Iowa State University


Inside Iowa State
May 19, 2000

ISU task: Shave $5 million

by Diana Pounds
In this interview with Inside Iowa State, President Martin Jischke discusses the shortfall in state funding that Iowa State will face in fiscal 2001 and plans to cope with that shortfall.

How much is the shortfall in state funding to Iowa State?
The shortfall in funding for our salary policy and operating budget is about $10 million. Additional tuition and fee income should be about $5 million, leaving about a $5 million net shortfall.


How much of the shortfall is in operating funds and how much is in under-funded salary increases?
The overall $10 million shortfall is in about equal portions -- a $5 million shortfall in each.


How will you cut expenses by $5 million?
We're planning that now. Some areas will be protected from cuts. We won't reduce funding for library acquisitions, student financial aid, recruiting of students, and matching and start-up packages for new faculty. That leaves about 95 percent of the budget to be reduced by about $5 million. We're currently finding out how various units will accommodate it, but I'm going to guess that some vacant positions will not be filled and in a few cases, there might be layoffs.


Can you estimate how many layoffs and unfilled positions there might be?
I can't estimate at this point.

Will cuts be distributed proportionately across units that aren't protected from funding reductions?
They will be distributed proportionately across the president, provost and vice presidents' budgets.


In light of the shortfall, will units still be required by the Board of Regents, State of Iowa, to internally reallocate 2 percent of their budgets toward strategic goals?
The total reallocation, including the shortfall, must be 2 percent. That is, a department's budget cuts will count toward its reallocation.


Under the contract, merit employees will receive 4 percent aggregate, average salary increases. Did you consider giving faculty and P&S staff a somewhat smaller pay hike to help with the budget crunch?
We rejected that option as short-sighted. Nothing is more important to success at Iowa State than the quality of its people. We don't want to compromise on that. It's a pretty competitive market for talented people and one way to retain what is an extraordinarily fine group of faculty and staff is to make sure they're paid competitively. So, faculty and P&S staff also will receive an aggregate, average 4 percent salary increase.


What is the formula for pay hikes this year?
According to salary guidelines, faculty and professional and scientific staff who are meeting performance expectations will receive increases of at least 1.33 percent, or one-third of the university-wide average 4 percent increase. Salary increases above that will be awarded on the basis of merit, equity or market considerations. Increases for merit employees will be provided, according to the terms of the contract.


You have said the shortfall could lead to substantial tuition hikes for the year that begins fall 2001. What kind of tuition increase might be expected and how would those funds be used?
The Board of Regents, which makes the decision on tuition, is going to have to wrestle with the question of whether we turn to students to make up the difference between the universities' needs and state funding. Tuition is about the only revenue source that we can use. If we use tuition to cover the shortfall and inflation, and pay for quality improvements, an increase approaching 10 percent might be needed. That amounts to 8 percent for the shortfall and inflation and 2 percent for quality improvements. This assumes that the state will resume its tradition of fully funding our salary policy.


How does current tuition at Iowa State compare with tuition at similar universities?
Our tuition is relatively low compared to our peer group. Under-graduate resident tuition and fees for FY2000 at Iowa State was $3,004. That's 21.6 percent below the average undergraduate resident tuition ($3,830) of our peer universities.


Did the Legislature appropriate money for buildings?
Iowa State will receive $11 million to upgrade the heating, ventilation and air conditioning system of Gilman Hall. The Legislature also appropriated $300,000 in planning money for the new Gerdin Business Building. Russ and Ann Gerdin of Coralville kicked off fund raising with a $10 million gift, we raised another $1.5 million privately and are asking the state for $10 million to complete the $21.5 million building. In addition, we have raised another $14 million privately for scholarships, professorships and programs.


Did the Legislature appropriate funds to operate new buildings, such as Howe Hall or the Palmer Building?
No. It's part of the shortfall in our operating budget.


Did the Plant Sciences initiative receive funding?
The Legislature and the governor appropriated $2.47 million in additional funds for the Plant Sciences initiative.


When we have made our $5 million in internal cuts, how will Iowa State feel or be different?
Our budgets will be tighter. Classes will be somewhat larger. There will be somewhat fewer faculty and staff. We don't yet know the numbers because we are working our way through that.


Do these reduced budgets become baseline budgets from which we negotiate FY2002 budgets?
Yes.


Do you anticipate more tough funding years ahead?
We have had relatively good years in the past. I hope that this year is an exception, that we will return to a pattern of better funding support. But there are no guarantees. It will depend in part on the continued health of the Iowa economy. It will depend in part on the priorities of our state leaders. And it will depend in part on our ability to make the case for additional investments in Iowa State.

While this was a difficult budget year, it was heartening to see so many different groups -- students, parents, alumni and other friends of the university -- express their concern and encourage our state's leaders to continue to provide adequate state funding for Iowa State. I believe they made a difference.

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Revis ed 05/18/00