Inside Iowa State

May 28, 2009

Budget leaders announce plans for 70 percent of federal stimulus funds

by Anne Krapfl

From $114 million in proposals, executive vice president and provost Elizabeth Hoffman last week announced plans to allocate to colleges and divisions nearly $21.4 million in federal American Reinvestment and Recovery Act (ARRA) funds, to be spent in the year that begins July 1. The ARRA funds are one-time dollars that have to be spent by June 30, 2010.

Another $257,000 in ARRA funds was designated for additional student work study and $212,700 for temporary staffing to manage the ARRA funds. Budget leaders are delaying a decision on the last $9.7 million for a month or two. Those dollars will be allocated this fall when they have a clearer picture of: the number of employees choosing the retirement incentive option, fall enrollment, and generally how the transition is going in a year of substantial changes prompted by a $38.3 million reduction in state appropriations to Iowa State.

Like the state cuts this spring, the federal stimulus dollars were not distributed across the board among ISU units. Rather, Hoffman distributed them differentially, based on individual needs for transitioning to lower funding levels and on strategic priorities. Vice presidents and deans are distributing the stimulus dollars based on the priorities they identified in their proposals. University leaders expect to receive nearly $31.6 million in one-time federal stimulus funding for FY10.

Changes stay on track

The federal stimulus dollars will not cancel the changes and losses unit leaders anguished over earlier this spring when state funding cuts were certain and one-time federal aid was not, said Ellen Rasmussen, associate vice president of budget and planning.

"The decisions and transitions leaders plotted out will keep going; they need to keep going," she said. "These federal stimulus dollars give us the resources -- or in some cases, the time -- to carry out the changes."

Rasmussen and other university leaders frequently use the term "backfill" in their discussions about the federal ARRA funds. In all cases, it implies a temporary solution to a more permanent change.

For example, federal stimulus dollars will be used to:

• Pay costs such as accrued vacation and sick leave or benefits for employees who choose the retirement incentive option or whose positions are eliminated
• Buy time for units to identify the best solution to providing a program or service with leaner budgets
• Buy time for units to identify and further develop alternative funding sources for programs or positions
• Pay salaries and benefits for part of FY10

Rasmussen said central budget leaders don't know yet how many positions will be affected by budget reductions in FY10. How federal stimulus dollars ultimately are used could keep that figure in flux for some time.

Earlier this month, president Gregory Geoffroy identified these priorities for use of the stimulus dollars:

• Protect educational programs
• Protect jobs as much as possible
• Continue key program areas during a search for replacement funding

Incremental growth in the FY10 budget

The proposed FY10 budget is smaller than the FY09 budget both at the beginning and end of the fiscal year. However, there are some new dollars in FY10 for Iowa State. They include:

• Estimated increases of $22.5 million in tuition revenue and $600,000 in indirect cost revenue
• $238,000 state appropriation for the Midwest Grape and Wine Institute
• $667,000 state appropriation for the veterinary diagnostic lab
• $15 million in bonding authorization for phase 2 improvements at the Vet Med campus

Timeline

At the state Board of Regents meeting June 10-11, Geoffroy will summarize Iowa State's proposals for meeting the revenue cuts and spending the federal stimulus dollars. The regents will be asked to approve a final, detailed FY10 budget at their Aug. 5 meeting.

Allocation of ARRA funds in FY10

Colleges: $12,213,886
	Ag/Life Sciences	$2,447,045
	Business	$711,750
	Design	$1,124,317
	Engineering	$2,381,000
	Human Sciences	$1,473,941
	LAS	$1,896,695
	Vet Med	$2,179,138
Vice Presidents: $7,820,775
	Business/Finance	$1,251,985
	Extension/Outreach	$3,370,000
	Provost	$768,290
	Research/Ec. Dev.	$900,000
	Student Affairs	$1,530,500
IT Services		$490,953
Library		$357,361
President		$526,000
SUBTOTAL		$21,408,975
Institutional priorities: $469,700
	Temp. staffing: ARRA	$212,700
	Student work study	$257,000
For fall allocation		$9,717,277
TOTAL		$31,595,952

University officials have decided where about $21.9 million in federal stimulus dollars is headed. They will announce plans on the remaining $9.7 million early this fall.