Item #5
June 9-10, 2016
Page 10 of 45

FY 2017 Budget Overview
The guiding principles codified in the University Charter are the fabric
that unites all of the strategies, goals and plans for Arizona State University. Accordingly, the FY 2017 budget supports the continually accelerating trajectory of the institution, enables progress toward the
goals set by ABOR through the strategic planning process, and moves
the institution forward in improving economic outcomes for Arizona’s
citizens.
Financial planning has been based on tenets that are clearly established and supported by our goals:

ASU Charter
ASU is a comprehensive public research
university, measured not by whom it
excludes, but by whom it includes and
how they succeed; advancing research
and discovery of public value; and
assuming fundamental responsibility for
the economic, social, cultural and overall
health of the communities it serves.



access for all Arizona residents qualified to attend ASU;



world-class instructional opportunities for students;



support for student engagement, success and degree attainment; and



growth in research productivity.

The budget reflects increased public investment from the State of Arizona to support resident student
enrollment, moderate tuition rates for resident students coupled with financial aid to ensure access, and
market-based tuition rates for nonresident and online programs, as well as increased research emphasis.
ASU continues to advance innovative learning technologies, leverage opportunities for improvement
through partnerships and alliances, and identify strategies to exploit new trends and pathways. For example, the PLuS Alliance among ASU, King’s College and University of New South Wales seeks to expand
ASU online programs into international markets, with emphasis on targeting underserved markets. Similarly, our partnership with the University Innovation Alliance provides a mechanism for large, complex
institutions to share best practices in supporting and advancing student success.
FY 2016 was a successful year for ASU, with strong
national accolades. Among the recognitions were
the choice of ASU to lead the White House STEM
outreach program, selection by NASA to lead the
next lunar mission, award of a second NSF Engineering Research Center, and development of the
first white laser, a significant scientific breakthrough. In December 2015, Arizona State University was named the Most Innovative School by U.S.
News and World Report, in recognition of the creative and state-of-the-art approach we employ in
all facets of our activity. At the same time, ASU
was posting its highest-ever freshman retention and six-year graduation rates.
The FY 2017 budget is structured to enhance and accelerate ASU’s achievements across the spectrum of
goals as established by the Board of Regents.

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June 9-10, 2016
Page 11 of 45

FY 2017 Budget: A Closer
Look
FY 2017 Budget Highlights
($ millions)

FY 2017 Budget

FY 2016 Budget

Change ($)

Change (%)

Revenue

$ 2,403.4

$ 2,251.9

$ 151.5

6.7%

Expense

2,326.3

2,173.3

153.0

7.0%

Increase in Net Position

$ 77.1

$ 78.6

($1.5)

(1.9%)

Revenues
With the decline in public investment over the past decade, tuition and fees have become the largest
revenue source for ASU, with parent and student investors now providing more than 50 percent of the
university’s revenue. ASU’s reputation and quality continue to attract students from across the state,
nation, and world. The university anticipates overall FTE enrollment growth of 6.3 percent in FY 2017.
Immersion FTE enrollment is expected to increase by 2.8 percent, with modest resident enrollment
growth and continued strong nonresident and international student growth. Enrollment in online programs is projected to grow by 25.3 percent. The success of the Starbucks College Achievement Program, in conjunction with continued new offerings and recognition of the online programs, is driving
the increase, with the largest growth in undergraduate programs.
The financial aid strategy employed by the university is unchanged. ASU will continue to focus the majority of merit-based financial aid on Arizona resident students. The Regents Set Aside will continue to
support students with documented need, including a particular emphasis on talented first-generation
students who come from low-income backgrounds. The overall allocation of financial aid has not
changed relative to gross tuition revenue. Tuition revenue, net of scholarship allowance, is estimated
to increase by $104.4 million or 8.9 percent, reflecting strong enrollment growth combined with the
modest tuition rate increases approved by the Board of Regents in April 2016. The enrollment projections and tuition revenue included in the FY 2017 budget are consistent with the materials presented in
April in support of the tuition rate discussion.
ASU is grateful that the State of Arizona adopted an FY 2017 funding plan consistent with ABOR’s recommended formula that focuses on public investment in Arizona resident students. The budget reflects the funding from this formula along with other changes, resulting in an FY 2017 increase of $13.2
million, of which $3.0 million is dedicated to the School of Civic and Economic Thought and Leadership.
Other significant changes in budgeted revenue include an increase in sponsored projects revenue of
$10 million (3.3 percent), increased gifts of $9.4 million, largely related to the reinvention of Sun Devil
Stadium, and an increase of $10.5 million (7.3 percent) in auxiliary revenues, largely the result of a
strong room and board revenue growth trend in FY 2016 that is expected to continue into FY 2017.
Other revenues are anticipated to be $2 million lower than last year’s budget, largely due to the timing
of Executive Education program revenues.

