IU could increase tuition because of economic troubles

Ambitious plans and a sputtering economy might put pressure on IU trustees to find other ways to balance their budget, such as increasing tuition and cutting back on employee pay, IU officials said.

IU President Michael McRobbie presented the 2009–2011 budget to the Indiana Commission for Higher Education on Oct. 10. But, with the current credit crisis, there’s concern about where the money will come from and how it will affect students, faculty and staff.

As McRobbie continues his ambitious plans for IU’s 2010-11 school year, the University asked for $513 million for the operating budget, $58 million for repairs to the outside of buildings and $206.9 million for other capital projects, such as new buildings.

The commission will then make its report to the governor, and then the plan will go to the legislature. In April, the trustees will meet to decide tuition for students matriculating into IU the next two years, said IU spokesman Larry MacIntyre.

Tuition and state funding are the big sources of revenue, said Neil Theobald, vice president and chief financial officer for the University.

If, because of the economy, state funding and endowment returns are less than usual, IU will be forced to find other ways to come up with the money, Theobald said. He added that there are a lot of options.

One way, Theobald said, is to spend less. He said the University can reduce the amount spent on pay increases and hire fewer people.

“Anything you do on operating side involves paying people or hiring fewer people,” Theobald said.

Another way, he said, is to raise tuition.

While the operating budget is funded by tuition, capital projects are not, MacIntyre said. For the 2008-09 school year, the state didn’t provide $13.5 million of the $504.7 million IU asked for in its operating budget request. It provided about half of the money for capital projects, and for building repairs, it held back $3.3 million.

Even so, when state funding didn’t come through for the Cyber Infrastructure building, IU took money from salary increases, among other sources, Theobald said.

Theobald said an option is to take from IU’s general fund, which is funded partly by tuition, though MacIntyre said they don’t take from IU’s general fund.

Funding for buildings is not allowed to be used for salaries.

McRobbie said it’s hard to predict where the economy will be in a few months, and when asked last week if tuition would increase more than usual, he said, “It’s far too early to tell.”