Tuition revenue fuels budget growth

Projected fall enrollment growth and tuition increases are fueling an increase in the general university operating budget. For the fiscal year that began July 1, the budget is expected to grow about $41.4 million (5.7%), to $766.8 million. 

The annual state appropriation for general university operations, $178.4 million, is unchanged from last year. State funds cover 23.3% of revenue in the general university operating budget this year, down from 30.3% a decade ago. Tuition accounts for 73.4% of revenue in the general university budget.

The Iowa Board of Regents approved university budgets at its July 30 meeting.

"We're excited about the enrollment growth and the opportunity that brings," said Bonnie Whalen, associate vice president for financial planning and analysis. "Our university is very service-oriented and does an amazing job of being efficient while still delivering a quality education to our students and fulfilling our mission."

The new dollars will be used to advance university priorities, including:

• Salaries, including annual increases, promotions and health insurance increases
• Student financial aid
• Cost increases to software licenses, fire protection contract, property insurance, student recruitment, building maintenance and operations including utilities

Whalen said more than $10.2 million in reallocations from various sources will help meet the full cost of these priorities.

New state support is in directed appropriations

About a dozen Iowa State units or programs receive their own appropriations from the state, totaling about $62.3 million this year. Examples include the Ag Experiment Station, Veterinary Diagnostic Laboratory, the state biosciences innovation platforms and Center for Industrial Research and Service. New state funding for FY 2026, about $1.7 million, is for several of these units:

• $1 million for the Ag Experiment Station to leverage external funding.
• $299,898 for Veterinary Diagnostic Laboratory (VDL) operations.
• $50,000, a new appropriation, to Cooperative Extension for a study on the ability of the "Choose Iowa" food program to serve rural grocers.

One-time appropriations from the state will provide:

• $250,000 to the VDL for phase 2 equipment and moving expenses.
• $100,000 for livestock disease research in areas of importance to livestock producers.

Big picture

Iowa State's overall FY 2026 budget is $1.75 billion, an increase of about $37 million from last year. In addition to general university funds and directed appropriations, it includes restricted funds. 

As the largest section of the total budget, restricted budgets include auxiliary units, for example, athletics, residence, student health center, recreation services and campus utilities; as well as activities whose funding is limited to a specific purpose, such as building projects, sponsored research, student fees, private gifts, fees for services and endowment income. These total $914 million in FY 2026, a decrease of $5.7 million from last year. While strong enrollment will positively impact some revenue streams, and the athletics budget is nearly 25% larger due to several significant changes, a reduction in budgeted federal revenue in the restricted funds budget reflects uncertainty about federal funding. Whalen said the budget team worked with the research leadership team on multiple federal funding scenarios to be ready for potential impacts this year.

Assembling the ISU budget