IU withstands state budget cuts

IU's fiscal year 2004-2005 showed steady growth, despite challenges created by a lack of state appropriations, according to a recently released financial report.\nFor the fiscal year, IU increased its net assets by $119 million, compared to $114 million for the previous year, a 6.7 percent increase. Assets increased by $60 million for the year before that. The University ended the year with $1.9 billion in total net assets.\nPresident Adam Herbert and Vice President and Chief Financial Officer Judith Palmer both expressed optimism toward IU's financial position in the report.\n"We see IU in a position of strength," said Kathleen McNeely, assistant vice president and executive director of financial management services.\nThe two biggest areas where IU increased its revenues were through student fees and state appropriations.\nRevenue from student fees and tuition increased from $558.5 million to $600.3 million, or 7.5 percent. This was due to a combination of increased student fee rates and enrollment growth.\nPalmer said she couldn't say whether fee increases or enrollment played a larger role but noted some changes that affected the growth. More students are enrolling full-time instead of part-time at IU's commuter campuses, leading to more tuition. Palmer also noted that students are now paying IU's mandatory $1,000 Commitment to Excellence fund, which means a significant increase in revenue.\nState appropriations, which represent IU's largest single-source of nonoperating revenue, increased from $516.5 million to $530.6 million, a 2.7 percent increase. \nPalmer said IU is pleased with the increase, but she said she believes the limited growth in funds puts limitations of IU's long-range planning. She said IU uses most of the money for immediate concerns such as repair and restoration and current projects, instead of building itself for the future.\n"IU has been through a period where the state has had continually strained resources," she said. "Building our research capabilities puts a lot of pressure on us financially."\nTo counter this setback in growth, IU is taking an aggressive approach to next year's session of the state legislature. J. Thomas Forbes, IU's executive director for state relations, said IU isn't expecting huge increases right away.\n"Until the state's economy recovers, we have to work twice as hard until the money comes around," he said.\nIn order to persuade the state to provide more funding, the financial report took great strides to show IU's benefit to the state of Indiana.\n"The well-being of the state relies on the well-being of its universities," Forbes said. "We also have a responsibility to help the state grow its economy and, in turn, the state provides us with funding."\nIn the financial report, Herbert highlights some of IU's accomplishments that are beneficial to Indiana. He notes that 35 percent of Indiana's teachers, 90 percent of its dentists, 75 percent of its lawyers, 64 percent of its optometrists, 40 percent of its nurses, 50 percent of its physicians and 25 percent of its judges are all IU graduates.\n"This financial report demonstrates that Indiana University continues to regard the funding it receives as a public trust," Herbert said in the report. "Whether its resources are derived from state appropriations, student fees, donor contributions, grants or contracts, IU is committed to utilizing them in ways that reflect the high expectations of those we serve."\nHerbert also highlights IU's development in life sciences, including breakthroughs in cancer treatments and organ transplants.\nPalmer and Forbes both admitted that life sciences are an integral part of their strategy for lobbying the state, since they affect an item that always gets legislators' attention -- jobs.\n"It's a realization that IU has the only school of medicine in the state, and we are well-positioned to bring teaching, research and jobs to the state," Palmer said.\nIU won't be submitting its appropriations request until next year's session, but many officials at IU will be working behind the scenes during the upcoming session to prepare IU for its request.\nIU's financial report is compiled every year by the University's Financial Management Services. IU's group of accountants takes more than 1,000 hours during several works to complete the report. After that, IU's State Board of Accounts audits and certifies that the report is an accurate representation of IU's finances.\nMost years don't show any huge surprises in the financial report.\n"We really don't have any extreme fluctuation," she said. "What we do have fluctuation in isn't a huge part of our revenue."\nAreas such as state grants, which decreased by 2.3 percent, do not have a huge effect on the overall balances. As a result, IU's revenues have shown steady, but not extreme, growth over the last few years.