Regents consider approval of fiscal 2021 budget amid financial loss due to COVID-19, decreased state funding

The state Board of Regents saw a $65.4 million decrease from fiscal 2020 to its general university operating budgets in fiscal 2021, as Iowa’s three public universities respond to the financial impact of the coronavirus.


Wyatt Dlouhy

Iowa Board of Regents President Michael Richards sits alongside President Pro Tem Patty Cownie during a meeting at the Iowa State Alumni Center in Ames, Iowa, on Thursday, June 6, 2019. The Regents voted in favor of a four percent tuition increase starting in the fall semester of 2019.

Katie Ann McCarver, News Editor

The state Board of Regents will consider approval of a major hit to its fiscal 2021 budget at its July 29 meeting, which includes significant decreases in institutional budgets and finances stemming from the COVID-19 pandemic, as well as reallocation of decreased state appropriations.

According to regent documents, the general university operating budgets for fiscal 2021 are $65.4 million less than those of fiscal 2020. Iowa’s three public universities — the University of Iowa, Iowa State University, and the University of Northern Iowa — will see a decline in revenue due to a June decision by the regents to freeze tuition rates because of COVID-19 and the Iowa Legislature’s decision to cut state appropriations by $8 million.

“The COVID-19 pandemic has placed us in unprecedented times,” the documents state. “As with all of society, Iowa’s Regent Universities have undergone massive disruptions, and been forced to adapt their educational environments based on current conditions.”

The athletic budgets for fiscal 2021 will be outlined in greater detail in September, the documents read, due to the volatility of fall sports because of the ongoing pandemic.

Residence and dining systems are self-supporting operations included in the regents’ restricted-fund budgets. Residence system rates for fiscal 2021 total approximately $194 million across the institutions, according to regent documents.

The UI’s residence system budget — updated to reflect revenue and expense estimates based on its current occupancy projection and the impact of COVID-19 — totals just over $5 million, a nearly $8 million decrease from its initial revenue projection in February. The UI preliminarily projected an occupancy rate of 6,225, which has decreased to 5,700.

According to regent documents, university support for Iowa Public Radio will be eliminated completely in fiscal 2021.

RELATED: Iowa Legislature cuts state appropriations to regent institutions by $8 million

The UI’s fiscal 2021 budget model aims to develop funds that reinforce campus principles and its Strategic Plan, while also addressing decreased state appropriations. The university projects an $18.1 million total decrease in revenue, due to projected changes in tuition and state revenue. This is a 2.4 percent decrease from fiscal 2020, according to regent documents.

Of the $8 million reduction in state appropriations that was allocated between the regents’ three public universities, the UI lost $3.1 million in funding.

The UI anticipates a decrease of $14.8 million, or 3.1 percent, in tuition revenue because of decreased enrollment for the incoming freshman class due to uncertainty surrounding the coronavirus pandemic, and frozen tuition rates.

“However, focused enrollment management efforts plan to yield a diverse yet more prepared freshman class allowing for improved retention and time to graduation,” regent documents state.

In an effort to decrease university spending in fiscal 2021, the UI will reduce President Bruce Harreld’s base salary by 50 percent, effective August 1. The one-time allocation of $270,416 will go to the Student Emergency Fund. 

The UI will also reduce financial support for Hancher Auditorium, implement hiring and salary freezes recommended by collegiate and administrative units, and will not renew contracts of some instructional-track faculty and instructional assistants in one collegiate unit.

“[The UI] is committed to identifying new ways of meeting the needs of its students and will focus efforts on sustainable means of helping students graduate on time and receive the highest value education it can provide,” regent documents state. “For FY 2021, the University is estimating that the student aid budget will not change significantly from FY 2020.”

The proposed fiscal 2021 operating budget for UI Hospitals and Clinics is $1.79 billion, which was driven by the university’s commitment to innovative care, excellent service, and exceptional outcomes, according to regent documents.

The UI noted in regents’ documents that ever-increasing financial pressures on the health-care industry because of COVID-19 have governmental and non-governmental payers seeking to reduce health-care costs, which increases risk moving into fiscal 2021.

According to regent documents, the UI’s State Hygienic Lab saw a supplemental state appropriation of $525,578 to its fiscal 2020 budget, because of additional testing activities related to COVID-19.

“Iowa’s Regent Universities are among the best in the nation, and despite challenges, must continue to deliver the first-class education that our students deserve,” the documents state.