UI tuition increase more than makes up for appropriation dip

BY LUKE VOELZ | JULY 29, 2011 7:20 AM

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Tuition increases at Iowa's public universities are projected to give the University of Iowa a $28 million surplus — more than enough to offset the $12 million lost in state appropriations for the 2012-13 school year, according to information to be presented to the state Board of Regents next week at the University of Northern Iowa.

State legislators said they were unaware of the potential surplus when settling on education appropriations, yet they weren't surprised at the growing tuition numbers.

"One of the reasons so many people are at universities and community colleges now is because they're unemployed or looking for new jobs," said Rep. Greg Forristall, R-Macedonia, a member of the education-appropriations subcommittee. "When the economy recovers, employment numbers increase, and I would expect that the enrollments will be on the down trend rather than up."

The UI saw the largest incoming class in school history in the fall of 2010, with roughly 4,946 students.

But Forristall said potential decreasing enrollment could put the UI in a different sort of financial strain if it employs more teachers — possibly hired during the surplus and heavy student growth — than the smaller enrollment needs.

"Unless [the UI] is using [surplus money] on faculty, which can swell or decrease, you still have all the employees you have to serve," he said. "Fewer students might bring fiscal problems."

The surplus —which follows an average 5 percent UI tuition increase voted on by the regents in March — is part of a predicted $625.8 million UI budget for fiscal 2012, 5.4 percent less than that of fiscal 2011.

The UI, the UNI, and Iowa State University combined for some of the highest tuition increases for the coming year relative to peer institutes. In the last two years, regent institutions have lost roughly $118 million to budget cuts.

Sen. Bob Dvorsky, D-Coralville, the chairman of the state Appropriations Committee, said the regents should be stabilizing tuition for the masses of incoming students.

"I don't see the enrollment going down in near future," he said. "We need to get a stabilized budget that they can depend upon, and once they have that, they should be able to have tuition that doesn't exceed a point or two beyond cost of living."

The UI's surpluses in 2011 were further strengthened by approximately $3 million in one-time federal American Recovery and Reinvestment Act awards, according to university officials, which will run out toward the end of fiscal 2012. The funds are part of the stimulus package made available to universities in 2009 in efforts to kick-start the economy. Losing these funds in years past 2012 is cause for concern, said Regent Robert Downer.

"Unless we have some major turnaround in the economy, I think there very definitely will be challenges at that point," he said. "The problem with things like [American Recovery and Reinvestment Act] funding is that it almost invariably runs out, whereas state appropriations — while there are peaks and valleys to be sure — is something that occurs every year."

Downer shared Forristall's concern about regent institutions hiring faculty that future funding can't support. The Iowa City native said he was unaware of the surplus when voting on tuition increases, though the regents were aware of declining state aid.

Regent Katie Mulholland also expressed concern about spent American Recovery and Reinvestment Act awards.

"When those founds run out, I would hope there would be other recommendations and solutions from UI administrators rather than tuition increase," she said.

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