The presidents of Iowa's three public universities addressed the Iowa General Assembly's Joint Education Subcommittee on March 3. President Allen's comments (pdf) as well as comments from the presidents of Iowa State University, the University of Iowa and Iowa's two special schools.
As the fiscal year continues, I am diligently working with campus community members on how we strategically face the economic challenges ahead. In every effort to keep you informed, I wanted to let you know that I and the other public university presidents will make a presentation at the meeting of the Iowa General Assembly's Joint Education Subcommittee to be held March 3. I wanted to share some of the key points I will plan to focus on at that meeting.
I will share with the members of the subcommittee that UNI is committed to educating thousands of students each year, most of whom are from Iowa and stay in Iowa, creating significant value to the state. We also take seriously our responsibility of assisting the state's economic, cultural and social development to establish Iowa's future as a state with an exceptional workforce and a high quality of life. A budget reduction of the magnitude we are facing will adversely impact our ability to serve the people of Iowa.
At UNI, these budget challenges will need to be addressed through a combination of actions. Each division is reviewing the critical nature of its services and identifying areas where strategic, targeted cuts can be made with the least amount of impact on university priorities. Across-the-board budget reductions will not be made. Some units will be affected more than others. No matter what we do, there will be a reduction in personnel, programs, services and non-personnel expenditures. As many of you know, UNI athletic director Troy Dannen has officially announced the dissolution of UNI's baseball program effective after the 2009 season. With the ongoing budget challenges, state funding of UNI athletics will be reduced, and the elimination of the baseball program is a consequence of that reality. UNI baseball has a respected history and we regret the need to make this decision based on our financial challenges. In the best tradition of UNI, every effort will be made to support the students impacted to ensure they can continue their academic pursuits at UNI, or wherever else they may choose.
Our priorities for funding will be to continue to offer those programs, services and functions that are critical to our long-term sustainability. Our student-focused approach will continue to serve this university well. We will do everything we can to maintain academic quality, progress to graduation, student financial aid and campus safety and security.
When faced with sizable challenges, we have the opportunity to sharpen our focus. I encourage you to continue to focus on the responsibilities given to UNI and look to the future with patience and courage.
These are unprecedented times for our economy, for higher education and the University of Northern Iowa. In November and December, UNI experienced budget reversions that totaled 2.5 percent. Now, with the governor's announcement that his fiscal 2010 budget includes a 6.5 percent cut for most state agencies, including UNI, we are working to address a total reduction of 9 percent. This figure may change. Legislators have indicated it could be higher. The Revenue Estimating Conference in March will give us a better indication.
Today, I am introducing two new task forces. One will focus on new cost-containment strategies, and the other will concentrate on revenue-enhancement strategies. The task forces will be structured in such a way as to broaden and maximize input from the campus community. I will chair both of these task forces. I encourage you to communicate ideas to these task forces regarding cost containment and revenue enhancement for the university. Please send your ideas to firstname.lastname@example.org.
These task forces will be critical to our long-term sustainability. Short-term budget reduction solutions must be acted on immediately, as follows:
- A hiring freeze is in effect. A review by the divisional vice president must be conducted for all vacancies prior to action, with exceptions reported to the president.
- Non-essential out-of-state travel is restricted. A review by the divisional vice president must be conducted for all travel prior to action.
- Temperature will be controlled to 68-70 degrees in the winter and 74-76 degrees in the summer unless health, safety, research needs, or equipment maintenance and usage require otherwise.
- Lighting will be evaluated and reduced where possible without sacrificing safety.
From now until we learn the full extent of state-mandated cuts, it is critical that we all work together on strategic solutions. The larger the cut, the more collaborative support we will need from our campus, the governor and the Legislature to make critical decisions regarding staffing levels, program offerings and our institutional priorities.
The priorities we have established for this university remain important for our students and the state, even though the progress we had envisioned for the university will happen within a different time frame.
