information which secondary institution sends students to higher education and which schools have lots of remedial students and requested additional information01:47:50
Representative Karr - question - have there been any dramatic changes in admission requirements which had an impact on enrollment01:49:30
Representative Peterson - question - what is a typical remedial class at Northern and what is the student-teacher ratio01:53:00
Senator Peters - question - are home school kids tracked by region or by county01:55:42
President Downs indicated NSU is retaining and graduating more students.01:58:04
Representative Karr - question - what students are not choosing Northern and are these students giving feedback and who is Northern State University's main competitor01:58:30
Representative Huhoff - requested an executive summary of the Online Learning Program02:00:14
Dr. Tom Jackson, President, Black Hills State University, introduced staff and gave institution overview. Freshman enrollment increased by 4% this year and graduate education has declined. Retention is 69% which is the highest in recent history. 02:01:15
Mr. Jeff Mehlhaff, Legislative Research Council, indicated Black Hills State University FY19 Budget Request is $9,675,662 in general funds, $4,277,167 in federal fund expenditure authority, and $34,274,011 in other fund expenditure authority totaling $48,226,840 and includes 418.5 FTE. - Page 6402:09:50
Board Approved Budget Adjustment - The agency increased research center authority relating to awarded grants and contracts by $296,029 in other fund authority and decreased federal funds by $1. The agency increased tuition and fee authority of $823,853 in other funds.02:09:55
A. Utility Expense Inflation - The agency requested an increase of $139,679 in general funds for increased utility expenses. The Governor recommends and increase of $122,679 for this request. - Page 6602:10:00
1. BHSU Math Initiative - The agency requested an increase of 2 FTE and $148,000 in general funds for a math initiative at BHSU. The Governor did not recommend this request. - Page 6702:10:05
2. Increased Student Fee Revenue - The agency requested and increase of $497,500 in other funds for expected increases in student fee revenues and an adjustment to housing and food service rates. The Governor recommends this request. - Page 6702:10:07
BHSU Data - BHSU History of Fall FTE Students - Year 2006 to Year 2017 - Graph - Page 6802:11:35
BHSU Fall On-Campus Headcount History - Year 2006 to Year 2017 - Graph - Page 6802:11:49
Representative Howard - question - how is the university doing to address declining enrollment02:12:15
Representative Howard - question - has the university closed dormitories since enrollment has declined02:14:22
BHSU Undergraduate Degrees Awarded - FY12 to FY17 - Chart - Page 6902:15:34
BHSU Retention of Students - Year 2005 to Year 2016 - Chart - Page 6902:15:58
BHSU Remedial State University - Year 2007 to Year 2016 - Graph - Page 7002:17:00
Senator White - question - what online classes are available at BHSU02:17:39
Senator White - question - do these online courses correspond with campus courses and are offered simultaneously 02:18:30
Representative Bartels - question - are students attending BHSU at the Rapid City campus included in statistics 02:19:14
Dr. Jose'-Marie Griffiths, President, Dakota State University, introduced staff and presented higher education overview. The university opened its first new academic building in 30 years, Beacom Institute of Technology. DSU received a $30,000,000 gift from Dennis Sanford and Miles and Lisa Beacom and these funds will be used to build MadLabs.02:21:40
Three areas of challenge are recruiting students, staff, and dealing with state of art technology demands. 02:28:49
Mr. Jeff Mehlhaff, Legislative Research Council, Fiscal Analyst, indicated FY19 Budget Request for Dakota State University is $9,743,253 in general funds, $2,987,556 in federal fund expenditure authority, and $28,502,103 in other funds expenditure authority totaling $41,232,912 and includes 291.8 FTE. - Page 7102:30:05
2. Research Grants and Contracts Increase - The agency requested 3 FTE and $1,025,000 increase in the research grants and contracts informational budget for the K-12 Data Center, Health Link Contracts, and Great Plains Foundation Award. The Governor recommends this request. - Page 7402:30:19
DSU Fall On-Campus Headcount History - Year 2006 to Year 2017 - Graph - Page 7502:31:14