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June 9-10, 2016
Page 12 of 45

FY 2017 Budget:
Expenses and Net Result
Expenses
The major focus of investments in FY 2017 continues to be student success, new learning modalities,
and instructional excellence. The majority of new investment will be in salaries and wages, which are
anticipated to increase by 8.0 percent next year, reflecting support for increased enrollment through
instruction and student support, as well as a modest salary increase pool. This year, the recruitment of
highly talented faculty is a key focus, as reflected in the recent recruitment of two Nobel Laureates,
doubling the number of faculty with this distinction. Dr. Sidney Altman, who shared the Nobel Prize in
Chemistry in 1989, will be joining the School of Life Sciences, and Dr. Frank Wilczek, who shared the
Nobel Prize in Physics in 2004, will join the physics department. Their appointments will enhance not
only student learning opportunities, but also bring new research opportunities to the university.

ASU also plans a series of investments in EdPlus, which includes online programs; learning technologies
development and deployment; and Global Launch, the platform for providing Pathway Programs and
specialty short-duration programs for international students. EdPlus touches every aspect of the
teaching and learning environment, through the development and deployment of learning technologies, the establishment of new online programs, the offering of hybrid courses to immersion students
utilizing the online learning platform, and preparation of international students for degree programs
through intensive English education.

Net Result
ASU is proposing a balanced budget on a cash basis, which results in a projected increase in net assets
of $77.1 million at June 30, 2017. An increase in cash on hand is anticipated due to the repayment of
the rollover in FY 2016, with average days cash on hand projected to be at 151 days by June 30, 2017.

The table on the following page provides the detailed operating budget.

 Item #5
June 9-10, 2016
Page 13 of 45

FY 2017 Strategic Investments
Incremental Strategic Investments
ASU’s strategic investments are consistent with those outlined for the Board of Regents in its FY 2017 tuition recommendations. Focus remains on student success, supporting enrollment growth and degree
attainment, and research advancement.

ASU plans to invest $51.6 million in financial aid. This includes $12.3 million in Regents Set Aside from
tuition, $4.0 million in Set Aside on differential tuition and program fees, and $35.3 million in institutional
aid. This investment maintains the level of financial aid relative to tuition, and helps to ensure access and
increased degree attainment for Arizona residents.

Enrollment growth-related investments will increase by $29.7 million. $10.2 million of this total will be
used to support immersion student enrollment growth, and the remainder to support online program
partnership costs, instructional support in the colleges, and further development of online courses.

ASU anticipates incremental revenue from program fees of $7.4 million, and those funds will be directly
invested in the colleges and schools generating those revenues and used in accordance with the plans for
those fees as approved by the Board of Regents.

Faculty hiring and academic support play a large role in key investments for FY 2017. Planned investments in this category total $36.6 million, and include $25.1 million for faculty hiring, progression, and
startup. This funding commitment is central to continuing to attract both highly-recognized senior faculty
such as the two recently-recruited Nobel Prize winners, as well as junior faculty who are on an upward
trajectory and can add significant instructional support to ASU. $8.5 million is included in support for colleges and schools and EdPlus. The $3.0 million State investment in the School of Civic and Economic
Thought and Leadership is included in this category.

ASU has budgeted $16.5 million for a modest, merit-based salary program to be effective on January 1,
2017. This investment is critical to retaining top-notch faculty and staff and encouraging the level of performance necessary to achieve university goals.

