Funding for salary increases not apparent in early proposals

In budget recommendations released by Gov. Terry Branstad last week, Iowa State would receive some of the additional state funding it requested for the fiscal year that begins July 1. Branstad's FY14 budget proposal includes for Iowa State:

  • The requested 2.6 percent increase ($4.4 million) to operating funds (general university only; units receiving a direct appropriation, such as the Ag Experiment Station, would be held at current funding)
  • Half of the requested $7.5 million for new initiatives in the bioeconomy
  • A share of $5 million (of the requested $39.5 million for all three regent universities), for a state-funded, need-based financial aid program for resident undergraduates
  • A share (estimated $1.05 million) of the $3 million Regents Innovation Fund to support economic development activities

Not in the governor's FY14 budget proposal is $5 million Iowa State requested last fall to begin planning for a biosciences building.

Tuition revenue less certain

In recent years, tuition revenue growth -- bolstered by rising student enrollments -- has helped offset meager or no state funding increases. In December, the state Board of Regents approved flat tuition rates next fall for resident undergraduates – about 55 percent of Iowa State's total student body – and modest increases ($92 to $462) for nonresident undergrads and all graduate students, which will curtail growth in that revenue stream. Board members have said they'd reduce tuition rates next fall for resident undergraduates if the state financial aid program is funded.

Additional funds for higher education in the governor's budget proposal is encouraging, said Dave Biedenbach, assistant vice president for financial planning and budgets. A key uncertainty at this point is how the university will fund salary increases.

"Salary increases for faculty and staff is a priority," he said, "but given the current revenue and cost projections, it's going to be a challenge to fund salary increases at a level that will keep our salary levels competitive."

It's unlikely that new operating revenues from the state could be used entirely for this purpose, he said, since there are programming needs and unavoidable annual cost increases to be covered. University employees haven't been included in the state salary bill since FY09 and inclusion this year may be a long shot, Biedenbach said.

Tuition dollars, if the projected enrollment for fall continues its upward trend, could provide a funding option. Reallocation of existing budgets – used in past years to partially fund salary increases – may be another option, Biedenbach said.

President Steven Leath also spoke briefly about salary increases during his Jan. 18 monthly gathering with leaders from across the university.

"We're paying a lot of attention to this. It's a huge issue for Iowa State," he said.