Tuition increase bolsters operating budget

Pie chart showing source of Gen Fund revenue

Iowa State's $748.1 million operating budget for the fiscal year that began July 1 includes $25.4 million in new revenue, an increase of about 3.5% over last year's General Fund budget. Most of the increase comes from increased tuition ($21.8 million). Additional state appropriations ($2.1 million) and additional recovery of research-related indirect costs ($1.5 million) are the other two pieces.

The state Board of Regents approved university FY23 budgets and the new tuition and fee rates at its July 27 meeting.

Tuition and fees, estimated at $476.5 million, make up nearly two-thirds (64%) of the revenue in the FY23 operating budget, with state appropriations ($231.5 million) providing nearly a third (31%).

In addition to new revenue, the FY23 operating budget will rely on $6.6 million in reallocations to cover additional costs, said associate vice president for institutional financial strategy Bonnie Whalen. New dollars will be invested in financial aid, student physical and mental health resources, disability accommodations, a welcoming campus environment, salary increases and other strategic initiatives.

Priorities for FY23 new and reallocated revenue

Salary and benefits*

$18 million

Student financial aid

$6.3 million

Annual cost increases**

$2.6 million

New/strategic initiatives

$4.4 million

Instructional costs***

$0.7 million


$32 million

*Includes performance increases, faculty advancement, Merit contract requirements, P&S review market adjustments
**Examples: Insurance premiums, software licenses, City of Ames contracts
***Incremental differential tuition sent to the colleges


Big-picture budget

Iowa State's overall FY23 budget is its largest ever, $1.6 billion. The other part of the university's budget, $857.9 million in restricted budgets, also is higher, about $13.1 million (1.5%), from a year ago. This side of the budget includes sponsored research, endowment income and auxiliary units such as athletics, residence, printing, parking, utilities, recreation services, the bookstore and other units that don't receive state funds.

The restricted budget also includes building projects. Iowa State will receive previously approved state appropriations for two key facilities. The 2022 Legislature altered the timing of state funding for one and left alone a scheduled final appropriation in FY23 for another:

  • $28.6 million for Veterinary Diagnostic Laboratory phase 1 construction, to complete the state's $63.5 million commitment to this project one year early. It includes $12.5 million awarded by the 2020 Legislature for FY23 and $16.1 million scheduled for FY24.
  • $2 million for construction of the Student Innovation Center, completing the state's seven-year, $40 million support of the project.