Purdue trustees approve lean operating appropriations request

August 30, 2010

INDIANAPOLIS – Purdue University's Board of Trustees on Monday (Aug. 30) approved a scaled down 2011-13 legislative request for operating appropriations based on instructions issued by the Indiana Commission for Higher Education and the State Budget Agency.

"This request is very much a reflection of the economic realities faced by states across the country," said Al Diaz, Purdue's executive vice president for business and finance, treasurer. "This situation has forced us to generate savings and review internal processes to seek efficiencies so that when the economy rebounds, Purdue will be positioned to emerge as strong as ever."

During its meeting on the Indiana University-Purdue University Indianapolis campus, board members reviewed the request, which, following ICHE guidelines, includes no budgetary assumptions for maintenance and price increases or new initiatives over the biennium. Maintenance increases for categories that include personnel, supplies and expense, and institutional student aid will be considered by the commission at a later date when it submits its budget recommendation and sets non-binding tuition targets, Diaz said.

Based on performance incentives recommended by ICHE, Purdue is requesting a system-wide increase in operating appropriations of $20.5 million, with $12.1 million earmarked for the West Lafayette campus. Approximately $11 million of the West Lafayette total is based on the growth of sponsored research over a four-year period, said Purdue President France A. Córdova.

"In our recently completed fiscal year, research funding jumped to $438 million from $342 million the previous year," Córdova said. "State support of Purdue's research enterprise is a key contributing factor to that success and a solid investment for the state. These funds support the infrastructure that allows faculty to compete aggressively for grants and generate research that has a global impact and provides a boost to Indiana's economy."

The appropriation request also includes a $10.5 million increase for debt service over the biennium. Debt service, also known as fee replacement, represents funds replaced by the state when student fees are pledged against university debt service costs associated with certain academic facilities.

In the areas of performance-based adjustments, all state funding requests included in the biennial budget are for the 2012 fiscal year only. Those areas and requests include:

* Successfully completed credit hours. This completion incentive is based on $4,675 per additional Hoosier student. As a mature campus, the West Lafayette campus does not participate in this incentive. Funding requests include: Purdue Calumet, $1.65 million; Indiana University-Purdue University Fort Wayne, $3.67 million; and Purdue North Central, $981,750.

* Successfully completed credit hours for dual-credit students. This new incentive provides funding for credit hours earned by high school students taking applicable courses taught by a high school teacher. The requests are based on $4,675 per additional Hoosier. Requests include: West Lafayette, $116,875; Calumet, $135,575; IPFW, $243,100; and PNC, $266,475.

* Degree change. This incentive provides incremental funding by comparing average degrees during specified academic years, with changes being funded at $5,000 per resident baccalaureate. Requests include: Calumet, $315,000; IPFW, $587,500; and PNC, $337,500.

* Time to degree. This adjustment provides incremental funding for "on time degrees," with changes in resident baccalaureates conferred in four years being funded at $5,000 each. Requests include: West Lafayette, $388,937; Calumet, $15,240; and IPFW, $21,397.

* Low-income degree completion. This adjustment provides incremental funding for changes in baccalaureate degrees awarded to Pell Grant recipients by comparing average degrees for specified academic years. Changes are funded at $5,000 per degree. Requests include: West Lafayette, $452,500; Calumet, $160,000; IPFW, $80,000; and PNC, $55,000.

The total budget for Purdue's four campuses and 10 College of Technology Statewide locations for 2010-11 is $2.2 billion. State general operating appropriations total $318 million, or 14.7 percent of the total Purdue budget. Student fees account for $675 million, or 31.2 percent. Other funds come from federal grants, gifts from alumni and corporations, student aid, auxiliary enterprises, indirect cost reimbursement payments on sponsored research, and earnings on the university's endowment.

Purdue's appropriation request will be submitted to the Indiana Commission for Higher Education, which will then forward the request to the General Assembly for consideration during its legislative session.

Writer:  Brian Zink, 765-494-2080, bzink@purdue.edu 

Sources:   Al Diaz, 765-494-9705, aldiaz@purdue.edu

                   France A. Córdova, president@purdue.edu

Related information:
President France A. Córdova's comments to the Board of Trustees