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Larry MacIntyre
University Communications
lmacinty@indiana.edu
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Last modified: Wednesday, January 6, 2010

Work begins on second round of IU budget cuts

Editors note: For a copy of IU President Michael A. McRobbie's communications with faculty and staff regarding planning for budget cuts, go to http://www.indiana.edu/~pres/email/010510.shtml

FOR IMMEDIATE RELEASE
Jan. 6, 2010

BLOOMINGTON, Ind. -- Indiana University has identified $29.3 million in base budget cuts but still must find another $58.9 million in one-time cuts to fully comply with mandated reductions in state aid.

Neil Theobald, vice president and chief financial officer, today issued a progress report on how the university is responding to the reduced level of state funding it expects to receive this year and next.

The state budget passed by the Indiana General Assembly last year reduced state funding for IU by $29.3 million during the 2009-11 biennium. That, in turn, forced IU to adjust its operating budgets downward by an equivalent amount.

Last month, Indiana Gov. Mitch Daniels ordered another $58.9 million cut in state funding for IU as part of a $150 million reduction shared by all of the state's public colleges and universities.

In response to the latest reduction, each IU campus is being asked to put together a plan detailing what steps it will take to absorb its share over the next 18 months.

"The campuses have been told they may not spend down operating reserves in their current budgets," Theobald said. "Instead, they must reduce planned spending over the next 18 months by the full amount allocated to their campus."

The plans are to be completed by the end of January for review by Theobald and IU President Michael A. McRobbie.

"The situation is serious, and these reductions will have an impact on every department and every campus," Theobald said. "But this also will have a positive effect by forcing all of us to look very hard for ways to become more efficient and streamline everything that we do as an institution."

Theobald said IU's operating budget base has been reduced by $22.3 million through cuts in travel spending and attrition of non-faculty employees. The remaining $7 million in base budget cuts will come from these measures:

  • Consolidating campus purchasing offices into a single university-wide office that will serve all seven campuses.
  • Requiring sponsored research grants to fully cover retirement costs for grant-funded faculty and professional staff. Previously, these costs were subsidized from campus budgets.
  • Requiring new faculty and staff hires to meet a five-year vesting requirement to retain employer contributions to the IU retirement plan.
  • Changing the formula for calculating overtime pay for non-exempt staff so that non-work time (e.g., sick leave) is no longer included.

To accomplish the remaining $58.9 million in reductions, senior administrators at each campus have been directed to look for efficiencies that can be achieved without impacting the university's core academic missions of teaching and research.

These could include consolidating some administrative services, reorganizing staffs, reducing subsidies for activities that do not directly contribute to the academic mission, or leaving some staff positions vacant for up to 18 months.

Theobald said the plan for each campus will likely be unique to its individual situation.

After the campus plans have been reviewed by Theobald and McRobbie, they will be publicly announced. Theobald said he hopes the process will be completed by early February.