The Iowa Board of Regents is spending a “significant amount of time” working to lower a proposal from the governor’s office to take back $25.5 million of state appropriations in the current budget year.
“I, for one, think that number will be significantly lower than the $25 million,” Board of Regents President Bruce Rastetter told The Gazette on Thursday.
Still, he said, the board and its universities are planning for a variety of scenarios — trying to find efficiencies and prioritizing, should reductions become necessary.
“All three universities are looking at — depending on the level of de-appropriation — what changes or cuts will need to be made,” Rastetter said, adding, “We think the number will be less … we’ll know, I think, in the next week.”
Gov. Terry Branstad last week proposed about $110 million in de-appropriations for the current budget year after tax collections came in lower than projected. Of that total, Branstad proposed taking back the most from the Board of Regents, plus an additional $8.7 million from community colleges.
As part of the governor’s two-year budget proposal, he suggested annual 2 percent increases in state support for the regents. But — should lawmakers approve the nearly $26 million cut this year — those increases wouldn’t be enough to bring the board back to its current level of state funding.
“I think it’s just prudent to wait and see what it is and what the ensuing appropriations increase — if we receive it — is,” Rastetter said.
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Board and university administrators have an upcoming meeting to address the issue — but Rastetter declined to say more about the potential impact of state de-appropriations.
“That’s not fair to people and to their jobs,” he said. “So we’ll just develop a wait-and-see attitude toward it. But we’re planning for the worst and hoping that it’s better.”
One budget-management strategy the regents employed earlier this week was their decision not to give midyear pay raises to university presidents and Executive Director Robert Donley — despite saying over the summer they would reconsider compensation at the institutional heads’ January performance reviews.
“We know de-appropriations are coming, there’s going to have to be some cost saving initiatives put in place real quickly, and some cost cutting,” Rastetter said. “So it just wouldn’t be right for the board to increase any wages at this time.”
That decision, which regents reached after spending the last two days evaluating the administrators in closed session, has nothing to do with the board’s opinion of their performance, Rastetter said. And, he said, the presidents are on board with their status quo pay.
“I think everyone is fine, everyone recognizes the world we live in — with funding,” Rastetter said.
University of Iowa President Bruce Harreld and Iowa State University President Steven Leath asked during their annual performance review in June — when the board typically approves pay raises and incentives — not to receive an increase.
That was when Rastetter said compensation would be reconsidered in January.
The board at that time awarded Executive Director Donley an $8,000 performance incentive, but he — like the UI and ISU presidents — didn’t receive an annual compensation bump. The board didn’t evaluate a University of Northern Iowa president at either meeting — because former UNI President William Ruud in June was about to leave for Marietta College in Ohio and Interim President Jim Wohlpart this week is preparing to cede his duties Feb. 1 to incoming UNI President Mark Nook.
Nook’s initial contract has him earning an annual salary of $357,110.
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The only institution head to receive a compensation bump in the summer was Steve Gettel, superintendent for the Iowa School for the Deaf and Iowa Braille and Sight Saving School. He, at the time, got a 2.5 percent pay raise along with $7,500 of a possible $20,000 performance incentive.
Months later, board staff realized they had erred in figuring Gettel’s raise and approved a new 5 percent increase, bringing his salary to $189,000. The board also upped his incentive payout for the previous year from $7,500 to $15,000 and set a new 2017 incentive at $15,500.
The board’s decision in the summer not to offer pay raises to Harreld, Leath, and Donley came just before regents approved another round of tuition increases — although Harreld and Leath said they requested the status quo pay months earlier.
The Gazette also had recently reported that Donley, in the 2015 budget year, earned more than double a salary cap set by the legislature. Due to $184,166 in board-approved bonuses and deferred compensation, Donley that year made $338,466 — which is more than twice his $154,300 salary cap.
The $8,000 performance incentive awarded to him over the summer had been approved last year, and Donley has two, two-year deferred compensation plans still scheduled to pay out — one for $125,000 and another worth $140,000.
The last time the board approved pay raises for the university presidents was in summer 2015, when regents offered Leath a 5 percent increase, bringing his salary in line with former UI President Sally Mason at $525,000. The board, at that time, also approved a new five-year deferred compensation plan for Leath, giving him $125,000 annually through 2020.
Ruud, at that time, got a 2.5 percent bump in his base pay, bringing his annual salary to $357,110 — along with a deferred-compensation plan with annual contributions of $75,000.
Harreld’s salary has remained the same since he started in November 2015 at $590,000 — with a five-year deferred compensation plan contributing $200,000 annually.
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