Facility operating costs are expected to increase by $4.6 million in FY 2017. The largest driver of the increase in cost is anticipated to be from the opening of the Arizona Center for Law and Society building in
August 2016. Other increases are anticipated from utility costs given the growth in student population,
and general increases in building operations and maintenance costs.

 Item #5
June 9-10, 2016
Page 14 of 45

FY 2017 Strategic Investments

Incremental Strategic Investments (continued)
Technology investments are budgeted to increase by $4.6 million, including funding for a content repository and continued support for the financial management system implementation.

The FY 2017 budget includes a modest investment in support services, including funding for additional
student support and general administrative costs.

An investment of $3.3 million is planned in support of hiring of faculty and staff for a collaborative neuroscience program to advance new educational and research focuses.

In order to meet the need for these investments, ASU has identified $24.6 million in prior investments
that will be reallocated to support the FY 2017 budget. These include a reduction in required debt service payments as several current bond issues expire, savings from debt refunding, reductions in health
care costs related to the reduced rates charged by the State, and elimination of funding for activities
that were temporary or are no longer required.

 Item #5
June 9-10, 2016
Page 15 of 45

FY 2017

ANNUAL BUDGET
FY 2017 ANNUAL BUDGET
FY 2017
BUDGET

FY 2016
BUDGET

VARIANCE BETWEEN FY 2016 AND
FY 2017 BUDGET
$
%

Revenues
State General Fund Appropriation

$ 296.9

$ 283.7

$ 13.2

4.7%

State Appropriation - Research Infrastructure

11.2

11.4

(0.2)

(1.8%)

Tuition and Fees

1,594.3

1,455.5

138.8

9.5%

less Scholarship Allowance

(310.8)

(276.4)

(34.4)

12.4%

Net Tuition and Fees

1,283.5

1,179.1

104.4

8.9%

Grants & Contracts - Research

310.0

300.0

10.0

3.3%

Financial Aid Grants (Primarily Federal Pell Grants)

124.4

118.9

5.5

4.6%

Private Gifts

81.9

72.5

9.4

13.0%

Technology & Research Initiative Fund (TRIF)

27.9

27.2

0.7

2.6%

Auxiliary Revenue

155.0

144.5

10.5

7.3%

Other Revenues

112.6

114.6

(2.0)

(1.7%)

Total Revenues

$ 2,403.4

$ 2,251.9

$ 151.5

6.7%

Salaries & Wages

937.5

867.9

69.6

8.0%

Expenses

Benefits

315.2

293.7

21.5

7.3%

All Other Operating
Scholarships & Fellowships, Net of Scholarship Allowance

691.4
190.9

654.2
182.3

37.2
8.6

5.7%
4.7%

Depreciation

120.0

113.0

7.0

6.2%

Interest on Indebtedness
Total Expenses

71.3
$ 2,326.3

62.2
$ 2,173.3

9.1
$ 153.0

14.6%
7.0%

Net Increase

$ 77.1

$ 78.6

$ (1.5)

(1.9%)

MONTHLY DAYS CASH ON HAND
Monthly days cash on hand is projected to
be 151 days at June 30, 2017.

 Item #5
June 9-10, 2016
Page 16 of 45

FY 2017

ANNUAL BUDGET
INCREMENTAL ALLOCATION OF GENERAL PURPOSE FUNDS ($ millions)
FY 2016 Base Budget

$

1,781.6

Changes in Incremental Funding
Public Investment (General Fund Appropriation)

13.2
120.4

Revenues from Tuition and Fees - Incremental FY 2016 Budgeted Tuition and Fees

$ 133.6

Net Change in Resources

Strategic Metric Addressed
Student Educational
Success & Learning

Educational

Discover New
Knowledge

e.g., Bachelors degrees
e.g., Fr retention, ene.g., Research and
awarded, grad degrees,
rollment, grad rates,
development, licenses
E&G, certifications and
etc.
& options, inventions
credentials

