HIGHER EDUCATION
AND
FISCAL ISSUES
Richard D. Brown
Secretary of Finance
April 26, 2011
HIGHER EDUCATION
2
2011 General Assembly Major Actions
Funding for Higher Education
Governor
House
Topic
FY 12 Amount
(millions $)
FY 12 Amount
(millions $)
Undergraduate financial aid
Access, affordability, increased degrees
Operating support
Increase faculty
STEM initiatives
Public-Private Partnerships
Growth for high demand schools
Technology classroom initiative
Online course enhancements
Technology/Online course enhance
Governor's funding incentives
Total
13.0
0.0
0.0
0.0
0.0
0.0
0.0
1.0
3.0
0.0
33.0
50.0
0.0
25.3
16.8
11.5
8.9
3.4
2.7
0.0
0.0
0.0
0.0
68.6
Senate
Conference
FY 12 Amount FY 12 Amount
(millions $)
(millions $)
14.0
23.1
10.6
0.0
0.2
0.0
0.0
0.0
0.0
3.1
0.0
51.0
13.3
25.9
10.6
3.5
3.7
3.4
2.6
0.0
0.5
0.0
0.0
63.5
3
2011 General Assembly Major Actions
Funding for Higher Education
Governor
Topic
FY 12 Amount
(millions $)
House
Senate
Conference
FY 12 Amount FY 12 Amount FY 12 Amount
(millions $)
(millions $)
(millions $)
Other Higher Education Funding
Reversal of ATB cut to HE
Interest and credit card rebates
TAG
ODU base adjustment
Virginia Space Grant Consortium
EVMS
GMU Hylton Center
Massey Cancer Center
UVA Cancer Research*
Transfer grant (financial aid)
Military survivors
VT Extension
VSU Extension
Dahlgren Education Center
Total
Jobs Commission
Non-credit courses
Technology/Research Fund
Total
Grand Total
0.0
7.8
2.5
5.0
0.0
5.0
0.0
5.0
0.0
0.0
0.0
0.5
0.5
1.0
27.3
0.0
7.8
2.5
5.0
0.0
1.2
0.0
5.0
0.0
0.0
0.0
0.5
0.5
1.0
23.5
10.0
7.8
2.5
5.0
0.4
5.0
0.3
5.0
5.0
1.7
0.5
2.5
0.5
1.0
47.1
0.0
7.8
2.5
5.0
0.4
3.0
0.0
5.0
0.0
0.3
0.3
1.0
0.5
1.0
26.8
3.0
25.0
28.0
3.0
10.0
13.0
1.5
10.0
11.5
3.0
10.0
13.0
$105.3
$105.1
$109.6
$103.3
Note:
*Conferees provide $3.0 million for cancer research in FY 2011.
4
Current Action Items
• Frozen Debt Authorizations
– Certain capital projects were frozen in 2010 legislative session pending
assessment of debt capacity.
– The projects include Maintenance Reserve, Higher Education Equipment Trust,
Equipment for buildings coming online, and new construction.
• Revised Debt Capacity Model
– Adopted in November 2010
– See attached models
• Result
– Some funding now being released for capital projects.
5
Debt Capacity Results
•
December 2010 report of the Debt Capacity Advisory Committee
– An additional $363 million could prudently be authorized during
each of fiscal years 2011 and 2012.
•
Solution based on average annual capacity over the ten-year model
horizon, while maintaining debt service at less than 5% of Blended
Revenues.
•
If all available capacity is utilized, the model shows that debt service
will exceed 5% in some years.
•
The highest level of debt service to revenues occurs in 2015 at 5.49%.
