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Neighbors Growing Together | Oct 23, 2017

Higher education could see budget cuts still this year

Iowa must plug $100 million shortfall by end of this fiscal year
Jan 04, 2017


The Gazette

When lawmakers convene next week for a new legislative session, they’re expected to promptly address a nearly $100 million shortfall in the current state budget — and that could mean taking away some money already promised the Board of Regents.

“That’s a large number, and we will have gone through one half of the fiscal year,” said Sen. Bob Dvorsky, D-Coralville. “That means you only have half the budget left … and the regents are one of the bigger operations in state government.”

Lawmakers realized the shortfall last month when revenue estimators lowered the October tax collection target for this budget year by $96.2 million — requiring cuts in that amount before the fiscal year ends in June.

Sen. Herman Quirmbach, D-Ames, said he’s concerned for the regents and the public universities they oversee after hearing Gov. Terry Branstad recently announce plans to balance the budget without harming property tax credits, Medicaid and K-12 education.

“He did not mention that higher education would be held harmless,” Quirmbach said.

Quirmbach said Branstad has taken three-quarters of the budget “off the table.”

“Higher education is a lot of what’s left,” he said. “You are going to hit higher education pretty hard.”

Quirmbach said he’d support tapping state reserves to keep Iowa’s higher education institutions from taking a hit.

Regents President Bruce Rastetter said the board is in a “wait and see” mode about how much the state has to cut in the months ahead and how lawmakers will do it. But, Rastetter noted, he and others have been concerned about revenue based on a weakening agricultural economy.

“Naturally that affects all of state government, and the worry is that it also would affect education funding,” he said.

Looking forward to the board’s state funding request for the 2018 budget year, Rastetter said he remains hopeful.

The board for the first time is making its annual appropriations request as part of a two-year outlook that includes anticipated tuition increases.

“The good news is the governor appeared to really appreciate and like our two-year funding plan so that we can have visibility on tuition and costs and revenue for the universities,” he said. “So we’re hopeful that the revenue decline is primarily limited to this year and we can still have a real shot at our appropriation request.”

The plan envisions increasing both resident undergraduate tuition and appropriations requests by 2 percent in each of the 2018 and 2019 budget years. In addition, the board in the first year wants the state to provide an extra $2.5 million for the University of Northern Iowa. UNI has mostly in-state students who pay lower tuition that doesn’t cover the cost of education.

Sen. Dvorsky said he thinks the request is “fairly modest.”

“But I don’t know what the feeling will be with a new Republican majority,” he said. “It’s going to be a very, very tough year fiscally. It will be a dogfight on who gets the additional funding for education.”

Regents last month approved increasing tuition for resident undergrads by 2 percent — pushing rates to $7,270 at the University of Iowa and to $7,240 at Iowa State University and UNI. The board’s approvals included varying increases for out-of-state and graduate students and for students in some of the more expensive programs.

But the board calls its two-year plan “dynamic” — meaning it could revisit tuition if lawmakers don’t come through with the requested funding.

Rep. Pat Grassley, R-New Hartford, who co-chairs the legislative fiscal committee, in November expressed ideological support for the two-year plan and funding request. But he added, “We’ll have to see what the revenue estimate is in December to give us an idea of what the dollars look like.”

During a presentation in November, each of the board’s university presidents outlined how they would use the money and what they’re doing to create efficiencies.

UI President Bruce Harreld said his institution is hoping to save or generate nearly $12 million starting this budget year, and bring in an additional $16 million in tuition increases.

If lawmakers provide a 2 percent bump in appropriations — amounting to more than $4.6 million — the campus will have the resources it needs for students and faculty, Harreld said.

Should the Legislature fall short on ISU’s request, President Steven Leath said, his campus would struggle to provide a quality education for a student population that has grown 40 percent since 2007.

“This year, we’re receiving $3,300 less in state funds for each Iowa kid than we did eight years ago,” he said. “And that is huge, quite frankly. And we’re really struggling.”

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