Inside Iowa State

June 11, 2004

Salaries top budget priorities

by Anne Krapfl

Iowa State's top funding priority for the fiscal year that begins July 1 is 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.

FY05 cost of compensation increases (salary and benefits, unless noted)
Faculty Faculty (promotion increases) P&S Merit Grad assistants Summer session (salaries) Total	$3.83 million $0.17 million $2.37 million $2.44 million $0.66 million $0.07 million $9.54 million

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 the Lakeside Laboratory in Okoboji. The proposed FY05 general fund budget is $422,510,553, about $3.8 million leaner than this time last year.

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.

Proposed FY05 operating budget
Additional revenues
Tuition and fees Indirect cost recovery Administrative fee increase Subtotal Spring 2% reallocation Total	$1.91 million $2.25 million $0.75 million $4.91 million $8.51 million $13.42 million

New expenses
Faculty and staff compensation (includes salary increases and employer's share of health and dental care increases)	$9.54 million
Planned cost increases	$3.88 million
Total	$13.42 million

New revenues and reallocated funds

New revenues to the FY05 operating budget total $4.9 million and include:

• $1.9 million in additional tuition revenue, the result of a tuition increase but coupled with a fall 2004 enrollment that is projected to be 1,000 fewer students than a year ago.
• 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 such as payroll, purchasing and intramural processing. The 2 percent rate went into effect last July 1, and was scheduled to jump to 3 percent on July 1.

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

As first announced in April, there are no new funds coming from the state for either FY05 operating expenses or employee salary 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). Funds for student financial aid were exempt from cuts in FY04 and in planning for FY05.
• Library materials, $550,000
• Custodial care, utilities and maintenance for new facilities (Gerdin, Hoover and the Vet Med 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

Removed from the budget since April was a plan to restore $500,000 to the university's building repair fund.

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. That cut was spread across the university like this:

President units Business and finance Student affairs Academic affairs General university Direct appropriation units*	$322,284 $1.27 million $373,146   $5.47 million $1.08 million
* Ag Experiment Station, Cooperative Extension, Leopold Center, livestock research, IPRT, SBDC, ISU Research Park

The result this summer and fall will be noticeable in things such as fewer employees and fewer course sections offered -- and in many cases, larger sections. The Provost Office has calculated that 528 fewer course sections will be offered at Iowa State during the 2004-05 academic year, translating to nearly 13,000 fewer classroom seats available to students. Some of those seats (an estimated 4,000) 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 negatively impacted about 118 FTE university positions and eliminated another 40 half-time graduate assistantships. Thirty-eight vacant tenure-eligible faculty jobs have been cut in the last year. In addition, nearly 21 filled staff positions are eliminated (9 P&S and an estimated 11.75 merit). Until the merit "bumping" process is complete, the actual number of merit employees without work can't be tallied. The funding for another 27 positions, 20 of which are P&S, will be shifted to non-general fund dollars.

FY04 FTE positions reduced or shifted to other funding sources
	Tenure-eligible faculty	P&S	Merit	Grad Asst.
Vacant positions eliminated	38	14	9	40
Layoffs	0	9	11.75	0
Reduced-time positions	1.2	2.3	6	0
Shifted to other funds	2	20	5	0
Total	41.2	45.3	31.75	40

Iowa State's top funding priority for the fiscal year beginning July 1 is to increase the salary and benefits package for faculty and professional and scientific employees by $7.1 million through internal allocations.