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Release: June 13, 2002

University announces principles for budget reductions in FY03

The University of Iowa today announced the principles for decisions on budget reductions to be made in for the upcoming 2002-03 fiscal year (FY03). Because of a reduction in state appropriations, the University will reduce its FY03 general education operating fund by $14.6 million from its FY02 allocation. University-wide, state appropriations for FY03 will be $18.4 million less than what they were for FY02.

The University will be receiving an additional $10.1 million from state appropriations to fund salary increases for general education fund employees. However, that is about $1.9 million short of what is needed to fund 3 percent salary increases for those employees.

The principles were developed by President Mary Sue Coleman and University vice presidents in consultation with collegiate deans and leaders of the faculty, staff and students. The principles are as follows:

1. The 2000-2005 University of Iowa strategic plan and core values will provide the framework for developing the university's budget. The focus should continue to be on preserving excellence and supporting the most vital missions of the university.

  • Core principles that have been used to guide budget adjustments will continue to be observed where possible. Those principles include maintaining the quality of central academic research programs, keeping in place the four-year graduation plan, protecting student financial aid, and protecting the acquisitions budget for the university library.

2. The president and university administrators will continue seeking input from faculty, staff and student leaders on budget reductions and allocations of reductions across units as well as in identifying potential cost savings.

  • Communication with internal and external constituencies by the president, UI administrators and collegiate administrators will be timely and on-going.

3. Budget reduction strategies must protect the university's ability to recruit and retain a high quality and diverse student body.

  • Maintaining the university's reputation for offering a high quality educational experience will be of paramount importance.
  • At a minimum, financial aid will be established at 16 percent of tuition revenue.
  • The university will protect to the extent possible the ability of students to graduate in a timely fashion (including the four-year graduation contract).

4. The university will maintain a robust research and scholarly enterprise. Essential support to funded research programs and research support units will be maintained at a level that does not unduly jeopardize the continuation or growth of external funding.

5. Vice presidents, deans and unit directors will be given flexibility in achieving savings within a framework that includes these principles:

  • Budget reductions must achieve net savings to the General Education Fund.
  • Layoffs/furloughs will be implemented when and to the degree necessary. All university notice periods related to layoffs/furloughs will be honored.
  • Decisions about cost reductions must always consider the impact on revenue generation.
  • Budget reductions must produce required savings in FY 2003 and savings must be recurring.
  • Units should review existing programs in light of university, collegiate and departmental missions and goals, including the university's diversity goals. Based upon centrality and quality, selected programs should be subject to increased reductions or elimination using our well-established consultation procedures.
  • Units should seek out enhanced efficiencies, including consolidation of programs and services within and across units.
  • Units should maximize savings from current and upcoming position vacancies.

6. The university's response to the reductions in state appropriations will focus on those units and programs supported by state appropriations, recognizing that there is a high degree of mutual interdependence among university programs, regardless of the source of funding.

7. The allocation to resource pools such as building repair, equipment, classroom improvements, and faculty start-up will be scrutinized to determine where deferrals can occur or where investments must be continued, consistent with our stewardship responsibilities.