Indiana public universities face $103M state funding cut

INDIANAPOLIS (AP) — Indiana’s public universities would see a $103 million cut in state funding under a plan from Gov. Eric Holcomb’s administration reacting to significant drops in tax collections during the coronavirus outbreak.

A memo from State Budget Director Zac Jackson this week proposed a 7% reduction in the state’s $1.7 billion in 2020-21 funding to the seven public college systems in Indiana.

The memo said the federal coronavirus relief package approved by Congress allocated nearly $82 million to Indiana’s colleges that can defray expenses such as lost revenue and technology costs associated with distance education.

A table included with the memo shows that the cut would result in a slight overall decrease for schools from this year, rather than a 1.4% increase as approved by the Legislature in 2019 in the two-year state budget.

Purdue University would see the largest reduction of $3.2 million, followed by Indiana University at about $500,000. Ivy Tech Community College, meanwhile, would receive a $2.6 million boost, according to the memo first reported by The (Fort Wayne) Journal Gazette. The plan will be reviewed next week by the State Budget Committee.

University funding makes up about 10% of the state budget, and the Indiana Commission for Higher Education said the planned cuts were expected.

“These cuts will require institutions to significantly adjust operations and services, and Indiana’s institutions have been developing contingency plans over the past several months in an effort to prepare for a variety of scenarios,” a commission statement said. “At the same time, these cuts will not impact student financial aid, which is important to ensure college affordability for all Hoosiers in a time when there will most likely be increased financial need for students and families.”

Indiana government agencies were told last month to cut spending by 15% for the coming budget year that starts in July. Officials have said the state could see a drop of more than $3 billion in tax revenue over the next 14 months of its current two-year $34 billion budget — more than the $2.3 billion in cash reserves the state has built up over several years.

State tax collections came in $230 million, or 20%, below expectations for May, the third straight month of significant shortfalls.