While many things
remain uncertain, I want to share our current thinking on IUP’s budget
following the Board of Governors’ approval in July of a tuition and technology
fee increase of 3.5 percent for the 2015–16 academic year.
With that information,
we are working with a budget scenario that assumes level appropriations and enrollment
near our planning projection.
After taking into
account already-implemented adjustments to expense projections (prong 1 of our long-term plan) and already-planned use of one-time personnel
savings, this scenario projects a $7.1-million budget shortfall for the 2015–16
fiscal year. Without the tuition increase, we would face a projected $9.6-million
shortfall. Of course, the remaining unknowns (including the commonwealth
budget, performance funding, and costs related to unresolved union agreements) may
result in a somewhat larger or smaller shortfall. We plan to cover the projected
shortfall with the use of one-time reserve funds.
Thanks to the great work of many
people, IUP is in a relatively strong position. While we will require a significant
drawdown of our reserves, we will not be facing a reduction in work force or
any significant reduction of academic programming in 2015–16.
That said, we need to take care
with cash flow, at least until the commonwealth has a budget. We have no issues
today, but we all need to exercise extra caution and strong financial
discipline. If you can defer an expense, please do so.
There is no question that we are
doing the right things in challenging times. Balancing our budget by drawing
down reserves buys us another year, but we will not be able to do that again a
year from now. I do not mean to be overly dramatic, but we are at a crossroads.
We have a shared vision, an
excellent strategic plan, and we are working together toward common goals. I am
confident that IUP has the talent and creativity, the knowledge, and the commitment
to turn the challenges we are facing into opportunities for future success.
Thanks to your good work, early
indicators are that first- to second-year retention of students has increased,
as have four- and six-year graduation rates. This shows that we are recruiting
the right kind of student and that we are doing what we need to do to help them
be successful. It also reflects the fact that we have not—and will not—compromise
our admissions standards, measured by the high school GPA and SAT scores of our
new students each year.
That’s very good news, and I
thank you for your continued commitment to IUP.
Now we must accelerate progress
on the good work that we are doing together.
The investments we have made to recruit
students and support their success are working. That work needs to continue and
to grow. We have streamlined the procedure for updating existing programs and establishing
new ones, and we have several in progress. Let’s make these new and improved programs
happen—sooner rather than later. We are strategically deploying technology to
enhance learning and to help streamline administrative processes. Help us find additional
ways to be more effective with our time.
As I reflect on my time with you
over the last three years, I know that you—talented and dedicated people—are
our greatest strength. I am more certain than ever that together we can make
the tough, responsible decisions that will shape IUP’s destiny and determine
its future. If we stay the course and press forward in making positive change,
I know that IUP will be the model of a successful 21st-century university.
I will keep you informed as more
information about the budget becomes known.
Thank you for your continued good
work. Enjoy the rest of the summer.