Half of the $8.4 million budget deficit IPFW faces is attributed to revenue lost from declining enrollment. The other half of the shortfall stems from what Chancellor Vicky Carwein calls unfunded mandates.
The mandates are a host of items that the university is required to pay for but werent previously factored into the budget.
In years past, it was practice to simply pay these expenditures at the end of the year with the cash IPFW had on hand. But with a nearly 4 percent dip in enrollment, the university no longer has the extra cash.
Really what weve been living off of is our enrollment growth, said Walt Branson, vice chancellor for financial affairs. As weve tightened our budget, were not going to have year-end cash.
A resolution from the Faculty Senate that passed 19-11 on Wednesday asked the administration to use cash reserves – which total between $18 million and $20 million – to give IPFW time to get its budget in order. The resolution also called for seeking more input from faculty not in leadership positions and from all academic areas.
But $1 million is already being pulled from reserves to maintain some teaching positions, Branson said.
Carwein, who assumed chancellor duties in September, has directed the administration to balance its budget moving forward without using further cash reserves.
In my view, we need to have a budget process thats predictable not based on the expectation that money keeps coming in, she said, addressing the Faculty Senate during its meeting Wednesday. This institution cannot continue to function the way it has in the past.
About 40 percent of IPFWs roughly $112 million general fund budget comes from state appropriations. About 55 percent comes from student tuition and fees, and 5 percent comes from other sources.
For the upcoming budget year, which begins July 1, Branson said the university will assume flat enrollment, no salary increases for faculty, and a small tuition and fee increase. Both salary and tuition and fee changes require approval from the Purdue University Board of Trustees.
Branson said the administration wants to discontinue the practice of paying needed expenses from year-end cash and move to the point where expenses are known and budgeted.
It really isnt that what we were doing is wrong. Were just seeing the impact of this, he said.
IPFWs enrollment was 13,771 last fall. The year before, it saw a record enrollment of 14,326.
Where to cut?
The unbudgeted expenses account for about $3.4 million of the universitys budget deficit, with about $1.1 million from the academic affairs department.
These items include money to pay back the federal government for the financial aid of students who have dropped out and for the $236,000 salary of Chancellor Emeritus Mike Wartell, the universitys former chancellor. Wartell will retain his chancellor salary while on sabbatical and when he returns as a tenured chemistry professor.
Other faculty positions funded partly by outside organizations will now also be supported by the university.
In addition, IPFW will have some one-time expenses concerning its upcoming 50th anniversary, Branson said.
A total of $1.3 million in unbudgeted expenses will end up being cut as part of the budget reduction plan.
Other reductions will be taken from utilities, fringe benefits like health care, salaries of summer session employees and other areas, according to the budget presentation.
IPFW also recently handed out layoff notices for 18 positions, and an additional 24 vacant positions will be eliminated, all of which are non-teaching. These reductions account for about $1.5 million in savings.
The university may also discontinue its child-care center, The Learning Community, which serves 53 children of faculty and students and 67 children from the community.
George McClellan, vice chancellor for student affairs, oversees the child care center and said the university spent $214,000 on it last year. The Student Government Association also provided about $50,000 in additional funding, but it isnt sure it can commit that amount on a continuing basis.
An additional $80,000 could be used next year from the sale of the centers previous home at Stellhorn and Hobson roads, but that would still leave IPFW about $85,000 short.
Branson said the university may also outsource its police dispatchers and is considering a small reduction in police force because of budget issues.
Carwein has outlined the administrations guiding principles in budget cutting, including a commitment to preserving the universitys academic mission.
But some faculty members dont believe this is the case, citing the decline in the number of teaching positions in the past couple of years and the lack of involvement of faculty in the process.
To me, the ultimate guardians of the academic mission are the faculty. Why werent we asked? That never occurred, said Mike Nusbaumer, speaker for Indiana University faculty.
Nusbaumer raised the same point at a Faculty Senate meeting in January. He also said the budget reduction process wasnt transparent and lacked long-term planning for where and how cuts were made.
Branson said the administration believed that faculty leadership thought the process was moving in the right direction.
We havent done this in a vacuum, he said.
Marc Lipman, a member of the faculty and the University Resources Policy Committee, said some faculty were involved and had input in the process.
No one is enjoying the fact that we have to do this, he said. I dont believe theres any way to do this that isnt painful.
Although the layoffs didnt involve teaching positions, a total of 14 vacant teaching positions will go unfilled for next school year. The College of Arts and Sciences took the biggest hit, losing 10 faculty members.
Steve Sarratore, vice chancellor for academic affairs, said eliminating vacancies wasnt a strategic process in that the administration eliminated positions based on what was open, but planning was required to prioritize which positions needed to be filled.
He said searches are under way to fill nine tenure-track faculty positions for the coming year.
Moving forward, Carwein said the university will use more strategy and planning in eliminating vacancies. She also outlined a budget process that allows input from more members of the IPFW community.
Branson said the plan is geared at trying to get more input and trying to create a more deliberate process.
It also establishes a university budget committee and calls for departmental budget requests outlined by department chairs and faculty from within colleges.
And despite next years budget plan assuming flat enrollment, McClellan said enrollment applications are up about 25 percent from this time last year. His department is also looking at initiatives to retain more students and to convert high school students taking college-level courses into full-time students the next year.
Branson said the university has also been looking at continuing and improving retention initiatives.
One way to increase revenue is to keep students here and eventually get them their degrees, he said.