Hold off on more campus construction, Reynolds urges

Governor doesn't want new regents projects in 2019 budget year

Study desks are lined up Thursday down the center on the fourth floor of the University of Iowa Main Library. The university hopes the first part of an eventual $52 million of the facility would be funded by the Iowa Legislature in fiscal 2019. But Gov. Kim Reynolds is recommending none of the $15.6 million the UI hoped for to start. (Stephen Mally/The Gazette)
Study desks are lined up Thursday down the center on the fourth floor of the University of Iowa Main Library. The university hopes the first part of an eventual $52 million of the facility would be funded by the Iowa Legislature in fiscal 2019. But Gov. Kim Reynolds is recommending none of the $15.6 million the UI hoped for to start. (Stephen Mally/The Gazette)

Construction cranes that often dot the skylines at Iowa’s public university campuses could be seen less often under a budget proposal made this week by Gov. Kim Reynolds.

Keep constructing a pharmacy building at the University of Iowa and bioscience facilities and a student innovation center at Iowa State University, she recommended for the ongoing projects.

But then no more, at least for now.

She said legislators should zero out the UI’s wish in fiscal 2019 to start a major renovation of the Main Library, ISU’s hope to begin building a new veterinary diagnostic center and the University of Northern Iowa’s desire to start modernizing a technology center dating back to the 1970s.

In addition, the governor recommended supporting only a fraction of the cost the campuses say they need to catch up with vital maintenance on buildings that are reaching — or have passed — their anticipated life spans.

Reynolds’ recommendation jibes with a key representative who raises questions about why regents projects have risen to the top of priorities while other state building needs languish.

Rep. Pat Grassley, R-New Hartford, chair of the House Appropriations Committee, has suggested changing the way the state responds to university building requests — scaling back funding from its Rebuilding Iowa Infrastructure Fund, which historically has supported capital projects for the regents.

“I think the amount of money going to these projects going forward, we need to be very mindful,” Grassley said during a briefing this month. “Not only are we potentially facing a reduction in revenue in the RIIF fund, but we’re also doing this at the expense of our major maintenance to state facilities.”

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He expressed a hope to “reverse the trend” of funding regent building requests every year.

“I think the priority should be maintaining the buildings that we have,” he said. “That doesn’t mean that there are some things that are needed that we can’t do. But I don’t think we should be in a situation where we say, ‘Give us your three priorities and every year plan on getting your top priorities put into the RIIF.’”

If lawmakers take Reynolds’ suggestion to reject requested funding for regent building projects in the next budget year, construction could diminish on campus.

“I think we’ve been very generous to the regents over the last several years,” Grassley said, reporting the Rebuilding Iowa Infrastructure Fund since 2012 has supported three UI projects, four ISU projects and two UNI projects.

The fund over that time provided $72.9 million for maintenance of state facilities, according to Grassley, compared with $457.7 million for regent projects and “tuition replacement.”

That law allows the universities to issue academic building revenue bonds to fund projects and use tuition revenue to pay the principal and interest. Lawmakers appropriate money to replace tuition revenue.

Losing state support for building requests would exacerbate cuts in general education funding for the public universities, which absorbed more than $30 million in reductions to their base appropriations during the last legislative session and could see more cuts in this session.

Reynolds has proposed taking back $5.1 million previously committed to the regents still this year to help meet an estimated state budget shortfall of about $35 million.

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She has suggested upping appropriations for the regents general education fund in fiscal 2019 by $7.3 million — though that’s below the board’s $12 million ask.

Asked about the governor’s recommendation to reject the fiscal 2019 building requests, regents spokesman Josh Lehman said the board is “pleased that numerous times the state has approved capital expenditures for academic buildings on our campuses.”

“Quality facilities are an integral part of the academic enterprise, as they help ensure quality academic programs and the ability to attract and retain students, faculty and staff,” Lehman said in an emailed statement.

Reynolds’ proposal would do away with $15.6 million for the UI Main Library modernization; $20 million for ISU’s Veterinary Diagnostic Laboratory replacement; and $2.1 million for UNI’s Industrial Technology Center renovation.

Regent documents show the UI had planned on all $52 million for its library modernization eventually coming from state appropriations — with additional requests of $26 million in fiscal 2020 and $10.4 million in 2021 yet to come.

Of the $124 million total cost for ISU’s laboratory — replacing the state’s only full-service and fully accredited lab of its kind, first occupied in 1976 — $100 million of it was anticipated from state appropriations, in $20 million allotments over five years.

And UNI had hoped all $36.2 million to renovate and expand its Industrial Technology Center — originally built in 1974 — ultimately would come from the Rebuild Iowa Infrastructure Fund.

“We will continue to work with the governor and the legislature for a level of funding that is appropriate,” Lehman said in his statement.

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Reynolds did propose following through with commitments in the next budget year for regent projects already underway — including $5.5 million for the UI pharmacy building, $4 million for ISU’s biosciences facilities and another $10 million for its Student Innovation Center.

As for the board’s $20 million request for fire safety and deferred maintenance expenses, which have been mounting over these years, Reynolds suggested funding $3 million.

For fall 2016, the board reported deferred maintenance costs in all total $779.2 million, which represents a sharp increase.

At the UI alone, there are 8.9 million square feet of physical assets on campus worth an estimated $4.1 billion, a spokeswoman said.

If the UI spent just 1 percent of that replacement cost on preventive maintenance as recommended, that would be about $40 million a year. But the UI is spending less than half that.

Sen. Joe Bolkcom, D-Iowa City, stressed that Iowa’s public universities are “economic engines” that need support.

“The Legislature has been a terrific partner in funding their infrastructure,” he said. “It is shortsighted to ignore or diminish their needs. The Legislature should be helping them meet the challenge of educating Iowa’s next generation and ensure they have first-class facilities.”

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