Allocation of Incremental Resources

Impact Arizona

e.g., Public service,
degrees in high demand fields, etc

Note which metrics addressed in each quadrant for each line item

Financial Aid

51.6

X

X

X

Enrollment Growth - Related Expenses

29.7

X

X

X

7.4

X

X

X

Investment in Faculty Hiring and Academic Support

36.6

X

X

Salary Merit Program

X

Investment in Programs Supported By Fees

16.5

X

Facility Operating Costs

4.6

X

X

Technology Investments

4.6

X

X

Support Services Investments

3.9

X

X

Investments in Research Support

3.3
(24.6)

Departmental Reallocations/Strategic Reinvestments

Net Change in College and Administrative Budget Allocations
FY 2017 Base Budget

X
X

X

X
X

X

X

$ 133.6
$

X

1,915.2

General Purpose Funds include state general and TRIF funds, tuition and fees, investment income, and facilities and administration revenue (indirect cost recovery). Excludes Restricted and Auxiliary Funds.

X

 Item #5
June 9-10, 2016
Page 17 of 45

FY 2017

ANNUAL BUDGET
STATE EXPENDITURE AUTHORITY BY APPROPRIATION CAMPUS ($ thousands)

TEMPE/DPC
University Revenues
Resident Tuition
Non Resident Tuition
Program Fees
Other Student Fees
Miscellaneous Revenues
Total University Revenues

POLYTECHNIC

WEST

$ 385,121.1
673,498.7
65,177.1
10,905.2
5,069.1
1,139,771.2

$ 34,879.1
46,054.4

$ 35,982.4
52,294.1

258.1
81,191.6

448.9
88,725.4

University Revenues Retained for Local Uses
Support for Local Operating Budgets
Regents Financial Aid Set Aside
Other Financial Aid
Plant Funds
Debt Service/COPS/Lease Purchase
Total Retained for Local Uses

204,339.6
113,488.3
165,650.6
19,000.0
44,166.6
546,645.1

18,952.1
9,598.1
10,338.1

20,478.5
10,600.5
12,455.9
1,000.0

38,888.3

University Revenues Remitted to State (State Collections)

593,126.1
256,011.1
$ 849,137.2

Plus: Public Investment
Total State Expenditure Authority

FY 2017 BUDGET

FY 2016 BUDGET

CHANGE

$ 455,982.6
771,847.2
65,177.1
10,905.2
5,776.1
1,309,688.2

$ 450,031.5
663,167.8
52,583.6
8,876.2
5,510.6
1,180,169.7

$ 5,951.1
108,679.4
12,593.5
2,029.0
265.5
129,518.5

44,534.9

243,770.2
133,686.9
188,444.6
20,000.0
44,166.6
630,068.3

203,236.8
121,405.3
149,123.4
20,000.0
55,219.0
548,984.5

40,533.4
12,281.6
39,321.2
0.0
(11,052.4)
81,083.8

42,303.3

44,190.5

679,619.9

631,185.2

48,434.7

24,688.7

31,014.0

311,713.8

296,411.2

15,302.6

$ 66,992.0

$ 75,204.5

$ 991,333.7

$ 927,596.4

$ 63,737.3

Prior to the start of a fiscal year, ABOR approves the State Expenditure Authority as required statutorily, distributed by enacted legislative
appropriation. State Expenditure Authority is equal to the sum of the state general fund appropriation, appropriated tuition and fees, and
other revenues as approved by the Board. University revenues retained for local uses are detailed on the following three pages.

 Item #5
June 9-10, 2016
Page 18 of 45

FY 2017

ANNUAL BUDGET
LOCAL COLLECTIONS
TEMPE/DPC

POLYTECHNIC

WEST

ASU TOTAL

FY 2016
BUDGET

CHANGE

LOCAL COLLECTIONS FROM TUITION AND FEES
OPERATING FUNDS FROM TUITION AND FEES
DESIGNATED
Academic Affairs
AECP - International Teaching Assistants
Associated Students - ASU
Campus Environment Team
Career Services
Child and Family Services
Commencement
Constituent Advocacy
Dining Services Management
Distance Learning Technology
EdPlus at ASU Investments
Education Learning and Accountability Fund
Environmental Health & Safety
Federal Direct Loan Administration

