New fund will give IU president $10M

The IU board of trustees hopes giving the next IU president $10 million each year will help fund new initiatives and prevent some of the problems that have hindered Adam Herbert.\nSchool and campus administrators, however, are bracing for budget cuts across the University since the new President’s Fund will divert money they otherwise would have had.\nBecause of the way IU’s budget is set up, each school receives revenue directly from state appropriations, tuition and other sources. Money that goes to campus or University-wide programs, like the new President’s Fund, must be “taxed” and collected from the schools.\nOne-eighth of each IU campus’ new revenue – that is, the increase in revenue from year to year – will be taxed and sent to the president’s office. \nVice Provost of Budgetary Administration Neil Theobald projects the Bloomington campus will contribute about $5 million to the President’s Fund each fiscal year.\nThis new money, which will be collected annually starting July 1, will allow future IU presidents to undertake and fund initiatives and improvements that will move the University to the “next level,” said Board of Trustees President Stephen Ferguson. Presidential discretionary funds could have been helpful for things like starting the School of Informatics, jump-starting life sciences research or dealing with the athletics deficit, he said.\n“If the president doesn’t have any funds, it is very difficult to start new projects,” he said. “It doesn’t allow any maneuverability at all.”\nNot having discretionary money could have been one of the things that contributed to the trouble Herbert had during his tenure, Ferguson said.\n“When he became president, that was one of the biggest surprises to him – that the president doesn’t have any funds,” he said.\nThough most administrators agree the President’s Fund will help the University, financial directors at many of the schools are unhappy they must now cut a substantial amount of money from their budgets, Theobald said. \n“Nobody likes taxes,” he said. \nChris Puckett, the budget director for the College of Arts and Sciences, said the President’s Fund will cost COAS about $1 million. \nPuckett said it will be difficult to cut that amount of money out of the COAS budget, particularly since the decision to create the President’s Fund was made last spring and slated to take effect in the next budget.\n“I wish we had had more warning,” she said. “Ideally, they would announce it as a concept now for budget construction for 2008-2009.”\nBudget administrators do not know from which departments and programs the money will be collected, Theobald said. The only thing they do know is how much they need\nto collect.\nKurt Zorn, the chair of the committee charged with hammering out the details of the President’s Fund, said the trustees made the decision to find money for the IU president before the committee even \ncame together.\n“It was pretty clear that if we came back with a finding other than that we needed a discretionary fund, we would have one anyway,” said Zorn, who is the associate dean for fiscal affairs in the School of Public and Environmental Affairs.\nThe committee, with the help of Huron Consulting, decided to raise the funds by assessing the 12.5 percent tax, Zorn said. The Provost’s Fund already collects money on the Bloomington campus-level in a similar manner.\nThe task force chose to allocate the President’s Fund money with no strings attached, with the understanding that the president will have to justify major expenditures to the trustees and University faculty and administrators, he said.