updated: 4/13/2012 12:17:40 PM

Purdue Trustees Approve Budget Plan

InsideINdianaBusiness.com Report

Purdue University's Board of Trustees has approved a system-wide $1.2 billion conceptual budget for fiscal 2013. The spending plan includes merit pay increases of up to 2 percent and a 3.5 percent tuition hike at the West Lafayette campus that was approved last year.

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April 13, 2012

News Release

Hammond, Ind. -- Purdue University's Board of Trustees, meeting Friday (April 13) on the Purdue Calumet campus, approved a conceptual general fund operating budget that keeps operating appropriations flat while providing funds for merit pay increases, student support initiatives, and unavoidable benefit and facility operational costs.

The fiscal year 2013 general fund budget is anticipated to be about $1.2 billion system-wide.

The general fund budget relies primarily on state appropriations and student fees. Operating appropriations for Purdue's West Lafayette campus decreased 10.8 percent from fiscal year 2009 to fiscal year 2013. Student fees system-wide, which make up the largest share of the general fund budget at 63 percent, have helped offset the drop in state funding and higher costs for staff benefits, fuel and utilities, and repairs to facilities.

"It's been a challenge for Purdue and other higher education institutions to improve academic quality in the face of declining resources," Purdue President France A. Córdova said. "We have targeted the most strategic and impactful uses for funds and continue to seek out additional savings and improved operating efficiencies. These have been our guiding principles to ensure that Purdue continues to provide a high-quality education for students and returns benefits to Hoosiers through our research and engagement efforts."

The budget plan calls for merit pay increases that will average 1.5 percent to 2 percent and directs each campus to make internal budget reductions to cover the university's share of increased health-care benefits and other priority initiatives.

"The quality of Purdue is tied to the quality of our people, and it was a critical part of our budgetary process to make sure we could provide a well-deserved raise to our employees," Córdova said. "Unfortunately, these financially difficult times mean those raises will be modest."
In approving Purdue's general fund budget, which supports educational and base operating expenditures, trustees acknowledged the increases created by mandatory spending for benefits, utilities, insurance, and facility repair and renovation, which total more than $19 million system-wide. The budget plan also provides continued investment in student access, success and affordability, along with improved retention and graduation rates.

The trustees endorsed the following spending plans for fiscal year 2013:

* At the West Lafayette campus: $990.9 million.

* At Purdue Calumet: $86.3 million.

* At Indiana University-Purdue University Fort Wayne: $112.4 million.

* At Purdue North Central: $30 million.

Last May the board set tuition and fee rates that represented a base increase of 3.5 percent for resident and nonresident students, which fell within guidelines issued by the Indiana Commission for Higher Education. At the same time, the board established a fee structure for the West Lafayette campus that also included the second increase of $91 for the student fitness and wellness fee and a $1,000 increase in tuition for undergraduate international students who are new to campus this summer.

Purdue's West Lafayette undergraduate resident fees for fall 2011 rank ninth among Big Ten public institutions, and nonresident tuition and fees rank sixth.

Purdue regional campuses and the Statewide Technology program will continue the 2.5 percent general increase.

Students at the regional campuses are charged fees on a per-credit-hour basis. Based on 15 credit hours per semester, the annual cost beginning fall 2012 for resident undergraduate students would be:

* At Purdue Calumet: Tuition and fees, $6,959.

* At Indiana University-Purdue University Fort Wayne: Tuition and fees, $7,640.

* At Purdue North Central: Tuition and fees, $7,044.

In other business, the trustees also voted to change the endowment investment policy to clarify that an investment with a single manager cannot be more than 10 percent of the portfolio, which has already been routine procedure.

On Thursday (April 12), the trustees' finance committee heard a report on the endowment growth and distribution for the fiscal year ending last June 30. Highlights were:

* The Purdue endowment had a market value of $2.002 billion, ranking 32nd among all universities in the country and 10th largest for a public university. The endowment market value ranked fourth in both the Big Ten and in Purdue's aspirational peer group.

* The total reflected a return on investments of 23.7 percent, 3.6 percent above the mean for endowments of more than $1 billion. For the second year, the endowment achieved an annual return that is in the top quartile in the Study of Endowments conducted by the National Association of College and University Business Officers.

"Compared to the other billion dollar endowments, Purdue's outperformance for the fiscal year was primarily driven by asset allocation," said James Almond, senior vice president for business services and assistant treasurer.

Purdue is distributing 5 percent of the endowment - $90.4 million - this fiscal year, up from 4.5 percent from the previous year. Those funds are used for instruction and research, scholarships, fellowships, construction, and loans and student awards. Most of the endowment - 86 percent - is restricted in usage by donors.

Source: Purdue University

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