Regents wrestle with budget

BY TESSA McLEAN | MARCH 10, 2009 7:27 AM

All UI faculty, professional and scientific employees, and institutional officers could see their salaries frozen for fiscal 2010.

State Board of Regents President David Miles said he plans to ask the regents next week to adopt a resolution directing the heads of the five regent institutions to hold flat the salaries for non-bargaining unit employees in fiscal 2010, he said in a statement Monday.

“The Board of Regents is committed to doing what is necessary during the state’s fiscal crisis, while at the same time working to minimize for Iowans any negative impact on our many resources for the State,” Miles said in a statement. “It must be noted, however, that it is becoming increasingly challenging to implement additional cost-saving measures without damaging the core quality, affordability, and access of our institutions.”

The regents will meet March 19 at the IMU.

UI Senior Vice President for Finance Doug True said of the roughly $587 million general fund at the UI, about 75 percent is used for salaries or benefits.

Freezing these salaries will have a dramatic effect on the budget, and the elimination of salary raises is only the first step in attaining budget cuts, he said.

“There are going to be a lot of changes — there have to be,” he said. “We are still engaged in the process that will take another three or four more weeks.”

True emphasized nothing can be determined until decisions on state funding are made.

If Gov. Chet Culver’s 6.5 percent statewide budget cut is approved, the regents are expected to lose $62 million, resulting in roughly a $26 million loss for the UI.

Miles said he expects the loss could be even greater.

“With the reality that our required spending reductions may now be as high as $75 million or more, it is apparent that we must cap salaries immediately,” he said. “All options to meet the necessary reductions remain on the table as we continue to respond to the State’s financial need.”

Regents did not return calls for comment on Monday.

UI economics Associate Professor John Solow said it would probably be wiser for the regents to slice aggregate salary spending — not individuals. He said by capping all staff salaries, universities may run the risk of losing professors to other universities.

“Suppose another college offers one of your faculty members more money to go to that school,” he said. “You want to have a little flexibility to be able to bargain, but with this proposal universities wouldn’t have that luxury.”

UI spokesman Steve Parrott said faculty members are willing to forgo salary raises or take furloughs if it will save the jobs of their colleagues.

“Some people are willing to cut salaries to contribute,” he said. “We are all in this together, and we will get through it and come out of it stronger.”

Parrott said all other options to reduce spending are still being considered, including eliminating positions.

While Solow said he was not surprised by the announcement, he noted he is concerned that continuing to operate with a reduced budget after the recession could hurt the university.

“I believe in taking short-term measures for short-term problems,” he said. “Our students and faculty would eventually move to receive better benefits, and it would hurt the state.”

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