6
Debt Capacity Recommendation - December 2010
(Dollars in Millions)
[A]
Fiscal Year
Actual 2008
Actual 2009
Actual 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Blended
Revenues
17,076.40
15,680.70
15,871.20
16,386.60
17,192.53
17,881.30
18,693.10
19,657.60
20,565.90
21,517.18
22,451.66
23,448.25
24,490.00
Actual
Outstanding
Debt Service
as a % of
Revenues
3.12%
3.75%
3.99%
4.23%
3.88%
3.51%
3.24%
3.03%
2.75%
2.46%
2.12%
1.82%
1.60%
[B]
[C]
Actual &
Amount of
Projected
Additional
Debt Service
Debt that may
as a % of
Be Issued
Revenues
December 2010
3.12%
N/A
3.75%
N/A
3.99%
N/A
4.88%
0.00
4.69%
0.00
4.96%
0.00
5.00%
0.00
4.93%
173.95
4.76%
459.72
4.56%
597.38
4.30%
813.59
4.00%
794.74
3.65%
794.74
10 Year
Average
$363.41
[D]
[C]
[D]
Total
Debt Service
as a % of
Revenues
3.12%
3.75%
3.99%
4.88%
4.69%
4.96%
5.00%
4.99%
4.99%
4.99%
4.99%
4.92%
4.77%
Amount of
Additional
Debt that may
Be Issued
December 2009
N/A
N/A
0.00
0.00
0.00
0.00
425.00
425.00
650.00
730.00
742.78
742.78
-
Total
Debt Service
as a % of
Revenues
December 2009
3.04%
3.75%
4.50%
4.98%
5.13%
5.03%
4.96%
4.99%
4.99%
4.99%
4.88%
4.74%
-
$371.56
[A] Equals actual outstanding debt service as a percentage of blended revenues.
[B] Equals outstanding debt service and debt service on currently authorized but unissued debt as a percentage of blended revenues
[C] Equal to annual amount of additional principal that may be issued without violating the parameters of the model.
[D] Equals outstanding debt service; debt service on currently authorized but unissued debt and debt service on additional debt that
that could be issued, as a percentage of blended revenues
7
Debt Capacity Recommendation - December 2010
Average Solution
(Dollars in Millions)
Fiscal Year
Actual 2008
Actual 2009
Actual 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Blended
Revenues
17,534.60
15,680.70
16,085.70
16,386.60
17,192.53
17,881.30
18,693.10
19,657.60
20,565.90
21,517.18
22,451.66
23,448.25
24,490.00
[A]
[B]
[C]
[D]
[C]
[D]
Actual
Outstanding
Debt Service
as a % of
Revenues
3.04%
3.75%
3.94%
4.23%
3.88%
3.51%
3.24%
3.03%
2.75%
2.46%
2.12%
1.82%
1.60%
Actual &
Projected
Debt Service
as a % of
Revenues
3.04%
3.75%
3.94%
4.88%
4.69%
4.96%
5.00%
4.93%
4.76%
4.56%
4.30%
4.00%
3.65%
Amount of
Additional
Debt that may
Be Issued
N/A
N/A
N/A
0.00
363.41
363.41
363.41
363.41
363.41
363.41
363.41
363.41
363.41
Total
Debt Service
as a % of
Revenues
3.04%
3.75%
3.94%
4.88%
4.85%
5.27%
5.45%
5.49%
5.43%
5.33%
5.16%
4.94%
4.66%
Amount of
Additional
Debt that may
Be Issued
December 2009
N/A
N/A
0.00
0.00
0.00
0.00
425.00
425.00
650.00
730.00
742.78
742.78
-
Total
Debt Service
as a % of
Revenues
December 2009
3.04%
3.75%
4.50%
4.98%
5.13%
5.03%
4.96%
4.99%
4.99%
4.99%
4.88%
4.74%
-
Average
$363.41
$371.56
[A] Equals actual outstanding debt service as a percentage of blended revenues.
[B] Equals outstanding debt service and debt service on currently authorized but unissued debt as a percentage of blended revenues
[C] Equal to annual amount of additional principal that may be issued without violating the parameters of the model.
[D] Equals outstanding debt service; debt service on currently authorized but unissued debt and debt service on additional debt that
that could be issued, as a percentage of blended revenues
8
Current Action Items
• Maintenance Reserve
– The Department of Planning and Budget has transferred the FY2011
maintenance reserve appropriation to each agency, and has sent out
directions for submission of related CO-2/HECO-2 (capital outlay) forms to
account for this appropriation.
– The FY2012 authorized amounts should be released early in FY2012 (i.e., no
delay like FY2011 maintenance reserve funding).
• Equipment for Facilities Coming Online
– The Department of Planning and Budget is also processing requests from
institutions for equipment funding provided in FY 2011 for new and renovated
facilities coming online. These requests are being approved once the need for
the funding is shown based on anticipated facility opening dates.
– The bond funding provided in FY 2012 in the amended budget for new facility
equipment is not officially available until the Governor signs the amended
budget. I anticipate releasing this funding, as needed, in FY 2012 to address
those facilities coming online over the course of next year.
