FORT WAYNE – An enrollment dip, rising operational costs and the uncertainty of state funding have caused IPFW to ramp up discussions about difficult cuts to its declining budget.
For the upcoming budget year beginning July 1, the university is facing a budget deficit up to $4.2 million. Such cuts are unlikely without at least some layoffs, said Walt Branson, vice chancellor for financial affairs.
Academic department heads have already been tasked with presenting options to the administration for cuts.
An exact figure remains fluid, Branson said, because the state legislature hasnt approved the next two-year budget, which will include allocations for state universities. Depending on state appropriations and fall enrollment, IPFWs shortfall could rise as high as $9 million.
That really is the worst-case scenario, Branson said.
About 40 percent of IPFWs roughly $112 million general fund budget comes from state appropriations. About 55 percent comes from student tuition and fees, and 5 percent comes from other miscellaneous sources, Branson said.
Several factors contributed to the sharp decline in revenue in just one year, while utility and health care costs continue to rise.
Funding formula changes
We used to be funded based on getting students in the door, Branson said.
But the state Commission for Higher Education – a governor-appointed, public body that serves as a coordinating agency for state-funded postsecondary institutions – has moved some funding for colleges and universities using performance-based formulas. The agency is providing incentives for universities achieving certain standards on measures like graduation rates, Branson said.
After plugging IPFW data into these formulas, the university was projecting its state funding to decrease by about $1 million for the upcoming year.
Branson said the commissions request for funding from the legislature included an $800,000 increase for IPFW. But Gov. Mike Pences recommendation called for a $400,000 cut in funding for IPFW.
Therere huge swings in these numbers, Branson said.
Moving forward, Branson said the university cant predict what its funding will look like in the coming year. In recent years, the legislature has continued to shrink funding for state universities.
IPFW has been and remains among the lowest-funded state universities, sitting currently at 13th among 15, Branson said.
Republican legislators said this week that they intend to increase funding for both K-12 schools and higher education, but no figures have been provided.
In the fall of 2011, IPFW enrolled a record-breaking 14,326 students and increased tuition by 2.5 percent.
But last August, the university enrolled 13,771 students for fall classes – a 3.9 percent drop. The number of credit hours taught also fell by 6.1 percent.
Our two biggest income sources are getting cut, Branson said.
The decline in the fall enrollment amounts to about $4.2 million in a loss of revenue for IPFW, Branson said. That enrollment figure is used as a baseline to create the budget for the upcoming year.
The university attributes the decline to several factors, including tougher admission standards, which Branson said have students interests at heart.
Students with poor grades or low college-entrance exam scores struggle in college courses and sometimes leave with high debt and no degree, he said.
And with the performance-based funding proposed by the Commission for Higher Education, the university risks funding when admitting students who might not be ready to take college-level courses.
Branson said it really is a balancing act with its open-access policies.
The federal government has also begun pulling federal aid for students who consistently receive low grades.
Branson said the move has cost the university students, contributing to the drop in enrollment.
Included in fall enrollment numbers are about 2,700 dual-credit students or high school students who take college-level courses at a reduced rate and receive both college and high school credit.
The state has encouraged more students to take these higher-level courses by requiring them for high school diplomas with academic honors. To fulfill the requirement, students can also take advanced courses in the high school setting, but have to receive a certain score on a standardized test before receiving college credit, making dual enrollment courses on college campuses more attractive.
Universities are required to offer these courses at a lower price. Branson said a list of priority courses, which make up the majority of its dual-credit courses, must be offered at $25 per credit hour, or 10 percent of what IPFW students pay per credit hour. If a high school student qualifies for free- or reduced-price lunches, the courses are free. This makes these courses affordable for high school students and their families but results in a loss of revenue for the university.
In addressing the budget shortfall, Branson said the goal is to not affect academic programs or hurt enrollment through cuts to student services. He admitted meeting that goal becomes more challenging as the deficit increases.
We will likely not get through this without some layoffs, he said.
He said the university would be looking to increase tuition to generate more revenue, but wouldnt comment on a specific increase. The university is required to hold a public hearing prior to any increase.
At this point, its still a process, said Steve Sarratore, vice chancellor for academic affairs, who is compiling suggested cuts from department heads. Were not certain what impact on academic affairs this will have.
But Sarratore said its important to prepare cuts with suggestions coming from those closest to students.
I can cut budgets with a pen, but I couldnt do it as strategically and intelligently as department heads and faculty could do it, he said.
IPFW has already made some changes in its physical plant operations. Third-shift cleaning crews have been moved to second shift, so mechanical systems can be shut off when buildings are not in use. Trash pickup and mail delivery has also become less frequent on campus.
Branson said the university hasnt laid off any employees so far, at least none who are directly attributed to budget cuts.
The majority of cuts will involve closing vacant positions, he said.
Faculty positions that need to be filled could be done so using a part-time instructor.
Thats not to say we wont fill some faculty positions, he said.
Voluntary reductions in hours for support staff is another possibility for cutting costs, for example a secretary who would take the summer off.
Departments will be looking at budgets and evaluating where cuts can be made, such as money spent on paper for student printing, Branson said.
Its just going to be looking at everything we can, he said.
The university will have to create a balanced budget after the legislature approves its budget. Branson said he hopes to have a solid budget reduction plan by the end of March.