Our student-focused approach has served this university well. We cannot abandon our guiding principles just because we are in tough times. By working collaboratively and with a common purpose, we have an opportunity to ensure that UNI emerges from these economic challenges a strong university, with its values intact.
For the past two fiscal years, UNI received strong state support and additional revenue from enrollment growth and tuition increases. Because of the recent natural disasters in the state and the national economic downturn, we've been asked to return $1.02 million of our fiscal 2009 state appropriation.
UNI is committed to a philosophy of Students First. Therefore, in fulfilling the governor's request, our priorities will be protection of our academic course offerings, student progress to graduation, and campus health and safety. The funds reverted were intended to further enhance the student learning environment and support services in such areas as information technology systems and security, library materials and building maintenance.
Because we don't yet know what will happen with future state appropriations and enrollment, we're preparing several possible budget scenarios for fiscal 2010. We'll continue to protect academic course offerings, student progress to graduation, and campus health and safety. We'll welcome input as the fiscal year proceeds.
We continue to monitor the situation very closely, and I'll keep you informed of any developments as they occur.
In November, I promised to keep you informed about budget-related developments. To re-cap, in November, the University of Northern Iowa was required to return $1.02 million of its fiscal 2009 state appropriation. We had planned to invest those funds in information technology systems and security, library materials and building maintenance projects. Those areas didn't have to revert funds already allocated, but they did lose planned additional investments in their programs.
Since my November 24 message, several key developments have occurred that affect our budget for both the rest of this fiscal year (2009) and next fiscal year (2010).
First, in December, the Board of Regents, State of Iowa, approved our proposed tuition increases for the 2009-10 academic year -- a 4.2-percent increase for resident students and a 2-percent increase for non-resident students.
Second, the Governor issued an executive order in December calling for a 1.5-percent across-the-board state spending reduction. That translates into an additional $1.55 million in general operating funds UNI must give back this academic year.
Fifty percent of that $1.55 million (minus some special line-item appropriations) will be covered centrally, using one-time funds. The other half ($737,148) of the reversion will be distributed across the divisions in an across-the-board manner -- proportionate to their respective share of the general-fund budget. Each vice president will determine how his division will handle the fiscal 2009 reversion.
Because of our focus on students, we made a commitment not to reduce student financial aid support or campus security and safety measures. Based upon the divisions’ general-fund budgets, as adjusted for student financial aid and campus security being held harmless, the distribution of the $737,148 budget reduction for fiscal 2009 resulted in following:
Division of Academic Affairs ($491,357)
Division of Administration and Finance ($166,997)
Division of Student Affairs ($40,755)
President’s Office ($23,326)
Division of Marketing and Advancement ($14,713)
Units receiving special line-item state appropriations will be asked to handle the reversion on their own. The reversion from those programs will be nearly $75,000. Affected programs include the Iowa Mathematics and Science Education Partnership, the Institute for Decision Making, MyEntreNet and several others.
Given the immediate nature of this budget reversion, we decided to make the fiscal 2009 reversions in an across-the-board manner, and take additional time to make more strategic budget decisions for fiscal 2010.
These two mid-year budget reductions, which total a 2.5-percent reduction, create significant challenges to UNI because of the timing of the announced reversions and the significance of state funds in our overall budget. We're making these decisions with a commitment to protect our academic course offerings, student progress toward graduation, and campus health and safety.
As we move forward with the development of the fiscal 2010 budget, our continued focus will be on maintaining the quality of our academic programs and the education of our students.
Thank you for your patience as we work through these budget challenges. I'll keep you informed of any developments as they occur. I also encourage you to send me any ideas about how UNI can become more efficient, more cost effective and more entrepreneurial to better meet these budget challenges.
UNI budget update from President Koob
Fiscal year 2007 is the second year of the Board of Regents, State of Iowa, Transformation Plan. As part of that plan, the BOR's budget request to the governor and the Iowa General Assembly was for an increase of $40 million. UNI's share of that $40-million would be $7.5 million (18.75 percent). The transformation plan also recommends holding tuition increases to approximately 4 percent ($1.5 million).