9
Current Action Items
•
•
Higher Education Equipment Trust Fund (HEETF)
–
SCHEV has been advised that it can move forward with approving the institutions’ FY 2011 equipment
lists.
–
Schools are expected to absorb their equipment costs for FY 2011, and will be reimbursed for those
costs in FY 2012. Reimbursement is likely to occur in September or October of this year.
–
FY 2012 equipment costs will be covered through the normal HEETF schedule, (reimbursement will
occur next spring).
Frozen Higher Education Capital Projects
–
The six-pack capital advisory group has recommended moving forward with projects that had
recommended project budget amounts from DGS (i.e., DGS had reviewed project preliminary
drawings and provided recommended project budgets).
–
As a result, funding has begun to be released for some of the frozen higher education
construction/renovation projects in Item C-85 of the present budget.
–
The Department of General Services (DGS) is contacting institutions on those projects being allowed
to move forward.
–
We are also processing requests for infusion of institutional funds needed to complete preliminary
drawings for these frozen projects. These funds will be reimbursed once the funding for the project is
released.
–
I plan on having future meetings with the six-pack to consider releasing additional funding for projects
whose preliminary drawings are presently still being reviewed by DGS.
10
Current Action Items
• Stimulus Funds
– Based on final budget reductions taken in FY 2010, the amended budget includes an
additional $3.4 million of federal stimulus funding for higher education originally
directed to K-12 education.
– DPB has sent out a one-page form where you can note the use for this new funding to
have it released.
– Institutions can also propose to change their previous stimulus funding plan to move FY
2011 stimulus funding to FY 2012 (to be spent in the first quarter).
• $10 Million Reduction in Appropriation Act
– A $10 million central account reduction item for higher education institutions remains
in the budget for FY2012 (it was introduced by the 2010 General Assembly). We will
look at this reduction again this fall when the Governor considers any amendments he
might recommend for FY2012 in a caboose bill.
– If this reduction remains, a methodology for spreading the reduction among the
schools still needs to be identified.
11
Current Action Items
• Six-Year Financial Plans
– The six-year financial plans required by each institution under the newly passed Virginia
Higher Education Opportunity Act of 2011 will be due July 1.
– Meetings with the institutions to discuss these plans with the Secretaries of Education
and Finance, SCHEV, the money committees and Planning and Budget will be held in
July and August.
– These plans and the related meetings will be critical for the schools to show the actions
being taken to help meet the Governor’s goals of 100,000 additional degrees over the
next 15 years, increasing access to higher education, and reducing the growth of tuition
increases.
• Future Funding for Higher Education
– The Governor’s higher education commission will continue to make recommendations
to enhance the operational efficiency and programmatic effectiveness of higher
education institutions.
– Although the Governor has noted his desire to provide additional state support for
higher education, anticipated general fund revenues, competing budgetary demands,
and the perceived success of the new higher education six-year planning process will in
the end influence the Governor's final decisions on funding higher education.
12
FISCAL ISSUES
13
Total General Fund Revenue Collections
Collapsed in the Second Half of Fiscal Year 2009
Growth in Total General Fund Revenue Collections
FY09 Monthly and Year-to-Date
8%
4%
2.9%
0%
-1.9%
-4%
-4.2%
-3.5%
-3.7%
-3.5%
Forecast: -7.3%
-5.5%
-8%
-6.1%
-6.8%
-8.6%
-12%
-9.3%
-9.2%
-16%
-20%
Monthly
Year-to-Date
-24%
Jul
Monthly Growth:
•
•
2.9%
Aug
Sep
-6.6%
-7.4%
Oct
-1.0%
Nov
Dec
Jan
Feb
Mar
Apr
-4.6%
-2.6%
-15.0%
-13.6%
-13.9%
-19.7%
May
-15.6%
Jun
-8.0%
Collections declined an unprecedented eleven consecutive months in fiscal year
2009.
For the second half of fiscal year 2009:
–
–
–
–
–
–
Payroll withholding tax collections fell 1.0 percent;
Individual nonwithholding declined 24.8 percent;
Individual refunds increased 17.0 percent;
Sales tax collections declined 5.9 percent;
Corporate income tax receipts fell 19.0 percent, and;
Recordation taxes declined 16.8 percent.
14
Growth in Total General Fund Revenue Collections
Monthly FY10 and FY11 percent change over prior year
20%
15%
10%
5%
0%
-5%
-10%
-15%
Monthly
-20%
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Monthly Growth Adjusted for Accelerated Sales Tax and Amnesty programs.
