Iowa university presidents cut millions in spending but say they still need big tuition hikes

The presidents of Iowa's three state universities told the state Board of Regents on Monday they have made cuts that have saved $55 million to $60 million in the past three years — but tuition hikes are still needed.

The detailed cost savings since 2014 at the University of Iowa, Iowa State University and the University of Northern Iowa were supplied to the Iowa Board of Regents to demonstrate that the institutions are operating as efficiently as possible as the presidents request major student tuition increases.

During three task-force meetings, officials from the University of Iowa and Iowa State University asked for a roughly 7 percent increase in resident undergraduate tuition next year, followed by similar increases the following four years.

UNI officials also have proposed a range of tuition increases, depending on state funding levels.

“We are committed to making tough decisions about what we should be doing, as well as what we should stop doing," said Iowa State University interim President Ben Allen, explaining this institution's cuts.

More: Regents detail secret Harreld meetings during University of Iowa search

Allen described cost-control measures at ISU that have included steps to hold down health insurance premiums, reorganize university staff and faculty, require more efficient use of mobile phones and reduce overtime expenses for campus police.

University of Northern Iowa President Mark Nook said more than $10 million in savings have been achieved at UNI by renegotiating bonds, while information technology expenses have been trimmed by $852,000 the past two years.

More than $300,000 has been cut by reducing costs for adjunct facility, and utility efficiencies have cut more than $3.7 million in bills.

University of Iowa President Bruce Harreld said four-year graduation rates in Iowa City have improved, while costs have been maintained.

Harreld also said millions of dollars are being reinvested annually through a program of looking at the way the University of Iowa delivers administrative and academic services and considering new approaches and service models.

“The DNA on our campus is a culture of continuous improvement," said Harreld, who disputed the "often-stated narrative that universities are fat and bloated."

Regent Larry McKibben, a Marshalltown lawyer and former state legislator, said after the meeting he was "very, very pleased" with the presentations of the three universities' presidents.

It's just the beginning of changes in institutional mindsets that can help hold down tuition increases, he said.

But McKibben, who chaired a Board of Regents' tuition task force, also bluntly said tuition must be raised at Iowa's universities to maintain educational quality.

“No question about that. But we hope that the state of Iowa will do better in the financing part of it so that we don’t have to increase the tuition at the levels that they have talked about," McKibben said.

UNI's tuition increase request for next year is a 3.9 percent if state funding rises with inflation, a 6.7 increase if state funding holds flat and an 11.7 percent increase if state funding drops by more than 3 percent.

The board is scheduled to provide a first reading of proposed tuition increases during its October meeting.

A second reading and vote on the proposal is scheduled for the board's December meeting.

Dr. Michael Richards, a West Des Moines businessman who is the Board of Regents' president, said the three universities "are doing more things than they get credit for."

But he added: "You can always do more. I came from private industry the past 20 years, and you are never done."

Harreld said the Iowa Legislature will have several choices in making decisions about state funding for higher education and educational quality.

One question is whether the University of Iowa should try to compete against other Big Ten educational institutions such as Ohio State University, Indiana University, the University of Illinois, University of Wisconsin and the University of Minnesota, he said.

"If we said we don’t want to compete with those other institutions, then we don’t have that big of a gap" in funding, Harreld said. 

Regents ask for funding increase

The regents voted Monday to ask the Iowa Legislature for a 2.6 percent increase in state funding for the 2018-19 academic year, promising to use most of the additional money as direct financial aid for resident undergraduates.

The budget request totals $622.35 million, which would be $16 million more than current state funding. A total of $12 million of the extra cash would be targeted for increasing financial aid options at the University of Iowa, Iowa State University and the University of Northern Iowa.

The proposed request comes after the three universities saw their state funding cut this year by more than $30 million. Tuition increases helped make up for those funding cuts at the University of Iowa and Iowa State for the current academic year.

UNI's 2017-18 budget, however, is $500,000 less than the year before.

The proposed request includes $5 million in additional financial aid for UI and ISU and $2 million for UNI.

The regents also are asking for an additional $3.2 million in the amount of money the state reimburses the universities for the debt service costs attached to issue bonds for the construction of academics-related buildings. 

State law requires the state agencies to submit additional budget requests to the Department of Management by Oct. 1. 

Reynolds wants 'affordable' college

Gov. Kim Reynolds told reporters Monday she wants to keep costs "affordable" for Iowa students attending state universities, but she declined to say what level of tuition she is willing to support.

Reynolds said she won't make any decisions on proposing a new state budget — which will include funding for state universities — until after a state revenue forecasting panel meets in December.

This story includes information from Register reporter Brianne Pfannenstiel.