Inside Iowa State

May 24, 2006

Surcharge proposal could bring $4.33 million to Iowa State

by Anne Krapfl

Iowa's three regent universities aim to generate additional revenue for the 2006-07 year with a $100 per semester, per student surcharge. The Board of Regents, State of Iowa, will act on the proposal during a special meeting June 20 on the Iowa State campus. If approved, the surcharge would be added to student accounts for fall and spring semesters next year (prorated for part-time students). It would be applied to on-campus students only; off-campus students enrolled in distance education programs would not pay it.

The surcharge is a temporary, one-year proposal. It's not considered tuition, but rather an energy/environment surcharge. To put the surcharge proposal in perspective, tuition for resident undergraduates is going up $113 per semester next year.

If approved, the surcharge would generate an estimated $4.33 million for Iowa State for the 2006-07 budget year. The largest portion of it, about $2.96 million, would pay for fuel and utility cost increases next year. Other key uses include opening new buildings ($606,000), meeting rising costs of library acquisitions ($500,000) and helping to cover compensation increases mandated for Merit staff ($170,000).

Without the surcharge, Iowa State would have to make cuts this summer to arrive at a balanced budget for FY07.

The surcharge proposal comes in response to state appropriations for Iowa State next year that include just $4.4 million in recurring funds for operating expenses. About $22.6 million in state support will be one-time funds or funds with restricted uses -- such as new building planning or economic development effort.

"Although we appreciate the one-time appropriations, they don't provide the ongoing base funding that we must have to achieve excellence in our faculty ranks, our classrooms and our research endeavors," said President Gregory Geoffroy. "We need ongoing support that, at the very least, keeps pace with inflation."

Energy conservation, buildings moratorium

In tandem with the surcharge for students, the universities will pledge to work together, involving students, faculty and staff, to identify ways to reduce energy consumption. And the regents will make no requests for state funding for campus buildings for three years. The proposed moratorium on new building funds would exclude:

• Projects already receiving some state dollars (such as Gilman Hall)
• Projects resulting from economic development initiatives
• Projects for which significant private funds already are in place (such as a new building for the department of agriculture and biosystems engineering)

The regents finalized tuition and fees for 2006-07 last December, keeping increases to a moderate 4 percent as outlined in the two-year-old regents plan for transformation. Resident undergraduates will pay $5,680, before the surcharge; non-resident undergraduates will pay $16,354.

Long-term strategies for raising revenue are expected to be part of the regents' discussions on tuition and mandatory fees this fall.

"Although we appreciate the one-time appropriations, they don't provide the ongoing base funding that we must have to achieve excellence in our faculty ranks, our classrooms and our research endeavors."

President Gregory Geoffroy