The 2001-2003 biennial budget approved by the Indiana General Assembly at the end of April contained both good news and bad news for higher education and Purdue. Operating appropriations for the campuses were below the levels that had been requested by the universities and recommended by the Higher Education Commission. Also, the legislature did not fund several new initiatives that were aimed at enhancing state economic development.
However, on the plus side, the state authorized Purdue to proceed with several capital projects that will allow us to make some significant progress. It also provided $700,000 in enrollment equity adjustment funding for Indiana University-Purdue University Fort Wayne.
The budget process was difficult for everyone involved. There was a strong support in the legislature for education. Members recognized that the public school system and the state's colleges and universities are extremely important to the economic and social future of Indiana. However, the state was hampered by sharply declining revenues and growing deficits. The revenue to invest in our future at the level needed simply wasn't there.
The appropriation for Purdue will force us to make some very tough choices in the months ahead, but our intent is to make the best of the situation and to maintain the University's commitment to the quality of all its academic programs.
While the state's operating appropriation for the West Lafayette campus will go up by $3.9 million (1.8 percent) in the first year of the biennium and by $4.2 million (1.9 percent) in the second year, these increases are offset by a 29 percent decrease in the non-recurring technology funds Purdue has received in recent years. In addition, repair and rehabilitation funding will be reduced by 25 percent.
Overall, the West Lafayette campus will lose about $1.9 million in the first year of the biennium. Funding will increase by $2.3 million in the second year. These are small portions of a university budget that exceeds $1 billion. The most significant problem we face is keeping faculty salaries competitive in a national market that puts a very high premium on the very best people, especially in the technology-based fields in which Purdue traditionally excels.
Other universities and private industry regularly approach our best faculty members with offers that include high salaries, improved facilities, and enhanced support for their research initiatives. Universities that do not have the resources to compete for these people inevitably decline in quality. Ultimately, their state's economic development suffers.
The General Assembly's capital budget will allow Purdue to start several important projects. We received bonding authority to begin work on a new engineering building, which will trigger the beginning a major facilities upgrade in that school. Bonding also was authorized for:
A $12 million chiller plant, which is needed support the Engineering project.
A new Computer Sciences Building. The state approved bonding of $13 million. The University will raise another $7 million from private donors to complete the $20 million project. When built this facility will give our Department of Computer Sciences the facilities and focus it needs to maintain leadership in this crucial discipline. Currently, the department is scattered in five different buildings.
A $3.4 million renovation of the Library Student Faculty Building at Purdue North Central.
The first step in an addition to the Mechanical Engineering Building. $700,000 was authorized to begin the $10 million project.
The legislature also approved a $5 million cash allocation for a nanotechnology research facility on the West Lafayette campus. Purdue plans to leverage this funding with private and corporate support in order to create a major center for developing the enormous economic potential of nanotechnology.
With the state budget approved, the next step for Purdue is to develop its own budget. In the weeks ahead, we will be making decisions about student fees, faculty and staff salaries, program costs, and all the other factors that are part of operating the University's statewide system.
Although funding for education in Indiana is far below what I had hoped for when we began the budget process, it is clear that our governmental leaders recognized the importance of education and gave it the highest priority possible. This makes me very optimistic for the future of our state.