Final budget determinations wait for word from state and Regents

"Under ordinary circumstances, right now we’d be sending out budget instruction letters to colleges and departments, telling them what their detailed funding allocation is for the year," says Doug True, vice president for finance and university services. "This year, we could go right down to the wire."

The "wire" in this case is the last possible day that the University can get the 2002 fiscal year budget figures compiled from across campus and still have time to process the August 1 payroll for faculty and staff. That date is July 18.

"This has happened before," says True, "and it’s not a comfortable situation."

The University’s budget process works like this. Each year, the state legislature passes two bills, one establishing how much will be allocated to state agencies (including the Regents institutions) for general operating expenses and another setting the amount available to provide salary increases. Once the salary bill has been signed by the governor, the state Department of Management determines exactly how much goes to each agency, after which the Regents decide how much goes to each of its institutions. This year, the process was slowed at the start by projections that the state’s income would be significantly lower than projected for FY2002 and the subsequent difficulties in establishing an overall state budget.

In early May, the legislature passed, and the governor subsequently approved, a general operating budget that reduced the University’s appropriation for FY2002 by more than $18 million, the largest single reduction ever. In response, the University has asked colleges and departments to submit plans for reducing their expenditures for the year in accord with budgeting principles established by President Coleman.

"Of course, it is impossible to put together a final, detailed budget without knowing how much will be available to meet our salary obligations," True says. As University budget officers worked to come up with a reduction plan, the 2002 salary bill was making its way through the legislature. That bill was passed late in May and was signed by the governor on May 30.

"Before we can produce an actual detailed budget, we must have the final salary allocations from the Regents and they must have the final allocations from the state’s Department of Management," True says. "We are working on the assumption that faculty and non-organized P&S staff incremental salary increases will be between 3 and 4 percent, and working with collegiate officers, we’ve been able to do a lot of preparatory work."

Meantime, even as central administration is planning for reductions, some units, especially those that provide health care, are actively recruiting workers.

"President Coleman also has made it clear that some areas of the University must be protected from cuts. Student financial aid and library acquisition funds are two examples," True says. "And students must continue to have classes available so that they can graduate on time."

The greatest impact will be in reduced numbers of faculty and staff. Current estimates project a loss of 107 positions, 62 of them faculty.

"At this point, we are hopeful that this reduction can be achieved through attrition," True says. Rigorous program reviews and a utility savings plan will also be used to reduce costs.

"It’s a difficult time," True says. "The opportunities to reduce expenditures are limited. We face some tough times ahead, this year and next. But the University is a vibrant enterprise, with exceptional people. I have confidence that we will face these challenges and continue to fulfill our missions as best we can."

Current information about the University’s budget is available at President Coleman’s web site: www.uiowa.edu/president/budget/.

Article by Charles S. Drum