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Neil Theobald
IU Vice President and Chief Financial Officer

Last modified: Friday, May 7, 2010

IU Trustees approve lean budget for 2010-11

May 7, 2010

BLOOMINGTON, Ind. -- The Indiana University Board of Trustees today approved a 2010-11 budget that calls for increasing spending for day-to-day operations by just $11.6 million, or 0.7 percent.

Neil Theobald, vice president and chief financial officer, told trustees this is the lowest percentage increase IU has experienced in several decades in its operational budget, which covers such things as employee salaries and benefits and energy and utility costs.

Theobald said IU President Michael A. McRobbie directed him to hold spending in line with expected 2010-11 operating revenues, which will also increase by less than 1 percent because of a $29 million (6 percent) reduction in state aid.

For the second consecutive year, the budget does not include an amount for employee salary increases. However, Theobald said it does include $17 million to be held in reserve to address emerging university priorities.

"It is possible at a later date that some, or all, of the reserve fund could be used for salary increases," Theobald said. "But that would only be possible if we see continued improvement in the state's revenue picture, if our enrollment remains strong, and with trustee approval."

Overall, the operating budget calls for spending $1.7 billion on eight IU campuses.

Due to an aggressive expansion in student enrollments across all IU campuses, and the higher tuition rates for 2010-11, tuition revenue is expected to increase by $51 million after the university increases budgeted financial aid by 22 percent or $27 million. Fees, interest income and research funding will add another $7 million.

Last July, the Board of Trustees approved a 4.9 percent tuition increase for in-state undergraduate students on the Bloomington and IUPUI campuses and a 4.7 percent increase for in-state undergraduate students at all regional campuses. Rate increases for out-of-state students varied from campus to campus but were generally higher.

Theobald noted that as a result of cost reduction strategies carried out over the last ten months, IU employs about 150 fewer staff members who are paid from the operating budget. The salary savings next year from this staff reduction will be $6.1 million. Another $4.4 million will be saved as a result of reduced travel budgets and campus-specific initiatives cut another $1.8 from the budget.

The new budget provides $10 million -- a 4 percent increase -- to fund higher health care and retirement costs for staff and faculty. Other spending increases cover additional academic employees needed to teach record enrollments ($8.2 million), utilities ($2.2 million), salary increases for newly-tenured and newly-promoted faculty ($1.4 million), and graduate student health insurance ($900,000).