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Release: June 15, 2000

President Coleman discusses UI budget at June Regents meeting

IOWA CITY, Iowa -- University of Iowa President Mary Sue Coleman discussed progress in developing the FY2001 budgets for the university Wednesday at the Board of Regents, State of Iowa meeting at West Lake Okoboji.

"The university has significant budget challenges that it must address in next year's budget," Coleman told the regents.

Coleman said the funding problem includes a base operating appropriations reduction, salary underfunding, inflationary cost increases, cost of opening the new biology building, engineering expansion and the University Services Building, as well as offsetting a loss in state funds used for operating support of the National Advanced Driving Simulator (NADS).

Coleman also discussed the specifics of what the university will do to address the budget shortfall. "This is a year of reexamination, and all budget decisions will be prudently made within the context of our strategic plan. In addition, I have developed a list of specific principles for developing the FY2001 budget to help make those decisions," stated Coleman. The principles include:

-- The 2000-2005 strategic plan will serve as a guide for all budget reductions and enhancements.

-- Decisions on the best means to manage allocated budget reductions and salary shortfalls will be made within collegiate and administrative units to the greatest extent possible.

-- Salary setting will be in accord with the salary policy authorized by the Board last month, including meeting the requirements of the collective bargaining agreements and an average budgeted salary adjustment of 4 percent for faculty and P&S staff.

-- Every effort will be made in budgeting to sustain the ability of students to graduate in a timely fashion through access to appropriate courses.

-- Unit heads will be responsible for taking all reasonable steps to avoid lay-offs or furloughs as a result of these budget reductions and will seek opportunities for using attrition or hiring delays to produce needed savings.

-- Student financial aid will be maintained at 16 percent of anticipated tuition revenue.

-- Non-salary price inflation will not be funded -- except for library acquisitions. Library acquisitions will be funded to the degree feasible -- but not at the level of actual price inflation, nor at the funding level provided in recent years.

-- Budget reductions required as a result of state deappropriations in FY 2000 will be sustained in dollar magnitude with individual components reconsidered if necessary.

-- Commitments to students on the use of tuition derived from the creation of mandatory student activities and services fees will be met without question.

-- Equipment purchases and capital improvement projects cannot be deferred indefinitely, and temporary reductions in these budgets made in FY 2000 and FY 2001 will need to be restored in FY 2002.

-- The Strategic Planning program review process will be augmented to look for additional reallocation opportunities for FY 2002 and beyond.

"There are only four places we can look to meet the challenges: new tuition revenues net of student aid, indirect cost recoveries to the extent the costs support a research effort, reductions from academic and administrative units and eliminating or reducing budget increases to meet our strategic planning initiatives. A combination of these sources will be used to cover the shortfall," stated Coleman.

In concluding her discussion about the budget, Coleman also discussed what the university would not be doing this year as a result of the budget shortfall. "With the commitment from the Board last fall to create mandatory student fees, the University of Iowa will be able to provide limited increases in quality to our educational programs. However, in addition to the building projects that will be deferred this year, there will be little or no progress made on many of the initiatives that the Board and students expected the new tuition revenue to be dedicated towards," concluded Coleman.

Some of the things the university will not be able to accomplish are: "Smart Classrooms" with cutting edge technology, next generations science faculty recruitment, improved electronic connectivity for students, and additional experiential learning opportunities such as increasing the number of internships available to students.