Requested 4.2 increase in budget to help health care, building repairs

On Nov. 17 IU President Michael McRobbie requested a 4.2 percent budget increase from the Indiana State Budget Committee.

If IU receives the money, Neil Theobald, vice president and chief financial officer at IU,  said the major financial issues the school faces — and where some of the money would be used — is the rapid increase of health care.

“We spend close to $200 million a year paying for health care for our employees, and that amount continues to increase each year,” Theobald said.

On the Bloomington campus, the money would also be used for the continual repair of some of the older buildings.

“Those are expenses you simply can’t avoid,” Theobald said.

Commitments to incoming students for financial aid and rising energy and gasoline costs are made before IU determines what the state budget is going to be and how much money the school is going to receive.

When asked what happens if IU doesn’t receive the extra money, Theobald said, “We will have to find ways to cut cost.”

To do this, IU is currently working on a benchmarking initiative to determine whether or not the University is operating as efficiently as possible.

“We’re seeing how our costs structure and our output compare to other universities throughout the country,” Theobald said. “In general we are always looking at ways to be more efficient.”

The SBC is composed of monetary analysts who work with the Indiana legislature to develop the state’s budget. Members use a formula designed by the Indiana Higher Education Commission to decide how much money each state university receives.

“It’s a formula that’s used to establish the recommended level of support for each of the state’s higher education institutions,” IU Spokesman Larry MacIntyre said.

Theobald said the formula includes IU’s enrollment increases, the number of degrees IU issues each year, the percentage of in-state students and other factors.

“That then generates a state calculated amount,” Theobald said. “That’s the basis for the increase, that’s how we came up with the numbers.”

Through the use of this formula, McRobbie told the committee that IU would need a $22.5 million funding increase for the 2011-13 budget cycle.

Because it is the state’s formula that came up with the proposed increase, Theobald said he is confident IU will receive the money.

“I think the state has treated us really fairly up until now,” Theobald said. “I’m optimistic based on past experiences.”

If IU doesn’t receive the money, Theobald said he is hopeful the University will be able to handle the budget.

“We are a very efficient operation, so we’re quite used to dealing with difficult economic times,” Theobald said. “We’ll do it and try to make the changes as far away from the classrooms as possible.”