$ 87,500
859,100

$ 8,000
78,200

62,700

48,900
5,700

5,200
10,000
98,300
4,800

$

5,200
105,500
1,035,600

$

5,200
105,500
1,035,600

-

970,200
129,720,900

11,000
38,000
88,300
16,125,100

111,000
18,295,800

4,800
48,900
75,600
15,000
150,000
38,000
1,169,500
164,141,800

182,200
144,000

16,100
13,100

21,300
16,500

219,600
173,600

4,800
48,900
75,600
15,000
150,000
38,000
1,169,500
133,374,400
445,900
219,600
173,600

60,000

307,900
60,000

307,900
60,000

-

605,900
106,100
439,400
3,000
174,000

605,900
106,100
439,400
3,000
174,000

-

35,700
22,000
6,500
376,100
41,153,900
141,900

35,700
22,000
6,500
376,100
33,469,600
141,900

124,500

Fine Arts Activities
Fine Arts Program

307,900

Fine Arts Theatres
Forensics
Graduate Support Program
Honors College
Intercampus Shuttle Services

605,900
106,100
371,800

16,200

138,000

36,000

Interpreters Theatre
KASC Radio
Learning Communities
Library Support
Local Support for Academic/Administrative Units
Mona Plummer Aquatic Complex

$

7,200
15,000
14,500

51,400
3,000

35,700
22,000
312,000
41,153,900
141,900

6,500
28,400

35,700

30,767,400
(445,900)
-

7,684,300
-

 Item #5
June 9-10, 2016
Page 19 of 45

FY 2017

ANNUAL BUDGET
LOCAL COLLECTIONS (Cont.)
TEMPE/DPC

POLYTECHNIC

WEST

ASU TOTAL

2016
BUDGET

CHANGE

LOCAL COLLECTIONS FROM TUITION AND FEES
OPERATING FUNDS FROM TUITION AND FEES
DESIGNATED (cont’d)
Overseas Study Abroad Program Costs
Special Events
Student Affairs Initiatives
Student Counseling
Student Financial Assistance Administration
Student Forum
Student Government
Student Health Services
Student Organizations
Student Orientation and Forums
Student Recreation/Intramurals
Student Union/Activities
Summer Bridge Program
University Minority Cultural Program
University Sustainability Initiatives
Research Asst./Teaching Asst. Benefit Costs
Employee Benefit Adjustments/Contingencies
SUBTOTAL
AUXILIARY
Memorial Union
Recreation Sports
SUBTOTAL
OPERATING FUNDS SUBTOTAL

2,100,400
176,800
228,800
351,000

1,191,000
335,200
113,800
83,000
22,014,800
166,000
$ 202,107,100

1,129,200
827,100
$ 1,956,300
$ 204,063,400

170,600
20,800
5,000
31,900

225,000
21,000
10,600
1,050,800
558,700
5,300
7,300
311,000
14,600
$ 18,952,100

$ $ 18,952,100

211,800
20,000
26,200

7,100
9,700
563,800
19,400
$ 20,478,500

2,482,800
196,800
275,800
5,000
423,000
45,000
20,000
225,000
21,000
10,600
3,007,500
558,700
335,200
126,200
100,000
22,889,600
200,000
$ 241,537,700

2,482,800
196,800
275,800
5,000
423,000
45,000
20,000
225,000
21,000
10,600
3,007,500
558,700
335,200
126,200
100,000
20,362,000
200,000
$ 201,004,300

$ $ 20,478,500

1,129,200
827,100
$ 1,956,300
$243,494,000

1,129,200
827,100
$ 1,956,300
$ 202,960,600

40,100
45,000
20,000

765,700

2,527,600
$ 40,533,400

$ $ 40,533,400

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June 9-10, 2016
Page 20 of 45

FY 2017

ANNUAL BUDGET
LOCAL COLLECTIONS (Cont.)
TEMPE/DPC

POLYTECHNIC

WEST

FY 2016
BUDGET

ASU TOTAL

CHANGE

LOCAL COLLECTIONS FROM TUITION AND FEES
OPERATING FUNDS FROM TUITION AND FEES (cont.)