15
Growth in Total General Fund Revenue Collections
FY11 Monthly and Year-to-Date
18%
16%
14%
12%
10%
8%
5.4%
6%
3.6%
4%
2%
3.6%
4.1%
3.3%
4.1%
0.4%
1.5%
0%
4.9%
Forecast: 4.0%
3.2%
1.3%
-2%
-0.4%
Jul
Monthly Growth: -16.3%
Monthly
Monthly x Amnesty
Aug
-1.7%
Sep
Oct
Nov
5.3%
4.1%
3.7%
9.3% 2.0% (9.5%) 12.6%
-4%
•
•
4.7%
6.2%
FC x AST: 5.6%
6.7%
Dec
Jan
Year-to-Date
Feb
Mar
16.7%
12.4%
Apr
YTD x AST
May
Jun
Total general fund revenue collections rose 12.4 percent in March.
On a year-to-date basis, total revenue collections rose 4.9 percent, slightly ahead of the
revised annual forecast of 4.0 percent growth.
– Adjusting for the accelerated sales tax program in June 2010, total revenues grew
6.7 percent through March, ahead of the economic-base forecast of 5.6 percent
growth.
16
General Fund Forecast For FY2010
November 2008 to June 2010
$ in Millions
Fiscal Year 2010
Major Source
Individual Income:
Withholding
Nonwitholding
Refunds
Net Individual
Corporate Income
Sales & Use Tax
Wills (Recordation)
Insurance Premiums
All Other Revenue
Total Revenue
November
2008
June
2010 (actual)
Difference
$10,105.4
3,315.6
(1,827.5)
11,593.5
$9,176.2
1,906.8
(1,994.7)
9,088.3
($929.2)
(1408.8)
(167.2)
(2,505.2)
728.2
3,391.2
415.1
317.3
806.5
3,082.5
290.2
261.9
78.3
(308.7)
(124.9)
(55.4)
744.8
690.2
(54.6)
$17,190.1
$14,219.6
($2,970.5)
17
The Total Percentage Loss in General Fund
Revenue for the 2008-10 Biennium
Was Over 20 Percent
• Including the December reforecast, there were a series of revenue
reductions for the 2008-2010 biennium totaling over $7.5 billion.
Date
Reductions in Millions
August 2007
-$ 934.4
February 2008
- 1,064.5
October 2008
- 2,513.7
December 2008
-
373.6
February 2009
-
821.5
August 2009
- 1,508.3
December 2009
-
Total
-$7,551.1
335.1
18
Major Federal Stimulus Grants to Virginia
$ in Millions
Fiscal Stabilization Funding:
K-12
Higher Education
General Aid
K-12 Education (Jobs Bill)
Medicaid Match Rate
Transportation:
Highways
Public Transportation
Rail Improvements
$
707.1
276.8
218.9
249.4
1,776.6
694.5
111.9
4.2
19
LOOKING TO THE FUTURE
20
Growth in Total General Fund Revenues
Fiscal Year 1961 - Fiscal Year 2012
(Nominal - Actual Dollars)
FY
Total Revenues
Growth
FY
Total Revenues
Growth
61
230,998,887
-
87
4,590,434,000
11.1%
62
242,144,567
4.8%
88
5,054,382,000
10.1%
63
286,304,265
18.2%
89
5,478,912,000
8.4%
64
298,033,919
4.1%
90
5,494,884,000
0.3%
65
323,213,412
8.4%
91
5,471,879,000
-0.4%
66
365,129,776
13.0%
92
5,623,213,000
2.8%
67
414,755,644
13.6%
93
6,133,637,000
9.1%
68
533,597,744
28.7%
94
6,503,368,000
6.0%
69
706,254,374
32.4%
95
6,881,145,000
5.8%
70
743,721,322
5.3%
96
7,356,110,000
6.9%
71
807,954,651
8.6%
97
7,949,327,000
8.1%
72
922,653,686
14.2%
98
8,773,520,000
10.4%
73
1,054,469,443
14.3%
99
9,702,747,000
10.6%
74
1,168,562,871
10.8%
00
10,788,482,000
11.2%
75
1,303,178,893
11.5%
01
11,105,275,000
2.9%
76
1,428,421,157
9.6%
02
10,678,954,000
-3.8%
77
1,636,301,819
14.6%
03
10,867,149,000
1.8%
78
1,923,085,084
17.5%
04
11,917,867,000
9.7%
79
2,115,211,522
10.0%
05
13,687,252,000
14.8%
80
2,344,928,934
10.9%
06
14,834,298,000
8.4%
81
2,579,663,941
10.0%
07
15,565,827,000
4.9%
82
2,796,458,741
8.4%
08
15,766,951,000
1.3%
83
2,975,687,935
6.4%
09
14,315,060,000
-9.2%
84
3,397,710,261
14.2%
10
14,219,477,000
-0.7%
85
3,790,816,000
11.6%
11*
14,717,400,000
3.5%
86
4,131,778,000
9.0%
12*
15,452,200,000
5.0%
* December 17, 2010 Forecast (Excludes Transfers)
21
High-End Filers Determine Personal Income
Tax Revenues
80%
Top 10%
Top 10%
70%
Top 10%
Top 5%
60%
Top 5%
Top 5%
50%
Top 1%
40%
Top 1%
Top 1%
30%
Top 0.1%
Top 0.1%
20%
10%
Top 0.1%
0%
1997
2002
2007
•
In 2007, the top 0.1% paid 20%.
