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State of University Speech Zeros in on Financial Way Forward

By Daniel Robison

Posted February 23, 2010

In his first State of University address since October 2008, IU President Michael McRobbie spoke of the many things that have changed in Bloomington and the country in the past 16 months. Among them: the relationship between the university and the state, especially in terms of funding.

McRobbie focused on money during most of his 45-minute speech: how much the university has, what it's doing to procure more and how administration has already dealt with nearly $60 million in cuts from the state over the next two years.

"The total of $23.3 million in cost savings that IU created this year is for recurring activities. Thus we will save an addition $23.3 million next year. These savings, combined with next year's finding reductions will help IU meet the state target: $58.1 million, the cut in our biennial spending," McRobbie said.

McRobbie says IU will rely more on private philanthropy in the wake of reduced state support and political pressure against tuition increases. Chief Financial Officer Neal Theobald says decisions on how to reduce budgets in the face of state cuts appeared to happen quickly but actually began last summer.

He says the loss of 147 employees, travel cuts and salary freezes got the job done – this time. But Theobald says budgets could see the knife again soon.

"Clearly the state economy has not bottomed out. And to the extent the state revenue continues to fall, it is very possible that Indiana University will be asked to play its part with helping the state deal with its lower revenues," Theobald said.  "I think we've been treated fairly though, I really have no complaints, given the situation they face."

As of the end of January, state revenues have come in below estimates for 15 straight months. Governor Mitch Daniels says he'll continue to cut spending in an effort to protect the state's $1.3 billion surplus.

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