Coronavirus-related losses are continuing to swell across Iowa’s public universities, surpassing previous estimates and prompting difficult decisions and extreme measures — including at Iowa State University. The school is cutting pay, nixing raises, halting construction and offering early retirement incentives.
ISU President Wendy Wintersteen, in announcing deeper across-campus budget reductions, recently reported she’s taking a 10 percent salary cut for the budget year that started July 1. Now earning base pay of $590,000, her cut amounts to $59,000.
University of Iowa President Bruce Harreld — whose campus also is facing tens of million in COVID-19 losses — recently announced he’ll take a 50-percent base pay cut for the rest of this budget year, amounting to a one-time savings of $270,416, which he’ll funnel into a Student Emergency Fund.
In addition to their base salaries, the presidents — who received contract extensions last summer — get annual deferred compensation contributions scheduled to pay out in 2023 in the amount of $2.33 million for Harreld and $1 million for Wintersteen. The state Board of Regents’ annual performance reviews of its presidents and executive director are scheduled for next week.
Earlier this year — with much still unknown about how long the pandemic would persist and how the virus would progress in the summer — Iowa’s public universities projected losses through August reaching $89 million for Iowa State, $28 million for University of Northern Iowa, and $76 million for UI — excluding its Hospitals and Clinics operation.
Wintersteen in her recent campus communication updated the ISU budget picture — calculated to address “unprecedented revenue losses” from COVID-19, expected enrollment drops, state funding cuts, curtailed indirect cost recovery and new expenses involved in keeping campus safe this fall.
Now revenue losses projected for ISU’S educational fund in the new budget year top $41 million. In addition, revenue losses and costs since the pandemic’s onset in Iowa through Aug. 23 are estimated at $73 million, according to Wintersteen.
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In light of those earlier projected losses in the tens of millions, Wintersteen in April asked campus units to trim 5 percent from their budgets for the 2021 budget year and plan for an additional 5 percent cut for fiscal 2022.
In her new message, Wintersteen confirmed the 5 percent cut in 2021 — including to administrative costs in academic affairs, operations and finance, student affairs, and presidential divisions and units — and the loss of performance-based pay raises for faculty and non-unionized staff.
She confirmed the need for another across-campus 5 percent cut in fiscal 2022; a 2 percent reduction in its retirement match for 10 months; a temporary freeze on renovation and capital projects — except if they involve donor funding or safety needs; a new senior administrative approval process for all faculty and staff job postings; and a change to the employee tuition reimbursement program.
That program now only will support courses taught at Iowa State.
“We have heard feedback from employees currently taking courses outside of ISU and are evaluating other interim options for support,” Wintersteen said in her message.
‘Use every tool’
In hopes of avoiding layoffs, ISU later this month will ask the Board of Regents to approve a “voluntary retirement incentive program” that could give units another budget-cutting tool and empower employees to “make their own personal decisions.”
More details of that program are expected July 20.
Iowa State also is reviewing its health benefit costs — in that premium costs in its ISU Plan have remained stagnant for six years, while health costs have climbed.
“I have instructed the university benefits committee to review the health benefit plans and other benefits and to provide recommendations on how these costs can be reduced for the university during calendar year 2021,” Wintersteen wrote, noting more budget-cutting measures could become necessary if unforeseen circumstances arise.
“We recognize that budget planning will continue to be impacted by the ongoing COVID-19 pandemic, and must be aligned with the university’s expected future enrollment, since 70 percent of our educational financial resources come from tuition revenue,” she wrote. “We will need to ensure that programs, administration, and services are sized appropriately relative to projected enrollment.”
On the UI campus, President Harreld in announcing his pay cut and widespread hiring and salary freezes last week revealed a three-year plan to make Hancher Auditorium self-sustaining — like the university’s housing and dining operation and athletics department.
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In that those entities don’t receive general fund support, they too are facing massive budgetary blows right now — from spring and summer sport losses to fall unknowns and expansive housing and dining refunds afforded students sent home in the middle of the spring semester.
Those entities have imposed temporary layoffs and salary cuts across athletics.
Wintersteen in her recent message acknowledged challenges facing Iowa State’s self-supported entities and the freedom department heads and other administrators have in trimming their budgets.
“They may need to consider whether layoffs and other actions are necessary to meet specific budget-reduction targets,” she said. “But our leaders should use every tool at their disposal, and take an all-funds budgeting approach, to maintain our mission of excellence in teaching, research and extension and outreach, and benefit from the innovation of our faculty and staff in the planning process.”
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