Iowa State University

Iowa State University
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News Service

News Service:

Annette Hacker, manager, (515) 294-3720

Office: (515) 294-4777

06-10-04

Contact:

Gregory Geoffroy, President, (515) 294-2042

Mark Chidister, Assistant to the President (515) 294-0585

John McCarroll, University Relations (515) 294-6137

Proposed Fy05 Operating Budget Reallocates $8.5 Million For Employee Compensation Increases

AMES, Iowa -- Iowa State University's top funding priority in the fiscal year that begins July 1 will be increases to the salary and benefits package for faculty and professional and scientific employees. The university will self-fund, through internal allocations, $7.1 million in compensation increases for faculty and P&S staff. It will honor another $2.4 million in compensation increases to Merit staff as negotiated in the state bargained contract.

These details are part of the FY05 budget university leaders will present to the Board of Regents, State of Iowa, for approval at the board's June 15-16 meeting in Okoboji. The university's proposed FY05 general fund budget is $422,510,553, about $3.8 million leaner than it was on July 1, 2003.

Iowa State also proposes to commit $250,000 each in new funds to:

  • Improve salaries and research support to recruit and retain top faculty and staff in academic fields particularly important to the university's mission.
  • Improve the compensation package offered to doctoral students to make Iowa State more competitive in recruiting top Ph.D. students. This is the first year of a three-phased plan to offer full-tuition scholarships to all doctoral students.

New revenues and reallocated funds

New revenues to the FY05 budget total $4.9 million. They include:

  • $1.9 million in additional tuition revenue, the result of a tuition increase this fall but coupled with an enrollment projection of 1,000 fewer students than fall 2003.
  • An anticipated $2.25 million increase in indirect cost recovery revenue (due primarily to a very successful year in grants and contracts awarded to the university).
  • A planned increase in the administrative fee, from 2 percent to 2.5 percent, charged to self-supporting or auxiliary units that generate external income not subject to indirect cost recovery. The estimated additional revenue is just over $750,000. The fee covers centrally-provided services to these units such as payroll, purchasing, and accounting functions such as billing and intramural processing. The 2 percent rate went into effect July 1, 2003.

In addition, the university will internally reallocate $8.5 million from existing budgets, all of which will be used for compensation increases.

Additional costs

New costs in FY05 also will total $13.4 million and include $9.5 million in compensation increases and $3.9 million in planned cost increases, such as the recruiting efforts mentioned previously. Other significant cost increases are:

  • Student financial aid, $420,143 (This amount equals 22 percent of new tuition revenues, set aside for student financial aid)
  • Library materials, $550,000
  • Custodial care, utilities and maintenance for new facilities (Gerdin Business Building, Hoover Hall and the Veterinary Medicine Biosecurity unit, in addition to renovated classrooms and auditoriums), $408,614
  • Campus fuel and utilities, $399,293
  • Support for the university's research enterprise, including incentives to increase external funding awards, $1.1 million

Fewer employees, fewer class sections

The absence of new state dollars for FY05 compelled university leaders to impose a 2 percent internal reallocation, essentially an $8.5 million budget cut, to come up with funds to award salary and benefit increases. The most notable outcomes of the cuts are fewer employees and fewer course sections taught to Iowa State students.

The Provost Office has calculated that 528 fewer course sections will be offered at Iowa State during the 2004-05 academic year, translating to 12,895 fewer classroom seats that potentially could be filled by students. Some of those seats (an estimated 4,026) will be recouped by enlarging remaining course sections, but the net loss still will be more than 8,800 student seats. The English department alone will cut 26 sections that could have served nearly 600 students next year.

The spring internal reallocation, combined with last fall's $8.3 million reversion to the state, has affected about 118 FTE university positions and eliminated another 40 half-time graduate assistantships. Forty-one faculty positions are affected, including 38 vacant tenure-eligible faculty positions that have been cut. The equivalent of another 45 P&S positions have been eliminated or shifted to other funding sources, including nine employee layoffs. Nearly 32 Merit positions have been affected, including 11.75 FTE layoffs.

The lost staff positions are as varied as a psychologist in the Student Counseling Center, clerk in the Registrar's office and Extension specialists around Iowa who supported community/business development, youth and families, livestock farmers and commercial horticulture.

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Quick look

Iowa State's top funding priority for FY 05 will be to increase salary and benefits for faculty and professional and scientific employees.