RubinBrown Colleges & Universities Stat Book | PUBLIC INSTITUTIONS

Year-Over-Year Percent (%) Change in State Appropriations *

2-year

4-year

IL

IA

KS

MO

General

-1.11%

19.45%

82.81%

-1.99%

0.80%

-3.70%

2016 –2017

Overall

2.61%

7.61%

24.55%

-0.96%

2.04%

2.33%

General

-0.10%

39.17%

159.38%

-3.22%

0.20%

-1.54%

2017 –2018

Overall

0.20%

6.67%

29.66%

-1.99%

4.01%

-5.05%

Most of the increases seen in state appropriations have been capital specific in order to address infrastructure and building needs for aging buildings that are prevalent on many campuses. The following table illustrates the change in state appropriations overall and in state general appropriations. Illinois appears to be an outlier; however, their state appropriations were partially withheld in FY16 and FY17 causing a significant increase in each year once the funds were approved and made available to the institutions. Debt Burden Ratio The debt burden ratio is typically calculated by dividing debt service by total expenditures. Debt service consists of the interest and principal paid on long- term debt (excluding principal paid on refinancing transactions). A significant number of institutions rely on debt to finance operations. The debt burden ratio is important because it is a key indicator of an institution’s ability to expand operations. Widely viewed as an industry standard, 7.00% is regarded as the upper threshold for this ratio; however, some institutions can still operate successfully while exceeding this ratio. A higher debt service burden indicates that an institution has less flexibility to manage its operating budget. Institutions with diverse revenue streams might be more comfortable with a higher debt burden ratio than institutions that are highly dependent on revenue generated by tuition. The average debt burden ratio for public institutions was 4.40% in FY16, 4.20% in FY17, and 4.10% in FY18. The lowest debt burden ratio included in the sample was 1.60% while the highest debt burden ratio was 10.10%. There were no public institutions that were debt free in any year reviewed.

Debt Burden Ratio Frequency by Percent of Institutions

80%

70%

60%

41.7% 38.9% 44.5%

33.3% 41.7% 30.8%

50%

40%

30%

11.1% 19.3% 11.1%

20%

PERCENT OF INSTITUTIONS (%)

8.3% 5.6% 8.3%

2.8% 2.8% 0.0%

10%

0%

0%–2%

2%–4%

4%–6%

6%–8%

8%–10%

FY16

FY17

FY18

COLLEGES & UNIVERSITIES SERVICES GROUP

RubinBrown’s Colleges & Universities Services Group provides a full range of assurance, consulting and tax services to colleges and universities. Our specialized services and expertise are delivered with close personal attention to our clients. For more information, visit www.RubinBrown.com/Colleges .

Corey Robinson, CPA Manager 816.859.7943 corey.robinson@rubinbrown.com Chester Moyer, CPA Partner-In-Charge 816.859.7945 chester.moyer@rubinbrown.com

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Public Institution Scores

* All state averages are for four year institutions for purposes of the statistics in this publication