•
In 2007, the top 1% of filers paid 40% of total revenues
– Up from 25% in 1991
•
The top 5% paid 60%
•
The top 10% paid 71%
Source: IRS data and Tax Foundation
22
General Fund Revenue
$ in Millions
Fiscal Year
Revenue
Growth
Total
Revenue
Nonwithholding
% of Total
2000
10.5%
$10,721.5
$1,669.7
15.57%
2001
2.9
11,105.3
1,806.8
16.27%
2002
(3.8)
10,679.0
1,459.5
13.67%
2003
1.8
10,867.1
1,402.7
12.91%
2004
9.7
11,917.9
1,562.8
13.11%
2005
14.8
13,687.3
2,073.5
15.15%
2006
8.4
14,834.3
2,530.2
17.06%
2007
4.9
15,565.8
2,782.0
17.87%
2008
1.3
15,767.0
2,861.2
18.15%
2009
(9.2)
14,315.1
2,310.4
16.14%
2010
(0.7)
14,219.5
1,906.8
13.41%
23
Trends in Withholding Compared to
Individual Nonwithholding
Percent Change
Percent Growth Over the Prior Year
50
40
30
20
10
0
-10
-20
-30
-40
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09'10*'11*'12*
* Forecast
Withholding
Nonwithholding
24
Trends in Withholding Compared to
Corporate Income Tax
Percent Change
Percent Growth Over the Prior Year
50
40
30
20
10
0
-10
-20
-30
-40
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09'10*'11*'12*
* Forecast
Withholding
Corporate
25
Trends in Withholding Compared to
Recordation Tax
Percent Change
Percent Growth Over the Prior Year
50
40
30
20
10
0
-10
-20
-30
-40
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09'10*'11*'12*
* Forecast
Withholding
Note: Recordation growth rate is adjusted to remove the rate increase and for transfers per HB 3202.
Wills (Recordation)
26
Economic Development Investments 2010 & 2011 Legislative Sessions
Initiative
Growing Virginia's Innovation Economy
Adjust funding for the Governor's Development Opportunity Fund
Reestablish funding the Business Incubator Program (or CIT Gap Funds)
Virginia Research and Technology Investment Fund/ Commonwealth Research Commercialization Fund
Small Business
Increase funding for Loan Guarantee Program
Continue funding for the Business One Stop Program
Increase the appropriation for the Virginia Jobs Investment Program
Enhanced Funding for the Virginia Small Business Financing Authority
Tourism
Fund domestic and international marketing activities
Deposit Wine Liter Tax attributable to Virginia Wine into Virginia Wine Promotion Fund
Fund State Park Visitor Centers
Increase funding for Governor's Motion Picture Opportunity Fund
Expand Tourism Marketing Partnership Grant Program
Revitalization and Redevelopment
Establish Major Employment and Investment Project Site Planning Grant Fund
Industrial Site Revitalization
Brownfields Restoration
Training Workers for Virginia Businesses
Expand Career Pathways Programs
Fund non-credit courses at community colleges
Coordinated, Efficient and Effective Economic Development Strategies
Establish Economic Development Offices in China, India, the UK and expand VALET
Implement aggressive advertising campaign, marketing and sales support
Increase Funding for the Enterprise Zone Program
Improve Economic Development Efforts through Regional Collaboration
Tax Credits and Tax Studies
BPOL Tax Reform Study (Language for JLARC)
Remove the $3 mil cap on the Qualified Equity and Subordinated Debt Investment Tax Credit & raises it to $5
mil
Provide income tax exemption for qualified investments by technology and science start up companies
Virginia Port Tax Incentive
Virginia Winery and Vineyard Development Tax Credit
Refundable Research and Development Tax Credit
Economic Development and Investments 2010 and 2011 Sessions Total
Conference 2010-2012
6,100,000
1,500,000
10,000,000
1,000,000
1,000,000
3,500,000
5,000,000
7,200,000
1,490,000
1,000,000
2,500,000
1,000,000
5,000,000
3,000,000
1,000,000
100,000
3,000,000
1,500,000
4,500,000
3,500,000
200,000
0
1,000,000
500,000
5,000,000
250,000
5,000,000
74,840,000
27
Federal Health Care Reform
• The Federal Health Care Reform Program is expected to cost
Virginia about $2.0 billion by 2022.
