The economy may be seeing an upswing, but ISU officials are predicting another hard year for school funds.

In his Friday address to the President’s Council, ISU President Gregory Geoffroy is expected to announce revisions to the school’s projected fiscal year 2005 budget, addressing a dramatic drop in funds from tuition revenue and a reduction in general cost-increase funds to cover the gap.

The result will be less funds available for areas such as building repair, technology infrastructure and library materials. Student financial aid may also be affected.

Geoffroy will submit his budget to the Board of Regents for approval in June.

The current outlook, officials said, calls for roughly $10 million in compensation increases, including raises for faculty and staff members. After meager increases in raises during the past five years, administrators are worried that, without new compensation, Iowa State will not be able to remain competitive for quality personnel in coming years.

“The reductions and relatively low adjustment in salaries have made it continually difficult to be competitive,” said Warren Madden, vice president for business and finance. “We’re at the bottom of the peer institutions we use to compare with now, or very close to it. Across the country, many schools are having budget problems. But now, as things are starting to get better and the economy appears to be improving, it’s become a concern that we’ll start to lose some of the major people at Iowa State that we want, and the quality of the university is really contingent upon keeping high-quality faculty and staff.”

Although state appropriations have leveled off, offering no more or less than they did last year, the total amount does little to help fund salary increases. Compensation money will be taken in part from a 2 percent general cut across every department at Iowa State.

Originally, the school’s budget balancing efforts were assisted by a projected $5 million addition to tuition revenue due to an increase in tuition rates by the Board of Regents. However, officials said recent data indicates a significant drop in enrollment, possibly due to a riot at the end of Veishea, bringing the estimated amount of new revenue from tuition down to about $2 million.

“After the Veishea incident, we reassessed what we anticipated for enrollment next year, and we estimated in terms of enrollment in March and May,” said Mark Chidister, assistant to the president for budget planning and analysis. “There was a significant drop in the enrollment. There are a number of factors that feed into that. One aspect is that there are probably a certain number of students that chose not to come because of the Veishea incident. There have also been a number of challenges with international students getting visas.”

The administration’s decision to maintain planned raises and deal with rising benefit costs for employees will also mean layoffs of certain faculty and the termination of some jobs left unfilled by retiring or terminated personnel, Chidister said.

“There are going to be fewer people, positions that are going to be eliminated and some people laid off,” he said. “Fewer faculty, professional, clerical and maintenance staff on campus.

“There are some things that we do that are going to take longer to get done, there are some things that aren’t going to get done. It means that the faculty positions in particular, the position reductions are mostly in the adjunct, lecturer, clinician type positions.

“We aren’t firing any tenure-track faculty, but if there was an open position as a result of a retirement or resignation, that position might be used to help meet this target — which means that you either reduce the number of courses that are offered, or the courses that are offered will get larger in size to meet student demand.”

But the current budget is not all bad news, Chidister said. $48 million, borrowed with the financial backing of the state, has been secured for building projects such as those at the Veterinary Medicine Teaching Hospital and Coover Hall.