Inside Iowa State

Aug. 10, 2006

Geoffroy: FY08 budget has a hole that needs to be filled

by Anne Krapfl

As leaders begin to build its budget for the year that begins next July 1, Iowa State will need nearly $26 million in new funding just to stay even, President Gregory Geoffroy told the Board of Regents, State of Iowa, during its Aug. 9 meeting.

Geoffroy offered his comments as the board gave final approval to FY07 budgets.

"We have a large amount of recurring budget items that are funded on one-time funds," he said. "That creates a huge problem as we move forward. We're starting the next year with an $8.4 million deficit in our basic operating budgt."

And it gets worse.

Geoffroy estimated that the cost of presenting what he termed "reasonable" salary increases to faculty and P&S staff next summer would be about $9.7 million. The estimated cost of providing salary increases that would help raise ISU faculty and staff salaries to the mean among peer universities (as is the goal by 2010) is $17.1 million. Another $2 million would be needed next year to pay salary increases to merit employees as called for in the AFSCME contract.

Finally, general inflationary cost increases in FY08 are an estimated $5.8 million, he said. This brings the total in new funding needed next year just to break even and cover recurring costs with recurring funds to between $25.9 million and $33.6 million, Geoffroy told the regents.

"I wanted to put this year's budget into context as we move toward the next budget cycle," he concluded.

FY07 budget set

The board approved Iowa State's FY07 budget. Highlights in it include:

• $8 million in new state dollars to help cover rising operating expenses. However, only $4.4 million of that is recurring funding (or about a 1.86 percent increase over this year's recurring state funding).
• Other sources of new operating funding are: additional tuition and fees of $3.8 million (recurring), student energy/environment surcharge income of $4.35 million (one time), internal reallocations of $4.1 million (recurring).

New dollars in the FY07 budget with a restricted use are:

• One-time building funds totaling $8 million to: plan an addition to Gilman Hall ($5 million), renovate the Veterinary Diagnostic Lab ($2 million) and build a protein processing plant ($1 million).
• $8.4 million to implement recommendations in the 2004 Battelle Report on development opportunities in the biosciences (first of an expected three years).
• $1.925 million (year 2 of a planned 10 years) from the Grow Iowa Values Fund to spur economic development efforts.
• $50,000, to support a water quality research project.

Other items

In other business, the board:

• Approved a 5 percent salary increase for Geoffroy. His new salary, retroactive to July 1, is $323,316. The board also directed Iowa State to put an additional $15,000 per year for the remaining four years of a five-year deferred compensation package for Geoffroy. Since July 2005 Iowa State has been putting $5,000 each month in an account. Geoffroy will receive the deferred compensation if he remains president at Iowa State through January 2011.
• Approved a new B.S. degree in business economics at Iowa State. The intent is to offer a program that connects the two academic subjects. It will be a degree from the College of Business (which will provide core courses). The major will be located in the economics department (LAS college), which will provide advanced courses. First-year enrollment is projected at 20, with 50 students anticipated by year four.

"We're starting the next year with an $8.4 million deficit in our basic operating budget."

-- President Gregory Geoffroy