FINANCIAL AID
Regents Financial Aid Set Aside
Other Financial Aid - Institutional Financial Aid

113,488,300
149,093,100

9,598,100
10,215,900

10,600,500
12,022,800

133,686,900
171,331,800

121,405,300
136,004,400

12,281,600
35,327,400

Other Financial Aid - CRESMET/CONACYT/NEEP

308,200

28,000

Teach for America Scholarships
Other Financial Aid - Graduate Scholars Program
Graduate Fellowship Program
CONACYT Fellowship Program
Other Fin. Aid - School of Engineering Program
SUBTOTAL

507,600
1,522,700
122,500
1,760,000
$ 266,802,400

22,200
66,600
5,400

35,200
100,000
70,200
210,700
17,000

$ 19,936,200

$ 23,056,400

371,400
100,000
600,000
1,800,000
144,900
1,760,000
309,795,000

371,400
100,000
600,000
1,800,000
144,900
1,760,000
$ 262,186,000

$ 47,609,000

MINOR CAPITAL/FACILITIES MAINTENANCE PROJECTS
ENERGY MANAGEMENT CONTRACT
DEBT SERVICE
TOTAL LOCAL RETENTION FROM TUITION

19,000,000
8,010,200
36,156,400
$ 534,032,400

LOCAL COLLECTIONS FROM PROGRAM FEES
DESIGNATED
Local Support for Academic Units
FINANCIAL AID
Business Financial Aid Set Aside
Engineering Financial Aid Set Aside
Health Solutions Financial Aid Set Aside
Journalism Financial Aid Set Aside
Law Financial Aid Set Aside
Liberal Arts & Sciences Financial Aid Set Aside
Nursing Financial Aid Set Aside
Student Technology Fee Financial Aid Set Aside
TOTAL LOCAL RETENTION FROM PROGRAM FEES
TOTAL LOCAL COLLECTIONS

1,000,000

$ 38,888,300

$ 44,534,900

$

20,000,000
8,010,200
36,156,400
$ 617,455,600

20,000,000
7,992,200
18,000
47,226,800 (11,070,400)
$ 540,365,600 $ 77,090,000

276,200

276,200

276,200

2,444,600
2,041,700
1,089,600
186,300
2,982,000
933,300
805,100
1,853,900
$12,612,700

2,444,600
2,041,700
1,089,600
186,300
2,982,000
933,300
805,100
1,853,900
12,612,700

1,356,400
1,401,900
824,000
149,600
1,381,300
981,900
738,600
1,509,000
8,618,900

$ 546,645,100

$

-

$ 38,888,300

$

-

$ 44,534,900

$

$ 630,068,300

$

1,088,200
639,800
265,600
36,700
1,600,700
(48,600)
66,500
344,900
$ 3,993,800

$ 548,984,500 $ 81,083,800

 Item #5
June 9-10, 2016
Page 21 of 45

University Net Position
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-

1,336,617

Days of Cash on Hand

1,432,322
1,054,762

FY 2013

FY 2014

FY 2015

1,133,362

1,210,462

155
150
145
140
135
130
125
120
115

FY 2016
FY 2017
Spring Est. Initial Budget

17,000
16,000
15,000

16,277
15,591

151

FY 2016
Spring Est.

FY 2017
Initial Budget

134
129

127

FY 2013

E&G per FTE

150

FY 2014

FY 2015

Net Revenues as a Percent of Total Revenue
100%

16,107
15,132

14,785

89%

89%

89%

89%

FY 2013

FY 2014

FY 2015

FY 2016
Spring Est.

FY 2017
Initial Budget

80%

14,000

60%

13,000

40%

12,000

89%

20%

11,000

0%

10,000

FY 2013

FY 2014

FY 2015

FY 2016
Spring Est.

FY 2017
Initial Budget

The difference between total revenue and net revenue is scholarship allowance

Budgeted Revenue vs. Expenditures
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-

State Appropriations as a % of T&F and GF
30%
25%
20%
15%
10%

FY 2016
Spring Est.
Revenues

FY 2017
Initial Budget

Expenditures and Transfers Out

5%
0%

FY 2013

FY 2014

FY 2015

FY 2016
Spring Est.

FY 2017
Initial Budget