Inside Iowa State

June 11, 2009

FY10 budget changes may begin; final approval set for Aug. 5

by Anne Krapfl

While final approval of budgets won't come until August, the state Board of Regents expressed no objections June 11 to Iowa State's proposed FY10 budget. Board president David Miles gave president Gregory Geoffroy the green light to begin to implement changes needed to meet the reduced budget, including the process of notifying employees whose positions will be eliminated.

The proposed budget Geoffroy summarized for board members largely mirrored what he shared with them in late April. Key numbers include:

• A $38.3 million reduction in state appropriations, compared to initial FY09 appropriations
• $9.3 million in unavoidable cost increases (such as utilities, required salary increases for unionized employees, salary increases accompanying faculty promotions, costs to use new buildings)
• $22.5 million in new tuition revenues (about 25 percent of which will be used for additional student financial aid)
• $31.6 million in one-time federal ARRA (American Recovery and Reinvestment Act) funds

Priorities protected in differential cuts

Geoffroy said the state appropriation cuts will be distributed differentially to university units, with administrative units taking proportionately larger cuts than academic units. Among the colleges, Business, Design and Human Sciences will absorb proportionately larger reductions than the colleges of Liberal Arts and Sciences, Veterinary Medicine, Engineering, and Agriculture and Life Sciences. Geoffroy said it's too early to say how many positions will be lost. When pressed for an estimate, he said Iowa State would have to eliminate 40 to 100 P&S and Merit staff positions initially. That estimate includes projected staff changes in ISU Extension's reorganization plan.

Geoffroy said variables to a final number include employees who still may choose the retirement incentive option (the deadline is June 30), and how the Extension restructuring ultimately affects jobs. To date, university officials have approved 110 requests for the retirement incentive option.

Depending on how units apply their ARRA funds, other position losses are possible throughout the year, he said. Iowa State will use a minimum of $4.5 million in ARRA funds -- and likely more -- to cover partial year salaries and severance expenses (accrued vacation payouts, benefits) associated with eliminated positions and the retirement incentive option. And part of the $3.4 million in ARRA funds allocated to ISU Extension will serve the same purpose.

Geoffroy said the university also will experience a reduction in graduate assistant numbers.

Through all the budget planning, items on the university's protected list include:

• Educational programs and the undergraduate experience
• Jobs
• Highest ranked departments
• Research with a high impact on Iowans

Extension update

Vice president for extension and outreach Jack Payne summarized his month of public meetings around the state designed to explain and receive feedback to the ISU Extension restructuring announced April 30.

Payne said a typical meeting started with some hostility from local participants and ended with an understanding -- and in some cases, approval -- of the restructuring. Iowans are concerned about the future of the 4-H program (Geoffroy said it will remain a very strong program) and the availability of extension services in rural Iowa. Payne said Iowans also see the wisdom of the restructuring plan in these tight economic times.

Payne said interviews for the 20 regional director posts have begun, with 11 of the 20 directors selected. In response to a question about the size (up to nine counties) of some of the southern regions, he said the regions were set to equally distribute local property taxes, which fund the local extension councils. To make any of the regions smaller diminishes the resources available for programs.

Payne said to date, 46 Extension employees, including 25 county directors, have elected to participate in the retirement incentive option. He anticipates both numbers will grow significantly by the end of the month. He noted that some county directors are being hired back by the county extension council on a part-time basis.

"We think that's a good thing. There's a lot of expertise out there," Payne said.

Iowa State officials built the FY10 operating budget by first incorporating into it $38.3 million in state funding cuts and $22.5 million in anticipated new tuition revenues, and then backfilling with $31.6 million in one-time federal stimulus funds.

An alternative teacher license program, accreditation reports, honorary degrees and fall student housing in Wilson Hall were other ISU items in front of the state Board of Regents June 11. Story.