DSU Data - DSU History of Fall FTE Students - Year 2006 to Year 2017 - Graph - Page 7502:31:21
Dr. Griffiths indicated on-campus housing is 94% occupancy rate and demand for housing is a concern.02:32:37
Senator Peters - question - is there a housing shortage in Madison02:33:25
Senator Peters - question - are in-state or out-of-state students going into the cyber security program and is it hard to retain graduates in South Dakota02:35:25
Senator Peters - question - what areas are growing at DSU, what is the strategic plan, and are students taking more online classes02:36:50
Dr. Griffiths stated 57% of cyber security graduates will leave the state for cyber security jobs 02:37:55
DSU Undergraduate Degrees Awarded - FY12 to FY17 - Chart - Page 7602:39:20
DSU Retention of Students - Year 2005 to Year 2016 - Chart - Page 7602:39:40
Senator White - question - why has DSU seen STEM growth and complimented staff02:40:25
Representative Carson - question - what are military student interests at DSU02:43:08
Dr. Griffiths responded that DSU has a memorandum of understanding with the Army and Airforce Junior College in many areas of cybersecurity. DSU is serving a specialized need for the military.02:45:00
Representative Carson - question - are these military students taking online courses02:45:39
Representative Bartels - complimented Dakota State University02:45:58
Dr. James M. Rankin, President, South Dakota School of Mines & Technology introduced staff and presented overview. Freshman entering School of Mines & Technology have an average of a 27 ACT score. The institution has a 98% placement rate and starting wages are $63,000. There are many internship opportunities through School of Mines partnerships.02:47:55
1. Math @ Mines Program - The agency requested and increase of $250,000 in general funds for the Math@Mines program. The Governor did not recommend this request. - Page 5102:50:07
Mr. Jeff Mehlhaff, Fiscal Analyst, Legislative Research Council, presented FY19 Budget Request as recommended by the Governor. FY19 Agency request is $16,785,332 in general funds, $15,223,169 in federal fund expenditure authority, and $41,241,842 in other fund expenditure authority totaling $73,250,343 and includes 433.4 FTE - Page 4802:51:33
A. Utility Expense Inflation - The agency requested an increase of $82,135 in general funds for increased utility expenses. The Governor recommends this request. - Page 5102:51:42
2. Increased Student Fee Revenue - The agency requested an increase of $2,000,000 in other funds for expected increases in student fee revenues. The Governor did recommend this request. - Page 5102:51:46
3. Training Program for Mining Industry Employees - The agency requested an increase of $500,000 in other funds for a new training program for mining industry employees. The Governor recommends this request. - Page 5102:52:36
Senator Peters - question - what has happened in the last two years at Math@Mines Program, emphasized it is not a remedial program, and requested additional information 02:53:16
Representative Howard - question - are there online free services to help students receive a refresher course02:58:19
Representative Lake - question - how did School of Mines Fund Math@Mines program last year and requested additional information02:59:40
Representative Bartels - question - will the School of Mines Fund Math@Mines in the future since the Governor did not recommend this request.03:00:30
4. Swapping Contracted for New Employees - The agency requested swapping contracted employees for new seasonal employees for the research grants and contracts informational budget. A $300,000 increase in personal services and a decrease of the same amount in contractual services. The Governor recommends this request. - Page 5103:01:45
SDSM&T - South Dakota School of Mines & Technology - History of Fall FTE Students - Graph - Year 2006 to Year 2017 - Page 5303:02:30
SDSM&T Fall On-Campus Headcount History - Year 2006 to Year 2017 - Graph - Page 53 03:03:02
SDSM&T Undergraduate Degrees Awarded - FY12 to FY17 - Chart - Page 5403:03:26
SDSM&T Retention of Students - Year 2005 to Year 2016 - Chart - Page 5403:04:00
SDSM&T Remedial Student History - Year 2007 to Year 2016 - Graph - Page 5503:04:45
Senator White - question - what is the most popular degree at School of Mines03:06:50
Senator Haverly - question - will there be research opportunities at the School of Mines & Technology03:06:55
Representative Ahlers - complimented School of Mines & Technology for their work03:08:14
Adjourn - Peters/Howard03:08:45