Education

Iowa regents OK cuts to university budgets, presidential compensation

Harreld decries claims of 'administrative bloat'

Regent President Michael Richards talks during a Board of Regents meeting at the Iowa Memorial Union in Iowa City on Thu
Regent President Michael Richards talks during a Board of Regents meeting at the Iowa Memorial Union in Iowa City on Thursday, Sep. 13, 2018. (Stephen Mally/The Gazette)

In lopping over $65 million from Iowa’s public universities in fiscal 2021 to help account for losses from COVID-19, state funding cuts and enrollment declines, the state Board of Regents on Wednesday praised its campus presidents and administrators for making sacrifices.

Acting to take account of the losses — which projected a $53 million drop in tuition income alone — regents approved pared-down general operating fund budgets of nearly $728 million for the University of Iowa, $630 million for Iowa State University and $170 million for the University of Northern Iowa. That doesn’t include the UI Hospitals and Clinics.

Regents praised the campus leaders for sharing in the losses by cutting their compensation.

“I have been personally very impressed by our institutional leadership agreeing to take pay reductions to help with the economic challenges our schools are facing,” said board President Mike Richards. “One key aspect of leadership is being able to let your organization know that we are all in this together. Our leaders, both on the academic side as well as the athletic side, have shown the willingness to make significant personal sacrifices for the betterment of our staff and students.”

The universities, which have announced plans to return students to campus this fall with a combination of in-person and online courses, nonetheless still faces more financial uncertainties as the pandemic persists.

The board approved the following compensation changes for the presidents of its universities:

University of Iowa President Bruce Harreld will take a 50-percent cut to his $590,000 base pay for the rest of the budget year, a one-time savings of $270,416;

• Iowa State University President Wendy Wintersteen will take a one-year 10-percent cut to her $590,000 base pay, amounting to $59,000;

• And University of Northern Iowa President Mark Nook will shave $42,110 from his $357,110 base pay through the end of the budget year — while also cutting his annual deferred compensation payments from $100,000 to $50,000 through June 30, 2022.

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Harreld and Wintersteen also have deferred compensation plans scheduled through 2023 — paying out $2.33 million to Harreld and more than $1 million to Wintersteen. They have not announced making changes to those plans.

The board also Wednesday agreed to establish a new deferred compensation plan for its executive director, Mark Braun, that makes annual contributions of $145,000 through June 30, 2022. Richards noted Braun voluntarily took a 16.5 percent pay cut.

Administrators across the campus’ athletics departments also have taken pay cuts — including high-profile football, basketball and wrestling coaches Kirk Ferentz, Fran McCaffery, Lisa Bluder and Tom Brands at the UI.

Budget reductions have translated to faculty and staff furloughs, pay cuts, lost raises and hiring freezes across the campuses. They’ve halted construction and consolidated programs.

UI President Harreld, in spelling out his campus’ method of making cuts, highlighted the institution’s relatively new budget model giving decision-making power to colleges and units.

“We’ve empowered leadership at the local level to manage their individual budgets, based upon their expected resources,” he said. “This allocation is no longer being done to them.”

Plus, he said, different economic realities exist for each college and its parts — and Harreld said just four of 12 UI colleges will see a decrease in their budgets this year.

“Said another way, that means that eight out of our 12 colleges — or two thirds — will see an increase in their projected FY21 budget,” he said, stressing, “This budget model also was created to ensure that the central service units are as efficient as possible.”

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To that point, Harreld took issue with a recent opinion column by Randy Evans, executive director of the Iowa Freedom of Information Council, arguing Iowa’s regent universities are top-heavy and suffering “administrative bloat.”

In making the argument, Evans cited reports in The Gazette about recent UI settlements that reassigned top administrators to newly-created posts that continued paying a vice president-level salary.

But Harreld said UI administrative costs actually are below the average of peer schools.

“Maybe a little data will help,” he said. “The American Council of Trustees and Alumni measured tier one universities across the country, and across the board the average amount of administrative costs were 17 cents per dollar … At the University of Iowa, it’s 13 cents per dollar. That’s 23.5 percent lower than the average,” Harreld said. “So, let’s please calm down. There’s not administrative bloat. There’s actually just the opposite.”

He also noted: “I’m sorry that people have a keyboard and they can type whatever they want without checking the facts.”

When Regent David Barker asked if the UI has felt cramped by lack of administrative support, Harreld said, “I think we’re below the right place, to be honest. I feel several strains, every day,” he said. “I feel like we’ve gone a little too far. So I get really kind of annoyed when people say there’s administrative bloat going on. Give me a break.”

Among the UI budget changes made in light of this year’s pandemic-driven losses and new expenses — exacerbated by an $8 million cut in state appropriations, projected drops in enrollment and a tuition freeze — was one phasing out general education support for Hancher Auditorium.

“Given that state support of the University of Iowa was now below fiscal year 1998, the university can no longer allocate $1.5 million a year to supporting Hancher,” Harreld said. “Said another way, we can no longer use resources that are primarily student tuition to support a community asset.”

The UI plans to phase out general education support for Hancher over three years, though plans for how the venue would cope are unformed.

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In discussing cuts at ISU, Wintersteen suggested the potential for 100 faculty reductions by attrition, helped by a retirement incentive.

“Our financial challenges cannot be understated,” she said, calculating total projected revenue losses since the pandemic began through fiscal 2021 at $114 million.

Comments: (319) 339-3158; vanessa.miller@thegazette.com

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