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June 4, 2004
Volume 41, No. 11


Adding it all up: Interpreting the latest round of budget cuts
Reardon: Salary equity is an issue
Skorton to implement diversity measures
Kannada, Arabic to join UI language offerings this fall

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The University of Iowa

Adding it all up: Interpreting the latest round of budget cuts

Old Capitol photo surrounded by plus and minus signs
Photo by Rex Bavousett.

In January, UI President David Skorton appointed an ad hoc committee to make recommendations for $12 million in spending reductions over a two- to three-year period in certain noncurricular programs receiving support from the general education fund (GEF). After reviewing the GEF Task Force report, President Skorton announced in May $2 million in GEF reductions for FY05. Where exactly does that leave us, and what does it mean for the future? fyi solicited and compiled questions and concerns from a variety of faculty and staff. Steve Parrott, director of University Relations, worked with President Skorton and the vice presidents to address some of the inquiries.

Why are we looking at a $2 million reduction for FY05? Was this a directive from the Iowa Legislature?

The $2 million reduction was not a directive from the Iowa Legislature, but rather a UI administration target developed in response to a directive from the Board of Regents to the presidents of The University of Iowa, Iowa State University, and the University of Northern Iowa. The Regents directed the presidents to “propose removal of some or all general funds and/or increases in service fees for selected noncurricular, campus-based programs and activities that mainly serve constituencies other than enrolled students, with the goal of making such activities as self-supporting as possible.” This reallocation was an essential part of balancing the University’s GEF budget for next year.

Where did the $12 million figure (to be applied over two to three years) come from?

In January of this year, Gov. Vilsack predicted that the state’s revenues for fiscal year 2004-05 might require budget reductions in the range of 5 to 7 percent. The University’s state appropriation for FY04 is about $220 million, so the potential range of budget reductions was $11 million to $15 million. Following consultation with the provost, vice presidents, deans, and faculty, staff, and student leaders, President Skorton decided to seek budget reductions of $12 million.

If the cuts are to be applied over three years, are the second and third years subject to changes as the Iowa Legislature acts, or is this cut designed to be a fairly certain figure that we can count on?

The budget reductions recommended by the GEF Task Force are recommendations that will be considered over the next few months. As always, decisions on budget cuts in future fiscal years are subject to change, depending on a number of factors, including state revenues and actions by the Iowa Legislature and the governor. However, the GEF Task Force recommendations will be seriously considered because of the need to make strategic reallocations in support of the University’s core educational and research programs.

What happens in June at the Regents meeting? What will be decided?

The Board of Regents will be asked to approve the University’s complete FY05 budget, including the GEF, University of Iowa Hospitals and Clinics, the student residence system, and all other units. Within the GEF, the University is proposing to reallocate nearly $7.3 million for faculty and staff salary increases, including costs determined through collective bargaining agreements.

How will the remaining $10 million in cuts be determined? Will it be based on the GEF Task Force report?

The GEF Task Force worked very hard to develop its budget reduction recommendations for the coming fiscal years, and its recommendations will be given serious consideration. However, President Skorton will follow his practice of consulting with the provost, vice presidents, deans, and faculty, staff, and student leadership before making final decisions, some of which could differ from the GEF Task Force’s recommendations. The goal will remain to help protect core teaching and scholarly missions and to enable very selective growth for the most critical academic initiatives, such as competitive faculty salaries and replacing faculty positions.

Is it fair to hold academic areas harmless? This implies that, as they stand, there’s no waste in the administrative areas of academic programs but, presumably, a lot of waste in staff divisions and departments. Does anyone believe that’s the case?

Academic units have not been held harmless in the budget cuts experienced over the past five years. The University has attempted to preserve academic quality by assessing a larger percentage of the budget cuts to administrative units than to academic units. Likewise, as noted in the answer to one of the questions above, the Board of Regents directed the University to propose budget reductions for “selected noncurricular, campus-based programs and activities that mainly serve constituencies other than enrolled students.” Still, academic units have faced significant cuts. For example, in FY04, the University reduced general fund budgets by $11.5 million from July 1, 2003, levels. Collegiate reductions were $6.9 million, or 60 percent of the total. The only areas that have been held harmless during this time are student financial aid and the library acquisitions budget.

The task force asked for public input, and received it. Is there an ongoing mechanism for faculty and staff to offer input and have questions answered regarding the budget?

Yes. President Skorton asked for and received hundreds of e-mails following his release of the GEF Task Force recommendations. Further input can be sent to

How will salary increases be decided and funded?

Salary increases for staff members who are in collective bargaining units were decided through the bargaining process. For nonunion P&S staff and faculty, the University’s overall policy has been to allow colleges and administrative units to have an average salary increase objective in the range of 1 percent to 2.5 percent, with deans and vice presidents given discretion within that range. Salary increases are to be based on performance. Because of the University’s concern about competitive salaries, the UI administration is reallocating funds to provide GEF units with enough money for salary increases of 1.7 percent and is recommending that deans and directors use these funds for differential salary increases that address issues of salary compression and equity. Units may reallocate other funds to go as high as an average of 2.5 percent. Individual raises can be as much as 8 percent without requiring special approval from the UI administration.

How will benefits be affected in FY05? Are there any specifics yet, such as a reduction in the maximum vacation accrual?

There are no decisions yet on GEF Task Force recommendations regarding fringe benefits, including maximum vacation accrual. Moreover, no decisions will be made without consulting the appropriate UI charter committees on these issues. It is possible that some decisions on changes to benefits will be made in time to be implemented prior to the end of the 2004 calendar year, which is when all employees make their decisions on benefits.

Will there be central support for workforce transitions for those units that are unable to identify non-GEF funding sources, or will they simply be forced to lay off workers?

Units that are unable to identify non-GEF funding sources may have to eliminate occupied positions, in addition to vacancies and other means of cost reduction. In the case of staff members who belong to collective bargaining units, layoffs are made in accordance with the contract. For nonunion P&S staff, the University has a furlough policy that allows people with career status whose positions have been eliminated to remain in those positions for anywhere from six to 12 months following notice that their position will be eliminated, depending on their years of career service. Under the furlough policy, staff members with career status are given priority when they seek open P&S positions, which may allow them to continue at the University in another position. Every effort will be made to avoid or minimize the impact of layoffs.

If layoffs are inevitable, how are they determined? How is seniority measured, and what other factors would be used to determine who stays and who goes? And, would the University try to find another job within the University for the dismissed employee?

Decisions about positions to be reduced or eliminated should be based upon an objective review of the current and anticipated operational need and function of the unit. Once the classifications and positions are identified, departments will work with Human Resources to follow the applicable procedures. Again, for staff covered by collective bargaining agreements, layoffs are made in accordance with the current contract, but for the most part, they are based on University seniority within a job classification. For nonunion P&S staff, individuals affected by a staff reduction will be given notice to allow them to seek placement elsewhere within the University with priority status.

To read the GEF Task Force’s report, see


Published by University Relations Publications. Copyright the University of Iowa 2003. All rights reserved.


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