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June 8, 2001

Budget shortfall will cost 180 positions
About 30 ISU employees will face layoffs

by Diana Pounds
An $18.4 million budget shortfall next fiscal year (FY02) will cost Iowa State approximately 180 positions, says interim President Richard Seagrave. Most of those positions currently are open, but approximately 30 ISU employees will be laid off.

The position cuts are just part of the belt-tightening. An ambitious energy conservation plan is under way. An extended winter break shutdown is in the works (although a proposal to require involuntary furloughs has been dropped). Approximately 45 graduate assistantships will be discontinued. And half of a tuition hike, originally earmarked for other purposes, will be applied to the shortfall.

The latest shortfall comes on the heels of an $8.5 million budget shortfall for the current year (FY01) that resulted in the loss of more than 50 positions. "That has reduced our ability to deal gracefully with this budget crunch," Seagrave said.

"It ultimately forces us to either become smaller or more expensive. We're either going to have to reduce the range of the programs that we offer or we're going to have to dramatically increase costs to our students."

Iowa State's operating budget for the fiscal year that begins July 1 is about 6 percent leaner than the current operating budget. The $18.4 million shortfall includes a $15.7 million reduction in operating funds from the state and $2.7 million in under-funded employee health insurance costs that took effect last February.

Half of the shortfall will be handled centrally, using additional revenue from the tuition hike and higher recovery of indirect costs on research grants, and savings from energy conservation efforts.

"We did everything we could centrally to reduce the damage to the academic structure of the university," Seagrave said. "Departments couldn't afford a 6 percent cut without taking out programs."

However, academic and other units must absorb the remaining 3 percent of the budget cut by reducing people, supplies and services. Extension and the Agriculture Experiment Station "will take an even larger hit of 4 to 5 percent," Seagrave said. "In Extension, the cuts will force the closing of some area offices, charging user fees for some previously free services and increasing contract and grant activity."

Position cuts
Of the 30 layoffs, approximately half will be Professional and Scientific (P&S) staff and the remainder, Merit staff. No faculty layoffs are planned.

"Good Iowa State employees are going to lose their jobs," Seagrave said. "We're very sorry about that and will do everything we can to help them find new employment."

In addition to layoffs, another 150 vacant positions will not be filled. Of the total 180 positions lost through layoffs or unfilled slots, approximately 70 are faculty positions, 60 are P&S positions and 50 are Merit positions.

Using the tuition increase
"When the 9.9 percent increase in tuition and fees was approved last year, we made commitments to our students that I have tried very hard to keep," Seagrave said.

Those commitments were to put funding into over-enrolled classes; to protect library materials, information technology and diversity recruiting efforts from budget cuts; and to make the campus safer.

"Because of the budget shortfall, we can't apply all of the tuition and fee increase to these commitments," Seagrave said, "but we will put half of the increase into them. For example, we're doubling the funds (to $1 million) to alleviate over-enrolled classes."

Winter shutdown
A proposal to furlough employees for four to five unpaid days over winter break has been dropped. However, officials still hope to encourage faculty and staff to take an additional four days off over the break, so that utility use can be reduced and energy savings realized. The goal is to net $250,000 in energy savings over the break. Vice provost Howard Shapiro will lead a task force to develop employee options for a winter break, Seagrave said.

Energy conservation
Iowa State officials hope to save as much as $1.5 million through extensive energy conservation efforts next year. Facilities staff turned thermostats up to 78 degrees throughout campus this week to save on air conditioning costs. In coming weeks, they will develop detailed energy conservation plans for individual buildings. Officials have called on the campus community to participate in the conservation effort by turning off equipment and appliances, and those efforts appear to be paying off. (See story on this page.) The bad news, Seagrave said, is that the price of coal (which Iowa State uses to fuel its power plant), has risen 13 percent. Next year's coal bill is up by $750,000.

Funding for athletics
Among the indirect casualties of the poor budget year is the university athletic program, Seagrave said. When the ISU athletic department's budget woes forced the elimination of baseball and men's swimming, the university was unable to even consider providing additional funding to athletics, due to the tight budget. Seagrave added that most Division I athletic programs in the country receive some support from their universities. (ISU's program currently receives about $2 million from the university, mostly for scholarships for female student-athletes and salary support for coaches of women's teams, and about $1 million in student fees.)

Time to refocus
As budgets drop, Iowa State "undoubtedly will go through a period of continual reallocation," Seagrave said. "We're trying to protect undergraduate education and we're trying to protect our research niches, such as the plant sciences initiative.

"This is an opportunity for us to refocus, get tougher and shift resources," he added. "But it has to be done in the context of the strategic plan, it has to take some time and it has to have a lot of participation to get people to buy in."

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