Committee: Joint Appropriations
P
Sen. Frederick, Co-chair
P Rep. Richter, Co-chair
P Sen. Drake, Vice-chair
P Rep. Putnam, Vice-chair
P Rep. Burg
P Rep. Cerny
P Rep. Clark
E Rep. Derby
P Rep. Klaudt
P Rep. Pummel
P Rep. Sutton
P Rep. Wudel
P
Sen. Dennert
P
Sen. Duxbury
P
Sen. Lange
P
Sen. Benson
P
Sen. Bogue
P
Sen. Hainje
P
Sen. Kleven
P
Sen. Staggers
OTHERS PRESENT: See Original Minutes
The meeting was called to order by Chair Richter.
South Dakota Board of Regents
Mr. Mark Zickrick, LRC, presented the committee with budget information (Document #1).
Dr. James Hansen, President, South Dakota Board of Regents (BOR) provided an overview of the responsibilities and activities of the Board. He noted the Board recently replaced three university Presidents and one Superintendent, and he observed South Dakota ranks 51st nationally in faculty salaries. The Board is responsible for facility maintenance and repair. It manages the cost through the Higher Education Facilities Fund (HEFF), maintenance and repair (M&R) fees, M&R bonds, and other revenue sources. The Board is focusing on the integration of technology and on providing access to higher education for all South Dakota citizens.
Mr. Dave Gienapp, Regent, BOR, and Chairman, Budget and Finance Committee, BOR, presented
an overview of the structure and process of the committee. He noted a request for $450,057 to support
operating and maintenance needs, a targeted appropriation of $4,487,453 to address technology needs,
and an increase in funds for M&R.
Dr. Robert T. “Tad” Perry, Executive Director, BOR, presented an overview of the university
systems ( Documents #2 and #3). He noted having technical support provided by the Bureau of
Information and Telecommunications is working well for the BOR, and the billings to date have fallen
within the projected parameters. Dr. Perry reviewed the nine state policy goals. He noted the university
funding framework uses a base-plus approach, which provides some stability to the university and
allows for incentive funding.
Dr. Perry outlined the connection between higher education policy and university funding. Each
institution receives a base budget according to enrollment. If the institution remains within a 4% (+)
or (-) zone, there is no change to its base budget. An increase exceeding 4% means the institution will
receive marginal revenues. A decrease exceeding 4% results in the institution returning money to the
BOR. The movement of funds is conducted annually at the beginning of each fiscal year. The base
numbers come from current enrollment and a rolling average back several years. University base
budgets are divided into nine categories based on a national structure for higher education.
Incentive funding is divided into five categories tied to the nine policy goals. Each fund contains the
equivalent of 1% of the institution's budget. If the institution reaches 100% of its target for that
incentive category, it receives the incentive funds. If the target is not reached, the incentive funds
reverts to the system pool and the BOR decides how to expend them.
Senator Lange noted South Dakota has the fewest high school graduates going on to higher education
among all states. Senator Duxbury noted the 50% drop-out rate of students between freshman and
sophomore years. Dr. Perry explained each campus follows those numbers individually. Senator Lange
asked if there are disputes over whether targets are reached. Dr. Perry responded there are some
disputes over what the correct target should be but not over whether the target is reached. Dr. Perry
went on to review the Reinvestment Through Efficiencies Program.
Dr. Perry addressed the targeted appropriation request focusing on the attainment of technology goals.
The Board is working aggressively on integrating the use of technology on campus with respect to
building infrastructure, communications infrastructure, technology in the classrooms, personal
computers and printers, and human resources. The Board is short $6.9 million on base funding for
equipment, plus human resources. Dr. Perry noted that to reach target inventory under the Board's plan
will take 2.5 yrs; under the Governor's plan it will take 2.9 years. To replace target inventory under
the Board's plan will take 3.3 years; under the Governor's plan it will take 7.1 years.
Dr. Perry presented salary competitiveness figures. South Dakota trails other states in the region by 16.6%. The average public university faculty salary in South Dakota is $38,096. Average salary for
a professor is $55,791; for an associate professor, $44,817; for an assistant professor, $37,997; and for
an instructor, $30,245.
M&R projects, Year 2000 (Y2K) plans, and Human Resources programs were overviewed. Dr. Perry
pointed out growth of university staff has increased at a slower rate than growth in enrollment. The
projected increase in enrollment from FY89 to the completion of the Salary Competitiveness program
is expected to be 21.64%. The projected increase in all-funds university full-time employees (FTEs)
for the same time period is projected at 9.06%.
