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APPROVED 08/18/2022<br />
“MIDDLE-OF-THE-ROAD”<br />
SCENARIO<br />
Figure 14 is a pro forma that would support<br />
TSTC’s debt service to fund the proposed CCAP<br />
projects. It supposes TSTC’s tuition revenues<br />
will grow at a rate of 6.7% annually on average<br />
over the next five years. The analysis hedges<br />
expectations of appropriations, assuming the<br />
legislature will reduce commission payouts<br />
under the returned-value funding formula to<br />
approximately 35% <strong>and</strong> 28%, compared to the<br />
36% calibrated rate previous legislatures have<br />
funded. Operating expenses rise in concert with<br />
operating revenues over this five year term<br />
to maintain discipline around compensation,<br />
human capital capacity (new positions),<br />
inflation, scheduled maintenance, <strong>and</strong> new debt<br />
service requirements.<br />
Figure 14: Middle-of-the-Road Scenario<br />
Tuition & Return Value<br />
340M<br />
130M<br />
330M<br />
120M 320M<br />
310M<br />
110M<br />
300M<br />
100M 290M<br />
280M<br />
90M<br />
270M<br />
80M<br />
260M<br />
250M 70M<br />
240M<br />
60M<br />
230M<br />
220M 50M<br />
Five Year - Pro Forma w CCAP Debt Service<br />
6.7% Avg Annual Tuition Growth & Appropriations Curtailed<br />
Tuition - 6.7% Average Growth<br />
Total Operating Expense<br />
Returned Value - Hedged<br />
Total Operating Revenue<br />
$4.6M Accum. Margin with<br />
Prioritized Investments<br />
340M<br />
320M<br />
300M<br />
280M<br />
260M<br />
240M<br />
220M<br />
Total Operating Revenue & Expense<br />
28<br />
210M<br />
40M<br />
200M<br />
2022 2023 2024 2025 2026 2027<br />
STRATEGIC PLAN & BUDGET REPORT<br />
200M
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