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Although Iowa State University is located in a state that has historically been very supportive of higher education, budget pressures of the past five years have resulted in significant reductions in that support. As a consequence, the University has been forced to eliminate many faculty and staff positions, reduce administrative costs, increase energy conservation efforts, eliminate lower priority programs, and implement administrative and academic mergers. In addition, the Board of Regents has approved significant increases in tuition and fees. Despite these extraordinary challenges, the university has maintained good financial health with strong bond ratings: Aa3 by Moody’s and A+ by Standard and Poor’s.

The combination of a better state economic outlook and the continued realization of the public benefits derived from higher education indicate that the state may begin to increase investments in higher education. The Board of Regents, State of Iowa, in consultation with the institutions it governs, recently developed a plan titled Regent Partnership for Transformation and Excellence. The plan integrates new state investment, strategic internal reallocations, and moderate tuition increases with the goal of improving the overall excellence of Regent institutions and supporting cutting-edge research to help fuel Iowa’s economy.

Salaries, while competitive earlier in the decade, have fallen behind peer land-grant institutions, making it difficult to attract and retain top faculty and staff. Salary competitiveness is one of the University’s highest priorities. A plan to restore a competitive salary structure has been implemented, although it faces significant challenges in the current budget environment. There is a corresponding need to increase the number of faculty to attain a better balance with student enrollment and to build on strengths in key areas of research.

During the last decade, the University has experienced significant growth in sponsored funding and private support. It has been able to make significant investments in information technologies and has added approximately 1.7 million gross square feet of campus facilities. However, funds for facility repair and maintenance have been reduced due to severe budget cuts, resulting in a substantial backlog of needed repairs exceeding $110 million.

Shortly after his arrival, President Geoffroy recast the budget planning process to make it more consultative and to increase communication with the University community throughout the budget building process. The University has also made great strides in clarifying the steps in the capital project initiation process required to propose and receive approval for construction or renovation of new facilities. Iowa State is now engaged in a study of alternative budget models with the goal of making changes to its budget practices that will increase the linkages between all location of resources and expenses with units’ responsibilities and contributions to progress on Forward Thinking: The Iowa State University Strategic Plan for 2005-2010 (Strategic Plan). The President has set a goal of implementing the new budget model in FY2008.

The University continues to actively seek ways to increase both the efficiency and effectiveness of its programs and operations.