As inflation increases costs, and state appropriations remain stagnant, Iowa State University is having to do more with less.
The state’s second-largest public university will see a 3.1% increase in its total budget in the coming fiscal year.
The Iowa State Board of Regents is set to give final approval to ISU’s budget for Fiscal Year 2027 — which began on July 1 — at its next meeting on Wednesday, July 29. Here’s what to know:
Tuition hike drives $25.5 million in revenue growth
ISU’s budget is expected to grow by $26.1 million or 3.1% this fiscal year, with a $25.5 million tuition hike driving the university’s revenue growth.
The growth comes from a 4.5% overall increase in tuition revenue, driven by a 3% increase in undergraduate tuition approved by the Regents in April and a slight increase in enrollment, according to a regent memo.
In total, ISU plans to bring in $588 million in tuition revenue and $229 million in state appropriations.
Salary growth, financial aid largest drivers in Iowa State’s increased spending
A $22.4 million increase in salaries and a $16.7 million increase in student financial aid are the largest drivers of increased spending, while all other categories saw cost savings. The large increases result in a 4% overall salary cost increase to over $580 million, and financial aid will increase by $16.7 million to over $164 million.
Offering competitive salaries and benefits to faculty and staff is a key driver of increased salaries, as ISU, along with the University of Iowa, competes with other universities.
Additionally, universities are facing rising costs for supplies and services, with inflation outpacing tuition increases, pushing ISU to cut millions in spending.
All spending, excluding salary costs, increased by only 1.3% or roughly $3 million.
According to the Bureau of Labor Statistics’ Consumer Price Index, a tool used to measure inflation, prices have risen by 3.5% since last July.
Staffing attrition, efficiencies save Iowa State University millions
ISU saved roughly $6.5 million in staffing costs through attrition and retirements.
Productivity improved through automation in the finance department, according to a regent memo.
The largest savings came from a $25.6 million reduction in spending from regent-wide procurement contracts.
Liam Halawith covers Johnson County local government, the University of Iowa, and crime for the Press-Citizen. Reach him by email at lhalawith@registermedia.com. Follow him on X at @liam_halawith.
This article originally appeared on Ames Tribune: Iowa State budget grows by 3.1% as inflation outpaces state funding
Reporting by Liam Halawith, Iowa City Press-Citizen / Ames Tribune
USA TODAY Network via Reuters Connect
By Liam Halawith, Iowa City Press-Citizen | USA TODAY Network
