Indiana University

News Release

Thursday, July 16, 2009

Last modified: Thursday, July 16, 2009

Budget plan restricts spending, yet meets key academic goals

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July 16, 2009

INDIANAPOLIS -- The Indiana University Board of Trustees today (July 16) adopted a budget plan for the 2009-10 academic year that includes several belt-tightening measures but still allows for increases in student financial aid on all campuses and provides funding to fill more than 100 faculty positions deemed critical to the university's academic mission.

Indiana University President Michael A. McRobbie said the spending restrictions include a salary freeze for most IU faculty and staff, a 50 percent reduction in travel funds, and increased restrictions on non-academic hiring.

In remarks to trustees, McRobbie pointed out that Indiana and the nation are facing the severest economic downturn since the Great Depression and that state-mandated cuts to IU's operating budget were softened by one-time allocations of federal stimulus dollars. He said indications are the state's recovery will lag behind a national recovery and that there are no guarantees of more federal stimulus money being available in two years when lawmakers put together the next state budget.

"Fiscal prudence dictates that we must budget for the situation where the state economy has not improved significantly in two years' time," McRobbie said. "This budget represents a balance between the need to reduce our operating costs and yet continue to serve the needs of our students with a high-quality academic program at affordable tuition levels. I recognize that many of our employees will be disappointed by this decision, but tightening our budget now will prevent us from having to take even more painful measures in future years."

McRobbie said his budget plan is based upon three principles:

Details of the $2.76 billion spending plan were outlined to trustees by Vice President and Chief Financial Officer Neil Theobald. He noted that the budget is intended to achieve several key goals, including:

Theobald noted that IU's largest campus in Bloomington saw a 3.8 percent enrollment increase in 2008-09 -- or nearly 1,400 more students. To maintain class size, IU Bloomington is adding 61 additional faculty positions in 2009-10. IU's other six campuses enrolled slightly more than 1,200 additional students in 2008-09 and have hired 68 additional faculty members in 2009-10.

Some exceptions to the salary freeze will be granted for such reasons as attaining tenure or promotion to a position of increased responsibility, and the university will pay the health care premium increase for all full-time employees in 2010. Also, administrative employees earning less than $30,000 will get a one-time supplemental payment of $500.

"In times of economic uncertainty, it is more important than ever that institutions of higher learning maintain their ability to serve their students with quality, affordable academic programs," McRobbie said. "We can't close our doors to those who want to improve their employability, nor can we raise our prices to levels that would be out of reach by those who need us most. Instead, we must find ways to do more with the limited resources available to us, and that is the intent of this budget."

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