Dr. Perry reiterated the participation of the BOR in a national cost study. FTE students are defined as
students taking 30 credit hours per year for undergraduate status, and students taking 24 credit hours
for graduate status.
The academic issues highlighted by the Board include limiting duplication of academic programs and
placing an emphasis on different programs. The average credit-hour teaching load for South Dakota
university professors is higher than the national average although the cost of instruction per student in
the state is 10-12% below the national norm.
South Dakota State University
Dr. Peggy Elliott, President, South Dakota State University (SDSU), presented the committee with
budget information ( Document #4). Dr. Elliot introduced: Mr. Wes Tschetter, Director, Finance and
Budget; Dr. Mike Reger, Vice President, Administration; and Dr. Carol Peterson, Vice President,
Academic Affairs. Dr. Elliott noted 80% of SDSU general funds go directly to the support of teaching
and learning, 10% to the physical plant; 2.5 % to the Animal Disease Research and Diagnostic
Laboratory, and 7.5 % to other support. The university is approaching its 10-year re-accreditation.
Salary rates will be an issue for re-accreditation. The Salary Competitiveness program is very
important to the university, and as part of the Salary Competitiveness policy the institution eliminated
35 FTEs.
Dr. Elliott reviewed SDSU cash balances. She noted SDSU receives no interest on cash balances.
One-third of the cash balances are used annually, and student fees account for only 9% of the balances.
Agricultural services to the state require continuing balances to prevent interruption of service.
The faculty turnover rate for FY97 was 11.6%, including FTE reductions. In response to a question
from Senator Frederick, Dr. Peterson said the university does not offer a genetic engineering degree
since the institution has moved from specific degrees to more general ones. The agricultural
experiment stations are doing work with genetic engineering to the extent it is possible.
South Dakota School for the Blind and Visually Impaired
Ms. Marjorie Kaiser, Superintendent, South Dakota School for the Blind and Visually Impaired
(SDSBVI) introduced Mr. R. Lee Ginsbach, Business Manager. Ms. Kaiser noted Duel County is the
only county in South Dakota where no students are served by the school.
Ms. Kaiser reviewed M&R projects, noting the roofing project is complete. Ms. Kaiser highlighted
the endowment bill, which allows the school to take care of small maintenance projects. The past year
the school accessed $17,000 in endowment bill funds for repairs.
The Salary Competitiveness package has also been helpful. Currently there are 34 students on campus
ranging from preschool to high school. There is a 20-25% student turnover rate each year. Because
it receives state funds, SDSBVI cannot bill school district systems for services it provides to students.
South Dakota School for the Deaf
Mr. Jon Green, Superintendent, South Dakota School for the Deaf (SDSD) introduced Mr. William
Van Den Hemel, Business Manager. Mr. Green reviewed M&R projects. The school also put
between $75,000 and $80,000 of local funds toward M&R.
The Salary Competitiveness program has made a significant difference to the institution. Last year
Mr. Green dismissed all 14 residence hall staff last year and hired 11 new, well-qualified staff,
significantly improving the residence hall environment.
Mr. Green referenced technology, noting the school is wired, and the staff are linked to the Internet and
have use of e-mail. The school has established a database of all students and has two home pages on
the Internet. The grading system has been placed on an electronic interschool library system. The
residence hall is now wired for cable and the Internet. A major technology goal is developing distance
education programming.
The average faculty tenure is 21 years. The school should be able to recruit good new teachers through
the Salary Competitiveness program. The academic enrollment for the school includes 56 students on
campus, 93 students off campus, and 25 preschoolers.
Other Business
President Hansen, BOR, requested time to address an issue regarding the Regents. He introduced Ms.
Pat Lebrun, Regent, BOR. Ms. Lebrun presented the committee with background information
( Document #5). She refuted statements described in the information concerning remarks made at a
meeting between members of the South Dakota BOR, Board Staff, and members of the South Dakota
Student Federation. Ms. Lebrun expressed her concern with accurate portrayal of activities at the
meeting and the maintenance of an amicable relationship between the BOR and the legislature.
MOTION:
ADJOURN
Moved by:
Representative Duxbury
Second by:
Representative Klaudt
Action:
Prevailed by voice vote.
Deborah Rumrill