Inside Iowa State

March 13, 2009

FY10 budget planning

Target for cuts rises to 11 percent

by Anne Krapfl

The latest reduction target in budget planning for FY10 is $30.6 million --- an 11 percent cut in state funding. This includes making permanent the $7.2 million in one-time reductions to the current budget. Associate vice president for budget and planning Ellen Rasmussen talked about the evolving budget for the next fiscal year during a campus forum in the Memorial Union March 5.

Rasmussen noted that nothing is final until the 2009 Legislature approves the FY10 state budget and adjourns by May 1, but the new reduction target is based on information from that body's education appropriations subcommittee. All budget subcommittees have been asked to cut at least one point beyond the previous target of 9 percent.

One key variable in the FY10 budget development will be the state revenue update that comes out of the quarterly Revenue Estimating Conference on March 20. A second potential variable --- federal stimulus funds destined for Iowa --- has been removed from the equation. Rasmussen said Gov. Chet Culver decided that planning for the budget year that begins July 1 won't be altered by possible stimulus dollars.

Strategic cuts

Rasmussen said FY10 reductions will not be across-the-board, but differential and reflective of strategic priorities. The goal is to forward reduction targets to units by April 1. Iowa State has to provide a preliminary FY10 budget to the state Board of Regents at its April 29 meeting, and a final budget at the June 10 meeting.

In response to specific questions, Rasmussen offered this insight into the budget development process:

• Budget leaders are looking for consistency in policy on meeting the reduction in state funding, rather than unit-by-unit proposals, no matter how well intended they are.
• Reduction concepts that are not being discussed yet at Iowa State are: across-the-board salary reductions and a university-wide compressed workweek.
• There is discussion about bringing back an early retirement program, which regent universities currently don't offer. Rasmussen noted that the board prefers some consistency among the three universities, so landing on a proposal likely would require more time and negotiation.
• While regent policy would allow it, there has been no discussion yet of requesting tuition increases for next year beyond the increases approved by the board in December.
• The nine strategic budget planning teams formed in December continue their work to identify cost savings or revenue-generating proposals. Most of the proposals cut across budget and organizational lines and probably would involve several years to fully implement. Emerging proposals focus on consolidating some IT services, adjusting teaching loads and class sizes, modifying administrative structures within departments, and modifying the employee benefits offerings. Others are yet to come. Rasmussen said a proposal to make some university cost-saving changes to employee benefits will be presented to the board of regents when it meets next week in Iowa City.

FY10 budget reductions will not be across-the-board, but differential and reflective of strategic priorities.