Half of new dollars in next operating budget will bolster the student experience

Iowa State will invest about $23.5 million more this year – including $14 million in reallocated funds – in services and programs that enhance the academic and campus experience for students. Examples include:

  • Scholarships and financial aid
  • Employee hires that will expand course offerings and improve student advising
  • A a new vehicle for sponsoring student organization events
  • Further expansion of the campus wireless network
  • Faculty training in teaching methods that replace a portion of class meeting time with online instruction
  • Additional CyRide service
  • Classroom improvements

Earlier this week, President Steven Leath shared with his senior vice presidents budget details for the fiscal year that began July 1. At its Aug. 5 meeting, the state Board of Regents will be asked to approve the university's proposed budget.

Iowa State will invest another $10.3 million (nearly equal shares of new and reallocated dollars) in the university's other broad priorities:

  • Research and scholarly promotion, $4.9 million. Examples include faculty hires and related laboratory start-up costs, graduate student recruitment and retention, central support for research (Grants Hub).
  • Compensation increases for faculty and professional and scientific staff, $4.4 million. This includes both annual performance-based increases ($2.9 million) and salary adjustments for faculty promotions, P&S reclassifications, and retention adjustments related to a competitive job market ($1.5 million). University costs for employee insurance plans will remain unchanged.
  • A welcoming, safe and inclusive campus, $0.6 million. Examples include support for a student wellness program and a senior-level position for leading university diversity efforts.
  • Economic development in the state, $0.4 million. Examples include support for faculty positions that support Extension and Outreach service areas and for the office of economic development and industry relations.

Compensation increases for ISU merit employees covered by the state's contract with the American Federation of State, County and Municipal Employees (AFSCME) will cost about $1.2 million in FY16. And Iowa State will allocate about $2.2 million in new funds to cover unavoidable cost increases such as software licenses, property insurance, library acquisitions and placing ISU units in the second floor of campustown's Kingland building.

State support

On July 2, Gov. Terry Branstad signed many of the higher education appropriation bills from the 2015 legislative session, clearing the way for university officials to finalize a FY16 operating budget of $675 million, about 3 percent larger than last year's operating budget. Branstad vetoed one-time funding for the regent universities, including $2.3 million for Iowa State.

So, additional state dollars in the operating budget total $1.2 million for general university operations. All of the state appropriations for a specific university program or unit – for example, the Ag Experiment Station, Leopold Center and the Veterinary Diagnostic Lab – will remain at last year's levels.

While $1.2 million is far short of the estimated $6.3 million Iowa State stood to gain if the Legislature had supported the regents' request for a performance-based funding (PBF) model, Leath noted that the final appropriations, in their differentiation by university, represented the spirit of PBF.

"I am pleased the general assembly and Gov. Branstad recognize that demand continues to increase for an Iowa State University degree, reflected in our dramatic enrollment growth in recent years. Our growth is the reason that additional, recurring funding is necessary to maintain the high quality our students expect and deserve," Leath said.

"I thank members of the Iowa State community – on campus and around the state – for their diligent efforts this spring to promote the PBF model. It was a carefully prepared plan that, regrettably, did not receive legislative approval," he said.

Tuition revenue

About 90 percent of the $16.8 million in anticipated new revenue in the FY16 operating budget will come from tuition, in increases approved for all but resident undergraduates and due to a student body expected to exceed 35,000. Fall 2014 enrollment was 34,732.

But some tuition variables will remain in play into the fall. At the June regents meeting, board president Bruce Rastetter said that, due to the small increase to recurring state support for the universities (0.7 percent for Iowa State), the board could guarantee a tuition freeze for resident undergraduates only for fall semester. He said the board would revisit spring tuition levels for in-state undergraduates in October.

As of July 1, Iowa State is providing in-state tuition rates to all U.S. veterans, active military personnel and their eligible family members. The full impact of this change will be known by October when fall enrollment is complete.

The bigger picture

The budget for the total university enterprise for the year that began July 1 is a proposed $1.4 billion, up nearly 6 percent from a year ago. In addition to the operating budget, it features $726 million in restricted budgets, which include sponsored research, private gifts, endowment income, building projects, sales and services, and auxiliary units such as athletics, residence, printing, parking, recreation services, bookstore, Reiman Gardens, Iowa State Center and the Memorial Union.