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Purdue News

STATEHOUSE UPDATE VOL. 4, NO. 4 FEBRUARY 17, 1997

The House Ways and Means Committee is in the final stretch of hammering out its budget for the coming biennium. A committee vote on the budget measure, House Bill 1001, is expected by the end of the month.

We remain hopeful that the recommendations made by the Commission for Higher Education will be included in the overall package (see the February 3 issue of Statehouse Update for details), which will then serve as the blueprint for further budget debate.

Higher Education Funding Questions

In our work with legislators, we regularly get asked a number of questions regarding higher education funding. As the budget process heats up, we thought it would be illuminating to share with you a summary of some of those questions, with our responses and related graphs and tables.

How have college and university appropriations compared with local school appropriations over the last ten years?

As you can see above, local school operating appropriations have more than doubled while higher education's figures increased by less than half that rate.

How have appropriation increases compared with the costs faced by colleges and universities?

The cost of purchases by colleges and universities is measured by the higher education price index, or HEPI. Above, HEPI is compared with the consumer price index (CPI). As you can see, the HEPI increased by nearly 50 percent over the past decade, while the CPI rose by more than 40 percent. In comparison, state appropriations increased by only 30 percent.

So what's been the impact on colleges and universities?

We see three major impacts when state appropriations fall behind cost increases. First, operating units are asked to reduce their costs. How? The primary options available to us are to cut the number of faculty and staff, and to reduce supplies and expenses, areas in which Purdue has certainly shouldered its share in recent years. On the West Lafayette campus alone, 302 positions have been cut and supply-and-expense budgets have been reduced for four of the past six years.

• Second, faculty and staff receive, on average, less than an inflationary adjustment in salary, a factor that adds to the pressure of attracting and keeping quality faculty and staff.

• Third, and most troubling, is that students are asked to make up some of the difference with fee increases higher than the rate of inflation.

  Such increases in recent years have resulted in fees becoming an ever-increasing portion of each public institution's budget. Again citing the West Lafayette campus alone, the graph below shows that state appropriations have declined from almost 80 percent of the total revenue behind each Hoosier student in 1986-87 to about 65 percent this fiscal year.

Do student fees go up faster when state appropriations decline?

In a word, yes. Student fee increases can be shown to be lower when state appropriations are higher. As you can see in the following graph, state appropriations at West Lafayette have been relatively flat since 1990-91. The rate of increase in fees is directly related to the slowdown in state funding.

Keep in mind that Purdue trustees are committed to a fee increase of no more than 4 percent annually in the 1997-98 budget, if our operating appropriation request is funded. Purdue will keep fee increases as close to 4 percent as possible, even at the Commission for Higher Education's somewhat lower recommended levels. At the Budget Committee level of funding, fees will undoubtedly have to increase by more than 4 percent.

The Line on Line Items

Purdue has several line items that are funded outside the University's overall operating budget. We are requesting significant increases in three of these -- Statewide Technology, the Technical Assistance Program (TAP) and the County Extension Education budget -- all of which provide key education and economic-development initiatives to a broad range of people throughout Indiana.

• The Statewide Technology request would expand program offerings in South Bend/Elkhart, Anderson, Richmond and Versailles, giving residents convenient, career-boosting Purdue technology training where they live and work.

• The TAP request would enhance this important outreach service to Hoosier manufacturers and businesses by adding staff at regional sites around Indiana to make TAP truly statewide in scope.

• The Extension Education request would remove the pressure on local property taxes to fund declining federal support for county Extension staff now funded with federal funds. The federal funds would, in turn, be used to expand research and educational programs in high-priority areas such as value-added food and biotechnology, and environmental concerns.

We continue to expect strong support for the Commission for Higher Education's capital budget recommendation, which is encouraging.

As mentioned in our last edition, the recommendation would allow us to complete all buildings partially funded two years ago -- the Food Science/Biotechnology Building at West Lafayette, the Science Building at Fort Wayne and the Classroom/Office Building at Calumet. In addition, it would fund renovation of Calumet's Anderson Building and partial funding for upgrades at West Lafayette's Wade Utility Plant.

Looming Budget Battles

As HB 1001 takes shape, the biennial budget-writing process will move into high gear. We'll have a progress report in our next edition. In the meantime, you are welcome to contact our West Lafayette or Indianapolis offices with specific questions or concerns about 1997 legislative action and its effect on Purdue.

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