The Iowa Board of Regents on Wednesday unanimously approved a $65.4 million budget cut for the state universities for next year, citing revenue reductions due to coronavirus and declining state financial support.
The $3.47 billion general operating budget also includes money for the Regents board office, Iowa Public Radio and the special schools for blind and deaf students.
The Regents approved tuition rates in June that included no increase from the previous year. The Iowa Legislature cut the 2021 appropriation for the state universities by $8 million in June.
University presidents emphasized the historic nature of the challenge they face.
“Shutting down was one thing. Reopening is another,” University of Iowa President Bruce Harreld said during the online board meeting. “Every pocket of our university has been impacted by this virus and every pocket has been impacted differently than other departments.”
Iowa State University President Wendy Wintersteen said the effect of budget cuts could include the loss of 100 faculty positions, mostly through attrition and a new retirement incentive program. Iowa State saw revenues drop $114 million due to the pandemic, she said.
“We are working to minimize the effect of our financial challenges on students, faculty and staff. However, this is really an unprecedented situation,” Wintersteen said. “These are extraordinary times and we are forced to make difficult decisions to maintain the financial health of the university.”
Among other budget-reduction measures, the University of Iowa has reduced support for Hancher Auditorium as part of a three-year process to make the fine-arts center self-sustaining.
All three university presidents have taken salary reductions. The board approved a 10% cut to Wintersteen’s base salary of $590,000; University of Northern Iowa President Mark Nook’s base salary was cut by $42,110 and his deferred compensation package through June 2022 was cut in half, to $50,000. Harreld took a 50% cut in his base pay for a reduction of $270,416.
The board did not reduce deferred compensation packages for Wintersteen and Harreld.
The university budgets approved Wednesday were:
- University of Iowa: $727.9 million, about $18.1 million less than a current year’s budget of $746 million.
- Iowa State: $629.9 million, about $41 million less than the current year’s budget of $670.6 million.
- University of Northern Iowa: $170.4 million, a cut of $6.6 million from the current year’s budget of $177 million.
Activist group: Rising tuition isn’t sustainable
The budget cuts are indicative of the universities’ reliance on tuition money, which doesn’t set them up for long-term success, said Denise Cheeseman, the lead organizer of Iowa Student Action, an activist group that advocates for free college.
Cheeseman said tuition has been historically rising across the country, including in Iowa, which allows state governments to reduce their allocations.
Now, students may be faced with rising tuition costs as they face economic stress during the COVID-19 pandemic.
“I know so many of my friends and students are not sure if they’re going to be able to make ends meet now,” Cheeseman said. “I know people who are dropping out and taking semesters off.”
While money has been allocated to each university through the CARES Act to help students, they are required to file an application for aid that shows financial hardship due to COVID-19.
But Cheeseman said that’s counterintuitive.
“This is affecting literally everyone,” Cheeseman said. “It needs to not be a one-time reward.”
Harreld: There’s no ‘administrative bloat’
University of Iowa president Bruce Harreld took issue Wednesday with an assertion in a newspaper column that the Board of Regents should look for ways to streamline university administration.
Harreld cited data from the American Council of Trustees and Alumni that shows the average administrative costs for tier one universities was 17%, while the average at University of Iowa is 13%.
“All of us have had to hunker down and (have) made sure that we become as efficient as possible in our administrative costs to support our academic and research missions,” he said. “So let’s please calm down. There’s not administrative bloat. There’s actually just the opposite.”
Asked by a member of the Board of Regents whether the university has suffered from having too few administrators, Harreld said it needs more lawyers. “Last year, I sat down with the faculty who had reviewed for several months our general counsel organization, and it’s quite clear that we are two or three attorneys short of what we need,” he said.