Iowa State will take a $114 million financial hit for the 2021 budget


Kennedy DeRaedt/Iowa State Daily

The Board of Regents held a meeting on Feb. 27 in the Reiman Ballroom at the Alumni Center. In their Aug. 1, 2018, meeting, Iowa State President Wendy Wintersteen expressed surprise at the decline in international student enrollment.

Amber Mohmand

Iowa State’s total budget will be $629.9 million for fiscal year 2021, a loss of $40.7 million from last year. 

The Iowa Board of Regents unanimously approved the $1.5 billion general operating budget for the 2021 fiscal year Wednesday. The University of Iowa’s total budget will be $727.9 million, a loss of $18.1 million, and the University of Northern Iowa’s budget will be $170.4 million, a loss of $6.6 million. 

“This really is an unprecedented situation,” Iowa State President Wendy Wintersteen told the Board of Regents Wednesday. “These are extraordinary times, and we are forced to make difficult decisions to maintain the financial health of the university.”

Wintersteen gave a few examples of the impact. 

“We will see reductions in the number of faculty, primarily through attrition retirement and unfilled vacancies,” Wintersteen said. “We will also see reduction in professional and scientific and merit staff positions, a reduction in student employment opportunities will impact students who rely on income to help make college affordable, and we will have less funding to support undergraduate research, a key high-impact learning opportunity.

“ISU Extension and Outreach will have to reduce the number of faculty and staff and develop and deliver educational programs around the state,” she said. “This will impact farmers’ families and Iowa’s children. And we’re exploring opportunities for program consolidation or elimination.” 

Wintersteen told the Board of Regents that she is taking a 10 percent salary reduction —  $59,000 — for the 2021 fiscal year. 

Wintersteen’s $590,000 salary will be reduced to $531,000; University of Iowa President Bruce Harreld’s $590,000 salary will be reduced to $295,000; and University of Northern Iowa President Mark Nook’s $357,111 salary will be cut to $314,971.90. 

A one-time allocation of $270,416 from Harreld’s salary will go to the UI’s Student Emergency Fund, according to the Daily Iowan

All Iowa State units must implement a 5 percent budget reduction for the fiscal year 2021 and an additional 5 percent reduction for the fiscal year 2022, Wintersteen said. 

“While we continue all the work of welcoming students and reserving our campus this fall, our financial challenges cannot be understated,” Wintersteen said. “The revenue loss for fiscal year 2021 for Iowa State University’s Educational Fund is more than $41 million.

“Since the start of the COVID-19 through Aug. 23, additional revenue losses and costs are estimated to be another $73 million for a total financial hit of $114 million,” she said.

Iowa State, University of Iowa and the University of Northern Iowa will take a $65.4 million budget cut this year due to the decline in enrollment and the pandemic.

“We also shared the difficult news that we did not have the resources to provide performance-based compensation increases [and] merit staff did receive July 1 salary increase consistent with contract negotiations,” Wintersteen said. 

Wintersteen also announced a 20 percent drop in funding to the TIAA retirement match for 10 months beginning Sept. 1. 

Iowa State has a projected loss of 100 faculty positions primarily due to attrition, retirement and unfilled vacancies. 

Student employment and undergraduate research opportunities, educational programs and services to Iowans through Extension and Outreach have been reduced. 

“All faculty and staff position vacancy postings now require approval from senior leaders through the end of the calendar year,” Wintersteen said. “We have put a temporary freeze on renovation and capital projects, except in cases of safety or donor-funded projects, and we made modifications to our employee tuition reimbursement program.”

The employee tuition reimbursement program has also been modified. 

Since classes moved online in March, the combined loss of revenue for Iowa State, University of Iowa and University of Northern Iowa was $178 million, which includes over $41 million in tuition refunds.

“The development of the FY 2021 budget was extremely complex as ISU is addressing unprecedented revenue losses due to COVID-19, projected enrollment declines, reduced state appropriations, reduced indirect cost recovery and the increased costs of preparations necessary to enhance healthy outcomes for the fall semester,” according to the Iowa Board of Regents’ budget outline. 

Wintersteen said Iowa State will enhance collaboration across units, including job sharing to enhance both efficiency and effectiveness.

She said the university will also work to reimagine online education programs across the university with an eye toward collaboration and growing enrollment among place-bound students and further promote a robust culture of continuous improvement.

The budget approved on Wednesday is $45.5 million combined in federal relief money through the CARES Act and half the money each school receives will go directly to students in the form of financial aid. 

Additionally, the Board of Regents cut all funding toward Iowa Public Radio. 

State support for Iowa Public Radio has decreased 1.4 percent from last year and the budgeted decreases are in fundraising revenue from memberships, underwriting and events due to anticipated economic issues related to the pandemic and no scheduled, revenue-generating events. 

Iowa Public Radio salaries are also decreased for the 2021 fiscal year and there will be no salary increases for staff. 

The program received funding from the CARES Act and it will be applied to radio programming fees. 

Professional and other services expenses are estimated to decline in 2021 from decreases in professional services for one-time projects completed in the 2020 fiscal year and a reduction in services related to capital campaign needs, according to the Iowa Public Radio budget report.