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Fall 2010 Budget Update

Monday, September 20th, 2010

Since the beginning of fiscal 2009, on the heels of a national economic crisis, managing the university's General Education Fund operating budget has required all of us to work together to overcome numerous hurdles. These economic challenges are likely to follow us through the current year and well into fiscal 2012.

Since July 1, 2008, we have seen no fewer than eight appropriation changes to our base budget, resulting in an appropriation reduction of $23 million (22.3 percent). In real dollars, state appropriations are now at the same level as fiscal 1997-98, and in constant dollars, the university is funded at the same level as fiscal1987.

To provide perspective, because of state appropriation reductions these past three years, all unavoidable cost increases (collective bargained salary increases, health costs, energy costs, and other unavoidable and mandated cost increases) have been totally funded by a combination of tuition increases and decreases in personnel and non-personnel budgets.

It is important to clarify that of the $23 million in reductions mentioned above, General Educational Fund appropriation changes during fiscal 2010 resulted in a net reduction of $6.3 million. These changes included the $8.4 million (10 percent) cut in October 2009 and the supplemental appropriation of $5.2 million that was approved by the legislature and signed by the Governor on April 15, 2010.  These were followed by a permanent cut of $3.1 million on April 22, 2010.

Through all of these changes our focus has been to maintain a balance of permanent and one-time funding actions to ensure our top priorities are not compromised. For example, during last fiscal year, the federal government provided one-time ARRA funds of $12.4 million to partially bridge the funding gap. In addition, we enacted permanent divisional reductions of $8.5 million, central-institutional resource reductions of $4.1 million, an early retirement plan that saved $3.8 million, temporary leave-without-pay and one-time pay-reduction savings of $1.3 million, and a temporary TIAA-CREF benefit reduction of $1 million.

We continue to work collaboratively with the Board of Regents, State of Iowa, and our sister institutions to improve operational effectiveness in the areas of information technology, energy conservation and sustainability, and procurement.

The Code of Iowa, 2009 supplement, (chapter 262.9), allows Regent institutions to carry forward unexpended tuition dollars. It provided us the means to bridge $1 million of a $1.25 million budget shortfall as well as support needed adjunct faculty appointments, improve information system efficiency and integrity, address needed building repairs and renovations, and provide additional faculty grant opportunities through grant-matching funds.

As we plan for fiscal 2012, there is still much uncertainty concerning the Iowa economy and state funding, but I am encouraged and thankful for what we have done and will continue to do working together to achieve our vision. As we make decisions in the weeks and months ahead we will continue to do everything we can to maintain academic quality, ensure progress to graduation, make student financial aid accessible and available, and keep our campus safe and secure.

Ben Allen