• Moreover, the Federal Health Care Reform Program contains
a permanent “Maintenance of Eligibility (MOE)” provision for
basic Medicaid services and the Children’s Health Insurance
Program (CHIP).
• Virginia faces a very uncertain situation if additional budget
reductions are needed to address the impact of a future
recession.
28
Budget Driver: Medicaid
Medicaid Enrollment & Expenditures, FY 2008
Aged
Blind & Disabled
Adults
9%
20%
20%
16%
47%
Children
Aged
55%
10%
23%
Recipients
Department of Planning and Budget, 2008.
Blind & Disabled
Adults
Children
Expenditures
29
Budget Drivers FY 1985
All Other
$1,078,603,451
28.7%
K-12
$1,355,514,703
36.1%
Medicaid
$202,916,420
5.4%
Corrections
$276,877,715
7.4%
Per CH 221
Mental Disabilities
$212,605,320
5.7%
HiED
$627,012,547
16.7%
30
Budget Drivers FY 2012
All Other
$3,676,731,092
23.5%
Medicaid
$3,333,818,121
21.3%
Corrections
$1,236,383,992
7.9%
Per HB 30 as introduced
K-12
$5,270,628,823
33.8%
HiED
$1,462,058,381
9.4%
Mental Disabilities
$636,432,558
4.1%
31
The Projected Balance in the Revenue
Stabilization Fund Will Be $351.3 Million After
the Proposed $50 Million Deposit In
Fiscal Year 2012
Revenue Stabilization Fund -- June 30 Balance
FY 1995-2010 Actual and FY 2011-2012 Forecast
(millions of dollars)
32
VRS Funded Status: State Employees
120%
100%
80%
%
.3
9
%
7 8
0% 81 .
.
78
%
.8
%
%
6
5
.1
.
0
%
4
5
1
.4
10
0
10
%
%
10
.3
.6
5
4
9
9
%
%
.8
.3
5
8
3
8
%
.1
5
8
%
%
.0
.0
8
4
8
8
%
.5
8
7
%
.9
72
%
.7
%
5
.7
6
61
60%
40%
20%
0%
1994
1998
2000
2002
2004
2006
2008
Assumptions:
• FY 2009 investment return is -21.1%.
• All projected years investment return is 7.5% and 2.5% inflation rate.
• Employer contribution rates for fiscal year 2009 is fixed at 6.23% and for 2010 at 6.26%
for state employees.
• Actual value of assets subject to 5-year smoothing with no corridor.
2010
2012
33
60%
58
.5
%
61
.3
%
66
.8
%
71
.1
%
76
.1
%
79
.8
%
76
.0
%
78
.2
%
77
.9
%
87
.2
%
76
.0
%
83
.4
%
80%
70
.0
%
100%
93
.7
%
92
.6
%
10
3.
1%
10
6.
2%
120%
99
.4
%
VRS Funded Status: Teachers
40%
20%
0%
1994
1998
2000
2002
2004
2006
2008
2010
Assumptions:
• FY 2009 investment return is -21.1%
•All projected years investment return is 7.5% and 2.5% inflation rate with 20-year amortization period.
•Employer contribution rates for FY 2009 and FY 2010 are fixed at 8.81%
•Actual value of assets subject to 5-year smoothing with no corridor.
2012
34