TERRE HAUTE — State funding cuts at a time of increasing enrollments have put a strain on Indiana public higher education, says Teresa Lubbers, Indiana commissioner for higher education.
At the same time, nearly two-thirds of all new jobs today require education and training beyond high school — and Indiana will need to produce at least 10,000 more college degrees each year through 2025 to meet work force needs, she said.
That will require greater efficiencies from the public institutions as well as expanded, flexible options, including more online learning.
A better-educated work force will mean a higher standard of living for those workers, and it will help attract more jobs to the state, she said.
In addition, the research campuses — Indiana University-Bloomington, Purdue West Lafayette and IUPUI — have a key role to play in economic development and job creation, Lubbers said.
In December, with tax revenues far below projections, Gov. Mitch Daniels ordered a $150 million cut in state higher education funding.
Colleges such as Indiana State University, with higher state funding per student, and those not making as much progress toward degree completion goals sustained greater proportional cuts.
ISU, which took the hardest hit, was cut 6.6 percent, or $10.5 million. Indiana University was cut $59 million, or 5.8 percent (systemwide); Purdue, $45 million, or 6 percent systemwide; and Ivy Tech, $11.9 million, or 3.5 percent.
In response, ISU has made more than $11 million in permanent budget reductions for fiscal years 2010 and 2011, said Diann McKee, vice president for business affairs.
To reduce $8.5 million in expenses for fiscal year 2011, ISU eliminated 109 positions; reduced supply/equipment expenses; renegotiated telecommunication contracts; eliminated a retail postal operation; and increased administrative overhead contributed by the housing and dining systems for utility costs. Other personnel cuts occurred the year prior.
Many other initiatives have been taken; some of those will realize cost savings over a period of time rather than immediately.
“With reductions in personnel, remaining employees are absorbing increased workloads and services in some areas have been reduced or eliminated,” said Diann McKee, ISU vice president for business affairs. However, every effort has been made to maintain or improve services to students, she said.
Students in some cases are experiencing larger class sizes. The recession has also hindered ISU’s ability to provide salary increases for the past two years, although this fall’s 9 percent enrollment increase has helped make it possible to provide a raise this year.
Deferred maintenance of campus facilities continues to grow as state funding for repair and rehabilitation has been eliminated, McKee said. A partial replacement with federal stimulus dollars by the state has provided some assistance.
With state revenues still well below projections, “We must be as efficient as we can,” McKee said.
At Ivy Tech, the cut in state funding meant a flatlined budget for the community college system.
Flatlined funding coupled with record enrollment increases has meant that Ivy Tech’s state funding per FTE has dropped 38 percent in the past two years, said Jeff Fanter, Ivy Tech vice president for communications/marketing.
In anticipation of possible cuts, Ivy Tech found efficiencies statewide and internal savings, and it has been able to do this with minimal tuition increases, Fanter said.
The community college continues to see enrollment increases of both traditional and nontraditional students. “Many of the emerging and hot jobs require the credentials and degrees that Ivy Tech awards,” Fanter said.
Purdue dealt with budget cuts through energy conservation measures, limited hiring, limited travel, deferred purchases and other measures. It also cut back on facility maintenance.
“At the same time, we were projecting that we needed to realign our budget by $67 million to meet future needs,” said Jeanne Norberg, Purdue spokeswoman.
Purdue has or is working to cut $74 million in non-recurring and $41 million in recurring costs through integrating information technology functions; reduced energy costs; overtime policy changes; group purchasing; deferred repair/rehabilitation; personnel cutbacks; and a two-year salary freeze. In addition, Purdue is looking at ways to cut health care expenses.
(On Oct. 15, the Purdue board of trustees voted to approve a 1.5 percent, merit-based pay raise. It also voted to increase premium medical costs, with employees paying an average of 6 percent more in annual costs).
Last December, IU announced $177 million in one-time and recurring cost reductions that included a salary freeze in 2009-10; travel budget cuts; refinancing of debt; information technology savings; reduced retirement benefits for new employees; savings in general administrative costs; and self-funding of employee health care plans, among other measures. (In August, IU trustees approved merit-based pay raises averaging 3 percent).
IU also is looking at ways to reduce employee health care costs.
At the same time, enrollment has gone up 1.8 percent systemwide. IU spokesman Larry MacIntyre suggested students are staying in school to complete their degrees because it will make them more competitive in the job market.