Inside Iowa State

Nov. 2, 2007

'Hybrid' work on FY09 budget is under way

Development of the budget for the next fiscal year started in October, a change for many units from the traditional budget process, which usually started in the spring.

"With the Resource Management Model, budgeting and planning now are nearly year round, and there will be overlap for different fiscal years," said Ellen Rasmussen, associate vice president for budget and planning. FY09 begins on July 1, 2008.

"The development of the FY09 budget will be a hybrid," Rasmussen said. It is being developed using a combination of the traditional incremental budgeting approach (for example, estimating the cost of salary and benefits increases or utilities increases) and some elements of the Resource Management Model (for example, tuition revenue projections for each college or indirect cost revenue projections).

Details of the budget development process are online in a series of new Web pages that begin at www.iastate.edu/~budget/buddev.shtml. This site includes a link to the Oct. 16 budget development launch memo from executive vice president and provost Elizabeth Hoffman to senior leaders of the university.

"The early outlook for revenue projections for FY09 is reassuring," noted Hoffman in the memo.

Looking ahead

The site also includes an outlook and timing for FY09 budget development, information on advisory committees, and preliminary planning parameters. Hoffman's first memo provides parameters for two cost categories: utilities and salary increases.

"Early indicators for the cost of purchased utilities and coal -- major components of the utilities cost structure -- suggest that overall costs could rise 3 to 4 percent for FY09," Hoffman noted.

On the salary increase side, the amount of funding that will be available will not be known for months. The advice from Hoffman is to plan for an institutional salary policy of between 2 percent and 4 percent for faculty and P&S staff.

"Each individual merit staff person will receive a 3 percent pay increase on July 1, 2008, and those who have not yet reached the top of their salary range will receive an additional 4.5 percent pay increase on their anniversary date," Hoffman wrote.

Hoffman said she expects to issue additional instructions for developing the FY09 budget every three to four weeks. Those also will be posted on the budget development Web site.

"With the Resource Management Model, budgeting and planning now are nearly year round, and there will be overlap for different fiscal years. The development of the FY09 budget will be a hybrid."

Ellen Rasmussen, associate vice president for budget and planning