New budget for Indiana University includes no money for pay increases for 2nd straight year

Indiana University board OKs plan for no pay hikes

BLOOMINGTON, Ind. — A new Indiana University budget plan that doesn’t include money toward employee pay raises for a second straight year was approved Friday by the school’s Board of Trustees.

The overall $1.7 billion budget for the university’s eight campuses around the state includes a $29 million, or 6 percent, reduction in state funding under cuts ordered by Gov. Mitch Daniels because of tax revenue shortfalls.

The budget’s planned 0.7 percent increase in operational spending will be the smallest in several decades, said Neil Theobald, IU’s vice president and chief financial officer.

Administrators set aside $17 million in expected revenue, but Theobald said he believed that reserve fund should only be used for pay increases if the state’s tax revenue improves and enrollment remains strong.

“The worst scenario would be to have a salary increase and then another budget cut,” Theobald told the trustees.

The new budget includes a $16.7 million increase in health-care spending for the university’s more than 17,000 employees, but some of that will be offset by savings from retirement plan changes.

“Basically, all of our new spending is for health care,” Theobald said.

The trustees last year approved a 4.9 percent tuition increase for in-state undergraduate students on the Bloomington and Indianapolis campuses and a 4.7 percent increase for in-state undergraduates at all regional campuses.

Theobald said university was projecting a systemwide enrollment increase of about 4,100 students — mostly at the regional campuses. He said enrollment should remain stable at the main campus in Bloomington, which received about 37,000 applications for some 7,000 spots in the fall freshman class.

The union representing the university’s support staff said the budget plan was misguided.

“Before the current economic crisis began, we were already the lowest-paid employees in the Big Ten schools and now we struggle to make ends meet with less in a time of recession,” the Communication Workers of America said in a statement. “The decision for raises is a matter of political will and choice, not simply a matter of a tight budget, since money from the state of Indiana comprises less than 20 percent of the budget.”