However, the governor has recommended a $20-million increase for the regents, which translates to a state-appropriation increase of only $3.75 million for UNI. This will not cover our obligations, including increased utilities and salary increases mandated by collective-bargaining agreements.
If the governor's budget is approved, UNI will need to internally reduce/reallocate $3 million -- just to meet mandatory cost increases. This means making tough decisions regarding significant changes in programs and services at UNI.
If the legislature approves less than the governor recommended, the internal reductions will be even greater. For every $1 million less than the governor recommended, UNI will have to reallocate $187,500.
We intend to adhere to our basic values and principles of maintaining a quality learning environment for students with respect to class size, student-to-faculty ratios, and availability of classes.
We won't be able to finalize our budget plans until the legislature completes its work. The campus will be kept informed as budget details become clear. Unfortunately, this doesn't look like a short-term problem. Decisions we make this year will have an impact over the next three to four years.
The Board of Regents has requested a $40 million base increase to be allocated to the three Regents universities. The Regents request is posited on a commitment for by the universities to internally reallocate a total of $20 million and hold tuition and fee increases to 4%. The Board of Regents also has requested a $15 million one-time appropriation for deferred maintenance, to be allocated among the institutions with a match requirement.
The Governor has recommended a $40 million increase for the Regents, divided equally into two accounts: $20M in the salary bill and $20M to the general university budgets. The Governor has not recommended a one-time appropriation of $15M to the Regents for Deferred Maintenance. Should the legislature fund it, UNI would need to provide an increase to its building repair budget of at least $270,000 according to the Regents plan.
The Cabinet is discussing several potential budget scenarios. Whatever the allocation, the cabinet is proposing that all mandatory cost increases be deducted first. These include salary, wages, and benefits (to be determined by the results of collective bargaining), financial aid increases, utility cost increases, fee replacements and matching costs (the last two result directly from Board action this year). The remaining dollars will be allocated to each division proportionately to its share of the total budget to then be allocated by the Vice President to strategic initiatives within the division.
Failure by the legislature to fully fund the Board request, a Board decision to reduce UNI’s share of the request from the higher to the lower end of the traditional range, or a higher than usual settlement in collective bargaining will reduce any amount available for distribution.
Significant underfunding of the Board’s request may precipitate a second round of tuition and fee discussions by the Board. No accurate estimates of the outcome of such discussions are available since there is no prior history of such action.
There are many variables and unknown factors at this stage of the budget process. The campus community will be kept informed as the legislative session progresses and details of the budget become more clear.
At the February Board of Regents meeting, the three state university presidents made presentations about how their respective institutions are responding to the mid-fiscal-year budget cuts that were announced in October 2003. Some local media reported this discussion as the announcement of another round of budget cuts - that was incorrect. There is no new information about the budget situation, and no further action has been taken. (See the Feb. 5 Proposed Fiscal Year 2005 Budget update below).
Also during the February meeting, the Board of Regents, State of Iowa, adopted a resolution regarding funding for the three state universities. It follows below.
This Web site will be updated as additional information is available.
Board of Regents Resolution
Adopted Feb. 19, 2004
Whereas, the five institutions governed by the Board of Regents, State of Iowa, benefit Iowans statewide with educational opportunities, research and scholarship, and service in all 99 counties, including activities that strengthen Iowa’s economy; and
Whereas, the positive impact these institutions have on the quality of life in Iowa makes them worthy of public support, the Board of Regents reaffirms its request for adequate state appropriations to ensure educational quality; and
Whereas, critical to that quality is adequate state funding that enables the Regent universities to attract and retain exceptional faculty; and
Whereas, state elected officials are considering proposals to reinvest in education in Iowa, including the Regent institutions;
Therefore, the Board of Regents requests elected officials to reinvest in public higher education by increasing funding to protect Iowa students and their families from the harmful effects of inadequate funding, to avoid further deterioration in the quality of these important institutions, and to benefit all Iowans by supporting the Board’s four priorities: high-quality education, research and scholarship, service and economic growth activities, and public accountability.
