Expanding our resource base, including increased state support, will be essential to the success of Flagship 2030. As in the past, enrollment trends will play a crucial role in CU-Boulder budget planning. We have constructed a budget model to assist in identifying the fiscal implications of this strategic plan. The model considers the change in enrollment size and mix by using revenue and expense data from past trends at CU-Boulder as well as student level expense ratios from our peers. These data include information about expected tuition and state appropriation revenues, average expenses per credit hour at the undergraduate and graduate levels, and the need for new facilities associated with overall enrollment growth.
Using this model, we anticipate that if the changes in overall size and the residency and graduate mix described in the enrollment scenarios are fully implemented, there likely will be a budget shortfall of approximately 6 percent. This budget gap is created by the combination of an expected 2 percent increase in revenue capacity and an 8 percent increase in expenses. To address this shortfall, we will need to increase revenues by 0.4 percent per year over the next 15 years, or 2.6 percent per year if the enrollment changes are implemented over 23 years.
In addition to responding to enrollment changes, we project we will need to increase revenues by another 1.8 percent each year in order to implement the eight "core initiatives" in Flagship 2030. This projection is based on the levels of funding needed to make the investments outlined in the plan. Also, the university will need to identify additional resources to implement the 10 transformative "flagship initiatives" outlined in the plan. We believe these initiatives will require an investment of another 2 percent per year.
Thus, we estimate that CU-Boulder will need to increase revenues by a total of 4.2 percent per year, over and above mandated and operating cost increases. These revenue enhancements will be necessary to support our statutory mission, remain competitive, and emerge as a national leader among public research universities.
To reach our aspirations, we intend to explore all sources of additional revenues, including state tax support, tuition, fundraising, contracts and grants, entrepreneurial programs, technology transfer, and budget reallocations. Diversifying and expanding CU-Boulder's resource base will be essential to the success of Flagship 2030.