Purdue trustees hear report on budget, OK health-care plan

September 30, 2011

WEST LAFAYETTE, Ind. – Purdue trustees on Thursday (Sept. 29) heard a report on the university's system-wide budget for fiscal year 2011-2012, and on Friday (Sept. 30) the board approved the employee health-care plan for calendar year 2012.

The general fund, which finances the university's academic mission, totals $1.16 billion system-wide, an increase of $35.7 million or 3.2 percent. Of that, $933.8 million is budgeted at West Lafayette.

The university will receive more than $5.7 million less in recurring state operating funds from the previous year, with the West Lafayette campus seeing a $7.3 million cut while the regional campuses' shares increased. Purdue West Lafayette's tuition and fees dropped one place to rank ninth in the Big Ten and are expected to bring in $709.5 million. System-wide student fees are budgeted at 61 percent of the total general fund, while state operating appropriations cover 27 percent.

"This budget keeps us on target to accomplish our strategic plan and provide our students with a world-class education while keeping the tuition increase within the 3.5 percent guideline recommend by the Indiana Commission on Higher Education," said Purdue President France A. Córdova. "To do this, we found ways to save money through our Sustaining New Synergies budget-constraining efforts and also funds from every unit. As we move forward, we will look for ways to increase revenue beyond the traditional sources of tuition and state appropriations."

Internal budget reallocations and reductions funded more than 40 percent of the 2012 fiscal year expenditure allocations on the West Lafayette campus.

One of the highest priority strategic goals - competitive faculty and staff salaries - was supported with merit raises in July, using a 1.5 percent merit pool, said Al Diaz, executive vice president for business and finance, treasurer. Units also had the option to pay more for exceptional merit or market conditions, using up to 0.5 percent from their own funding sources.

Budgeted student financial aid for fiscal year 2012 increased by 6.6 percent at West Lafayette and 4.7 percent system-wide, supported by federal, state, private and institutional scholarships and grants. Together with loans and student employment opportunities, student financial aid is estimated at $571.4 million at West Lafayette and $797.1 million system-wide.

Besides the general fund, the full operating budget includes sponsored programs, gifts and revenue from residence halls, athletics, other auxiliary enterprises and university-funded financial aid. The total Purdue budget is $2.23 billion system-wide, a 2.7 percent increase over this fiscal year. At West Lafayette, the total budget is $1.86 billion

The health-care package continues to provide a range of choices and adds a tiered lab network, paying 100 percent for work done at specified labs, and a $250 tobacco user surcharge for 2012 and $500 for 2013. The surcharge will be waived for those who certify that they have not been a tobacco user for the past 12 months or who complete an approved tobacco cessation program.

The 2012 medical plan budget is $151 million. The university contribution will increase by 6 percent to $10,580 per employee for 2012. Employees' costs will increase:

* 10 percent for the choice plan premium.

* 15 percent for the incentive plan premium and an increase in co-insurance.

* 30 percent for the co-pay plan premium and increases in out-of-pocket maximums and co-insurance.

Purdue projects a 9 percent increase in medical claims next year. This year Purdue expects to pay $120 million while participants pay $19.4 million, an 87/13 split. Next year Purdue will pay 84 percent and employees will pay 16 percent.

Medco will provide prescription coverage for all plans, and Purdue will switch to PayFlex for its flexible spending account vendor.

An onsite integrated health center incorporating basic primary care, urgent care, a pharmacy, chronic condition management, and health and wellness promotion is being evaluated.

"The goal of this center would be to provide convenient, low-cost, quality health care to employees and their dependents and to encourage a culture of health and wellness," said Luis Lewin, vice president for human resources.

The center was among recommendations by the Blue Ribbon Healthcare Committee of faculty and staff experts formed last year to study health-care delivery at Purdue. 

Writer: Jeanne V. Norberg, 765-494-2084, jnorberg@purdue.edu

Sources:   France A. Córdova, president@purdue.edu

                   James Almond, 765-494-9706, jsalmond@purdue.edu

                   Luis Lewin, 765-494-7395, luislewin@purdue.edu