Proposed Fiscal Year 2005 Budget
Feb. 5, 2003
The governor’s fiscal year 2005 budget proposal includes a slight increase but no salary bill. Because the legislative session has just begun, there is a lot of uncertainty about support for the governor’s fiscal year 2005 budget, particularly because his recommendations are premised on some additional tax revenues. The budget proposal does not include recommendations for capital projects, although there is a possibility that the General Assembly will consider a bonding bill.
UNI 's budget was cut in fiscal years 2001, 2002, 2003 and 2004. Last October, the budget was cut 2.50 percent, which means we had to absorb $2,009,683 this fiscal year.
With no salary bill before the legislature to cover negotiated salary increases, and with no guarantee of any increase in state appropriations, the expected increase in tuition revenue will be needed to pay for fiscal year 2005 salary increases. Beyond tuition, additional reallocations from operations will be needed to fully cover the salary increases. In addition, the October budget cut will become a permanent base reduction as we enter fiscal year 2005.
We do not anticipate additional budget reductions this fiscal year -- however, that is always a possibility. If we receive any additional income, it will be strategically used to offset any reductions.
Our long-term strategy continues to be to maintain the highest academic quality. Further reductions in UNI's size may be required if state support continues to diminish.
The State Revenue Estimating Conference will meet again in March. The results of that meeting, as well as decisions made by the General Assembly about our fiscal year 2005 appropriations, will provide some indication of the likelihood of future cuts. It likely will be late April before any final decisions are made. This Web site will be updated as additional information is available.
The Governor’s budget proposal for FY 2004 includes full funding of salaries, no increase in appropriations for UNI’s general university operations, and no new funding for future capital projects. However, this proposal is contingent upon confirmation by the legislature of the source of funds used to make these commitments. If these three budget proposals hold true, then we can allocate new tuition dollars to maintain university excellence. Uncertain at this time, is legislative funding needed to support the Governor’s budget recommendations.
If there are no cuts to the current FY 03 and future FY 04 operations budget, and if salaries for FY 04 are fully funded, the plan for allocating tuition revenue is to reduce deficits resulting from past budget cuts and restore the building repair fund which was significantly cut during FY 02 and not restored in FY 03. Tuition revenue above that needed to meet salary and other mandated cost increases would be distributed according to the strategic plan. There is little reason to expect to do more than recover from past losses.
The university is still restructuring as a result of previous years’ budget cuts, and until the legislature has completed its work, we cannot be certain that salaries will be fully funded or that the operations budget for FY 04 will not be reduced.
As of February 19, for FY 04 the legislative commitment is still in place for funding the current capital projects, which include the Innovative Teaching Center and the Steam Tunnel Distribution System. However the Governor has not recommended funding UNI’s FY 04 capital requests that include deferred maintenance of $4 million, an electrical distribution loop system for $7 million, and Phase 1A of the science buildings renovation for $5.7 million.
This web site will be updated as more information becomes available. If you have any questions or comments, please submit them to the web site link provided below.
The Governor’s current budget proposal for FY 2003 does not include any increase in appropriations for UNI’s general university operations. At best, we can hope to receive full funding for increases to salaries and wages.
Since the Legislature has not completed its work, we cannot be certain that the costs of salary and wage increases will be fully funded, nor can we know whether or not there will be further reductions in state appropriations.
As described to the campus in previous communications, increases in tuition revenue will be allocated to strategically restore some of the cuts from this year’s budget, and then to support strategic plan initiatives.
Following this year’s severe cuts in state appropriations, we need to be aware that across-the-board reductions have taken the already efficient operation as far as it can go without affecting personnel. Any further significant budget cuts may necessitate program reductions, which could lead to lost positions.