Planning begins for mid-year budget cut

University leaders have begun planning for a state funding cut with less than six months remaining in the budget year that ends June 30.

In his adjusted budget released Tuesday, Gov. Terry Branstad proposed $110 million in reductions to the FY17 state budget, with the Board of Regents system absorbing the largest single cut, $25.5 million. That budget-trimming decision relied on the Iowa Revenue Estimating Conference, which at its October and December meetings forecasted state revenue shortfalls due mostly to a struggling agriculture economy.

Ultimately, the 2017 Legislature has the authority to make changes to the current state budget. Iowa State won't know the actual reduction assigned to the regents system -- or the university's share of that reduction -- until legislators take final action. A timeline for that discussion and decision isn't known yet.

"While we understand the concerns associated with the state’s tax revenues shortfall, it's unfortunate to have to make budget reductions midway through the fiscal year," said President Steven Leath. "I have been meeting with elected leaders this week to emphasize the critical role that state funding plays in meeting the needs of our students -- which has become even more important as our enrollment has grown by more than 23 percent over the past five years.

"We will continue to make this case as we engage with legislators through this process," Leath added.

Balancing the FY17 budget

Chief financial officer Miles Lackey said that Iowa State will use a variety of measures to balance this year's budget. These will focus primarily on:

  • Postponing nonessential deferred maintenance and repairs
  • Delaying some searches or eliminating vacant positions (personnel savings)
  • Reducing expenditures for professional development, equipment, travel, printing and communications (operating expense savings)
  • Reducing some campus-wide services temporarily

"Reductions that extend beyond the current fiscal year would require more systemic changes," Lackey noted. "Those plans would be developed through our annual budget planning process."

FY18 budget requests

Until the Legislature makes a decision on amending the current year's budget and clarifying Iowa State's base appropriations, Lackey said budget development for the year that begins July 1 is on hold.

Iowa State's top state funding priorities for FY18 remain a 2 percent across-the-board increase for operating support (which includes education, agriculture and economic development appropriations) and a multiyear commitment to a new facility for the Veterinary Diagnostic Lab at the College of Veterinary Medicine.

Incremental state support would help Iowa State lower its student-faculty ratio by recruiting and retaining faculty in high-enrollment and high-impact disciplines. It also would be invested in student-centered efforts such as academic success and health/wellness programming and financial literacy initiatives. Another priority is expanding Iowa State's online learning offerings and upgrading campus classrooms and laboratories.

Iowa State's lone facilities request to the Legislature this spring is a five-year funding commitment to replace the Veterinary Diagnostic Laboratory. As proposed, the $124 million, freestanding facility would be paid for with $4 million in university funds, $20 million in private gifts, and state support totaling $100 million ($20 million/year in fiscal years 2018-22).

FY18 is the third and final year of state funds for the two biosciences building projects, with a combined $23.5 million scheduled. It also is the second of five years of support, approved in 2015, for the Student Innovation Center; scheduled funding in FY18 is $9 million.