Inside Iowa State

July 19, 2007

Salaries, student financial aid receive new dollars in proposed FY08 budget

by Anne Krapfl

Faculty salaries and undergraduate student financial aid are top priorities in the proposed FY08 budget Iowa State will submit to the Board of Regents, State of Iowa, next month for final approval. The new fiscal year began July 1.

Iowa State officials propose to use about $6.1 million for annual faculty salary and benefit increases and about $5.3 million for targeted salary increases to boost ISU's competitiveness in the higher education marketplace. They also propose to use about $780,000 this year to create seven targeted faculty positions, three of which will be in the broad area of biorenewables. The other four will help strengthen high-demand disciplines in the colleges of Agriculture, Business and Engineering.

And Iowa State will commit more than $3.5 million in new revenues to undergraduate financial aid, significantly more than required by the regents tuition set-aside policy.

"Financial aid is a critical tool to maintaining our undergraduate enrollment," said president Gregory Geoffroy. "A review of several scholarship programs that have been very successful in the past revealed that award levels were not keeping pace with our recent tuition increases.

"To ensure the continued effectiveness of those programs, an increase in funding was necessary," he added.

Incremental increases

Including state appropriations, tuition and fees, interest income on university investments and administrative fee income, Iowa State has about $33.7 million in new, recurring dollars to distribute in its proposed FY08 budget. A 1 percent internal reallocation brings the total to $37.5 million. This compares to $20.25 million in new funds a year ago, of which just $8.2 million were recurring state appropriations or tuition.

"We're pleased with the strong support for public higher education shown by Iowa legislators and Gov. Culver this spring," Geoffroy said. "Given our goals for improving the competitiveness of faculty and staff salaries, the internal reallocation of funds was required to make more progress in that area," he said.

Iowa State also will receive $1.5 million in new state operating revenues this year that are required by legislative actions to be used for specific needs: $1 million to modernize equipment and services at the Veterinary Diagnostic Laboratory, and $250,000 each to re-open a Small Business Development Center in Sioux City and apply toward establishing an endowed chair bearing George Washington Carver's name.

And differential tuition in the colleges of Veterinary Medicine and Engineering, estimated at about $1.3 million, will support facility upgrades and more faculty positions.

Including the new revenues, the proposed General Fund budget this year totals $483.1million. The total university enterprise -- including federal appropriations, private grants, the Ames Laboratory and auxiliary units such as athletics, residence, dining and printing -- is supported by a budget that surpasses $1 billion ($1.07 billion) for the first time.

Spending plans

Since last August, Geoffroy has emphasized three goals for the FY08 budget: receive recurring funds for ongoing basic expenses covered last year with one-time funds, provide faculty and staff salary increases to make Iowa State more competitive among its peers, and fund initiatives that achieve progress on the 2005-10 strategic plan.

In addition to the plans outlined above, here's how university leaders propose to use large pieces of the new, recurring funds in FY08:

• $7.9 million to permanently fund FY07 expenses that previously were covered with one-time funds.
• $4.7 million and $2.5 million for compensation increases for P&S and Merit staff, respectively.
• $2.9 million for various campus facility needs, including rising utility costs and utility improvements, maintaining newly opened buildings and replenishing a building repair fund depleted in recent lean budget years.
• $2 million to replenish the Institutional Excellence Fund, also diminished in the last two years due to low state funding levels.
• $0.7 million for graduate student scholarships and Vet Med student financial aid.
• $0.5 million to keep up with inflation on library journal costs and avoid canceling subscriptions this year.

Building plans

The 2007 Legislature also approved appropriations for specific facility needs at Iowa State. These are not recurring operating funds, but they include:

• $5.6 million for a biorenewables research lab facility (first of three installments that will total $32 million)
• $0.6 million for infrastructure improvements at the Veterinary Medicine Diagnostic Laboratory

Additionally, the regents received the authority to sell up to $53.9 million in revenue bonds for a chemistry building at Iowa State.

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FY08 proposed operating budget (in millions)

New revenues
Tuition and fees (gross)	$ 9.20
State operating appropriation	$11.40
State salary appropriation	$15.90
Miscellaneous (investment interest, admin. fee)	$0.60
Indirect cost recovery	--$0.90
Targeted new state appropriations
Vet Diagnostic Lab (operations)	$1.00
GW Carver endowed chair	$0.25
Reopen SBDC regional center	$0.25
Internal reallocation	$3.70
TOTAL	$41.40

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New expenditures
Salaries/benefits	$19.00
Student financial aid, scholarships	$3.50
Academic priorities*	$4.10
Facilities and utilities	$2.90
Administrative infrastructure**	$0.50
FY07 costs on non-recurring funds	$7.90
Institutional Excellence Fund	$2.00
Targeted new expenditures
Vet Diagnostic Lab (operations)	$1.00
GW Carver endowed chair	$0.25
Reopen SBDC regional center	$0.25
TOTAL	$41.40

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* New faculty positions, student retention initiatives, faculty retention, library journals

**Software licenses, attorney general fees, board costs, budget model implementation

The total university enterprise -- including federal appropriations, private grants, the Ames Laboratory and auxiliary units such as athletics, residence, dining and printing -- is supported by a budget that surpasses $1 billion ($1.07 billion) for the first time.