The Higher Education Commission has been moving swiftly in determining how a $150 million cut from state funding for higher education will be distributed among seven state universities.
Gov. Mitch Daniels announced the budget cut on Friday, and he gave university presidents 30 days to meet with representatives from the Higher Education Commission to determine how the loss of state funding would be distributed among them.
Randy Howard, vice president for Business Affairs and Treasurer of Ball State University, said he anticipates the commission will want to wrap things up as soon as possible, considering the deadline for negotiations falls during Winter Break for most institutions.
"It's going to be a painful and challenging process," he said Friday. "Whatever decisions we make will preserve the quality of education, and tuition has been set for the next school year."
Christopher Murphy, commission representative for District 2, said the group is in the very early stages of conversation with leadership from each university.
"[Allocation of funds] will be based on profitability of the university in regards to their missions," he said. "It will also be determined by the number of students and effectiveness of education verses the number of students who graduate on time."
Michael Smith, president of the Higher Education Commission, said the commission heard from representatives at Indiana University and Purdue University on Friday because it happened to be the weekend for their respective Board of Trustees meeting(s).
"The presidents of each university emphasized the importance of being thoughtful, fair and collaborative," he said. "We want to respect the fact that each has its own strategic priorities."
Smith said the commission will make recommendations on best practices and productivity for the seven state universities. He said one idea they are exploring came from the chancellor of the University of Maryland. He said cost savings could be found by procuring energy from the same contractor for all state universities. It showed purchaser power from a wholesale contract.
Howard said such things as reducing cost of university maintenance add up to a combined savings of $1 million annually at Ball State.
For example, using foam instead of liquid soap in the restrooms accounts for $15,000 in savings, and the geothermal project is expected to save the university $2.3 million annually.
Howard said the university is always looking for ways to generate additional funding, by attracting international revenue and greater enrollment, and by doing research for external companies.
Stimulus funds helped backfill money that was lost from state budget cuts earlier this year, but stimulus money will not be available to supplement the new funding cut, Howard said.
A part of the $150 million funding loss will affect Ball State's operating budget. This cut represents six percent of all state universities' operating expenses.
Last year, the university received $130 million from the state of Indiana for operating appropriations, and Howard said if Ball State were to lose six percent of its funding, the university would have to take "significant action."
Ball State's overall budget is about $300 million, Howard said. As of Friday afternoon, he said he was unable to speculate how much of a loss Ball State would have to bear.
Smith said he's proud of the process Gov. Daniels has followed.
"It's far more modest than other requests that have been made," he said. "Out of the state's $4 billion annual spending, $150 million is a much smaller reduction than other industries have seen."
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