IU Board of Trustees approves raises for most faculty and staff in 2016-17 budget

July 5, 2016

Starting July 1, many IU faculty and staff saw a bit more in their paychecks. That’s because raises were approved in June when the IU Board of Trustees took a final vote on this fiscal year’s operating budget.

A total of 15,438 university employees, or 86 percent, received a boost in pay. For appointed staff and 12-month faculty who received raises, the change went into effect July 1. In August, 10-month faculty with salary increases will see the increase in their paycheck.

Operating budget

IU's 2016-17 total operating budget by fund group | GRAPHIC BY HEATHER FARMER, IU COMMUNICATIONS

When the trustees approved the budget they also OK’d an increase to the cost of employee benefits. The benefit premiums will not increase until Jan. 1, and the rates will not be determined until open enrollment begins in the fall.

To understand how the salary increase works, Inside IU talked to Joan Hagen, acting vice president and chief financial officer, who provided more details.

What were the guidelines for the salary increases?

Support and service staff covered by a union generally received a base increase of 2 percent.

Continuing faculty and staff generally received a 1 percent base increase. However, some had the the opportunity to receive an additional amount. That could range from .5 percent to 1.5 percent and is based on merit and notable performance as well as job duty changes and equity.

Who determines how the raises are allocated?

“For staff salary setting, the units work closely with the dean, vice provost and vice chancellors before submitting their request to the campus,” Hagen said.

To make final recommendations for raises, they considered high-performing staff, equity and employees with market equivalent deficiencies. 

 “For academic salary setting, the schools review a variety of factors including merit, workload and promotions,” Hagen said.

When considering how to allocate pay increases, the parties analyzed several factors including multiyear commitments, equity, promotions and course loads.

The total cost for the raises for all of Indiana University was $24.2 million. Compensation for only Bloomington’s faculty and staff totaled $9.6 million.

More about the budget

In June, IU’s Board of Trustees approved an operating budget with a total of $3.4 billion in expenditures for the 2016-17 fiscal year. The overall operating budget for the university covers expenses for all of IU’s campuses across the state.

The operating budget is broken down into five categories, and the largest piece of the pie is the general fund, which is 59 percent of the entire $3.4 billion operating budget.

General fund budget

IU's 2016-17 general fund budget. Chart percentages represent percents of the total. | GRAPHIC BY HEATHER FARMER, IU COMMUNICATIONS

In addition to the general fund, $474 million is budgeted for research and other grants and contracts, and these funds are restricted because their use is determined by the granting agency. 

Designated and other restricted funds comprise $480 million of the total budget.  “Designated” funds have particular purposes and include medical practice funds, activities that are supported with student activity fees and unrestricted financial aid.

A total of $428 million is budgeted for auxiliary enterprises or activities that are self-supported such as parking, intercollegiate athletics and student housing.

A closer look at the general fund

The general fund totals $2 billion for the university. In addition to employee salaries and benefits, IU’s general fund budget covers energy and utility costs as well as travel expenses and financial aid that will be used to help students. Transfer funds are also included in the general fund budget and may be allocated to other expenditure groups.

Academic or faculty salaries make up 27.5 percent of the general fund and totals $555 million while staff salaries are $352 million or about 17.4 percent of the general fund. Employee benefits are slated to cost $342 million, which is almost 17 percent of the 2017 general fund.

The main revenue to support the general fund comes from tuition and state appropriations.

For more information go to the university’s budget office website

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