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James Tinney

Last modified: Thursday, November 29, 2001

IU officials outline plans for possible budget cuts

Indiana University announced Thursday (Nov. 29) a series of steps that the university is taking to prepare for possible budget cuts.

The university will delay efforts to fill administrative and staff vacancies; will reduce spending on travel, supplies and equipment; and will consider the imposition of a temporary fee on students next year to make up for losses in technology funding from the state. Specific steps will be undertaken at a local level based on decisions made by campus chancellors and vice presidents.

President Myles Brand stressed that the university, in creating its budget contingency plans, will make every effort to protect the academic mission and the academic excellence of Indiana University. More than 75 percent of any cuts will come from administrative areas university-wide.

"Indiana's research universities must play a key role in building a stronger, more resilient economy in our state -- through both education and research. We must not allow that effort to be undermined by short-term budgetary problems," Brand said.

Final decisions on most budget reductions and on tuition and fee levels for the 2002-03 academic year will not be made until there is a clearer signal from the state about actual reductions in funding. However, contingency planning will begin based upon the proposals announced earlier this month by Gov. Frank O'Bannon.

The contingency planning process for each campus will be led by the campus chancellor. Each campus will be given a budget reduction goal and will be allowed flexibility on the best way to achieve it. That process will be monitored by Vice President and Chief Financial Officer Judith Palmer and is expected to be completed by early 2002.

As a result of the reductions outlined in the governor's budget-balancing plan and the reductions in funding levels previously approved by the legislature in enacting the 2001-03 biennial budget, the university would lose about $56.5 million in funding.

The 2001-03 state budget, as passed in April of this year, includes some important funding increases for IU programs, including the new School of Informatics, which will contribute to the state's future economic growth. But it also included significant reductions in higher education funding for repair and rehabilitation of buildings and for information technology. In addition, one monthly payment of state operating appropriations to IU was delayed for an indefinite period. For IU, that payment is about $36 million, which will be covered through the use of university reserves.

According to the university's budget calculations, Gov. O'Bannon's plan calls for additional reductions to IU of about $11.6 million over the two-year biennium in information technology spending and about $13.0 million in repair and rehabilitation funding. As a result, the repair and rehabilitation appropriation would be about 37.5 percent of the previous biennium's, while the appropriation for information technology would be cut by about 66 percent from the previous two-year budget.

Indiana University, which educates more than 96,000 students on its eight campuses statewide, is the fourth-largest employer in the State of Indiana. Brand said that, while he does not expect widespread layoffs as a result of the budget cuts, jobs funded through the repair and rehabilitation appropriation may be affected. He said some budget savings may be achieved by not filling open jobs or by shifting employees to other positions.

"We recognize that we must do our part to help the state weather this budget crisis. But we also will stress to our elected officials how important a strong higher education system is to the long-term economic health and quality of life of our state," Brand said.