Iowa Board of Regents approves fiscal year 2027 university budgets totaling over $9B

The Iowa Board of Regents Wednesday approved university budgets for the next fiscal year, with board members praising university leaders for their work in cutting costs and reallocating funds.

While both the University of Iowa and Iowa State University’s budgets are increasing in fiscal year 2027, by 2.5% and 3.4%, respectively, the University of Northern Iowa’s budget is decreasing by 1.7%.

Across the entire board of regents-governed system, the fiscal year 2027 budget totals close to $9.37 billion, $1.9 billion of which falls into general education university operations. After accounting for “the shift of the recurring separate appropriations that were rolled into ISU’s general education funding” for fiscal year 2027, a budget document published by the board stated the general operating budget grew by 2.5%.

State appropriations for general education and operations remained flat for fiscal year 2027.

Multiple board members expressed concerns over a lack of exposure to the budget process and relevant information this time last year, with Regent Christine Hensley and then-Regent David Barker voting against approving university budgets.

Hensley said during Wednesday’s meeting the board received “way more information this year” than they’ve received in the past and she feels “much better” about the budget process and her understanding of it.

Regent Kurt Tjaden said the budget process includes “multiple reviews” by university groups, the board of regents office, the board’s finance and investment committee and the board itself. He also commended university leadership and staff for their work in finding cost savings and reallocations of funds.

“As a reminder to the board, our universities start the budget process with a significant — over $15 million — financial gap after we finalize tuition rates,” Tjaden said. “This is not new; they have faced this challenge for the past 20-plus years due to flat or declining state and federal support … and the universities have once again done a great job of reallocating costs and reducing expenses to support strategic initiatives and fund compensation increases for faculty and staff.”

University of Iowa 

The UI expects its general education funding to increase by $22 million in fiscal year 2027, the budget document states, driven by tuition increases and “continued enrollment strength,” and flat state funding is continuing the university’s trend of needing to rely more on tuition to meet budget needs. Nearly 70% of the $22 million will go to salaries and fringe benefits, with the rest going to building repairs, utility costs and student financial aid.

Funds have been reallocated across different university departments to better support the UI’s priorities, the report stated, which include student success, research, campus infrastructure, meeting workforce needs and “fiscal stewardship.”

Some of the reallocations include $2.6 million from centralizing marketing and communications, $1.4 million saved and moved from a 6.5% teaching assistant budget reduction in the college of liberal arts and sciences and $3.8 million moved from “colleges and central units” to address cost increases from utilities, cyber insurance and other operational expenses.

UI President Barbara Wilson told board members Wednesday the university is also continuing with its Revenue and Efficiencies Strategic Plan Action and Resource Committee initiative to find efficiencies and cost saving opportunities.

“We’re not just doing this for the sake of doing it,” Wilson said. “We’re doing it because we want to increase our capacity to support students, to support faculty, to support research growth, to support our healthcare enterprise, and of course to be good stewards of what we do, and also (be) great partners with the state of Iowa, so a lot of work going on in this arena.”

The Center for Intellectual Freedom at the University of Iowa, a center housed but not governed by the UI, received $1 million in state appropriations for fiscal year 2027, which the board document states will be used to recruit and hire a permanent director, as well as their salary and benefits and those of administrative staff and “faculty support as determined by the director.”

Funds will go toward furnishings and supplies for the center’s physical space; marketing, public relations and strategic development services; creating programming and curriculum for the center’s mission and supporting guest speakers.

Athletics at the UI are also seeing a budget increase from last year, the board document stated, growing 7.5% to $182.3 million. Men’s and women’s sports both saw revenues increase and fundraising numbers increased from $17.1 million to $24.1 million, alongside gains from licensing and premium seating revenues.

Costs in men’s and women’s sports are rising alongside their revenue growth, and the athletics department is increasing scholarships and has more than $21 million budgeted for “student-athlete revenue sharing payments.” Costs of travel, events and room and board have increased as well.

Iowa State University

ISU’s general education fund state appropriations look a little different than in the past, due to the combining of line items from the Agricultural Experiment Station, Cooperative Extension and STEM workforce initiative into the general university funds. They total $229.9 million in fiscal year 2027.

Enrollment is predicted to be “stable” this fall, ISU President David Cook told the board, due in part to a nearly 90% retention rate, and tuition revenue is set to increase by 4.5% to more than $588 million.

In addition to salary increases, board documents stated student financial aid expenditures will increase by 11% to $16.7 million in fiscal year 2027. Cost increases in areas like software, digital storage, fire, bus and other services total $2.9 million.

“Affordability is always going to be top of the list when you talk to our students, and it’s really important to us as well,” Cook said. “So, our ability to be able to redirect dollars to financial aid is critical, and (I) really appreciate the board’s support of that modest tuition increase because that’s in part what’s helped us kind of get through this.”

Athletics at ISU is seeing its budget grow by 2.7% to $144.9 million, board documents stated, helped by projected increases in football and men’s basketball ticket revenues, conference revenue, multimedia rights and licensing. The department will also use more than $18.6 million in cash reserves in the fiscal year 2027 budget, a decrease of more than $8 million. Before fiscal year 2026, the university athletics department had amassed more than $60 million in cash reserves.

Regent Steve Lacy asked Cook and Senior Vice President for Operations and Finance Sean Reeder about future planning for athletics with the cash reserve, as this is the third year the department is pulling out funds. Cook said the reserve is now under $10 million and officials are working on a three- to five-year plan to tighten the budget and find new revenues.

“We’re working in close partnership with the athletics as well as with the foundation to come up with a plan that addresses that to get us through the intervening period until we have the opportunity to really drive more athletic revenue from the renewal of the next television contract, which will be in (2031),” Reeder said.

University of Northern Iowa

UNI in its proposed budget statement said the university closed a $7.7 million budget gap created by flat state funding, declining enrollment, the continuation of its neighboring states tuition program and other cost increases “through divisional personnel reductions and operational reallocations.”

Eliminating open positions made up the majority of personnel savings to balance the budget, the budget proposal said, as well as reducing staff time and transitioning roles to “to self-supporting funds.” Funding for the UNI Foundation and “auxiliary operations,” including performing arts and athletics, were also reduced.

Projected enrollment lands at 9,085, according to the budget document, a drop of 119 students from last fall. While freshmen enrollment is helping with the decrease, three- and four-year graduation rates and declining graduate and international student enrollment are limiting growth.

University of Northern Iowa President Mark Nook said during the board of regents meeting more recent projections are showing that the university may exceed the current prediction.

Non-academic university departments have also been working to find new areas of revenue, Nook said, from the housing and dining and student life departments expanding summer programming to the athletics department opening facilities for non-athletic use.

“We have asked all of these institutions to really shoot for a 10-year horizon to be able to pull back on the level of state support that they receive for non-academic purposes, so that we can put more of the university’s general fund budget right into supporting critical academic affairs and academic support services,” Nook said.

Enrollment declines and further implementation of the tuition program, which provides students from states bordering Iowa with a resident tuition rate, have led to a projected 3.1% decrease in tuition revenue, leaving the total at more than $66.5 million.

Despite salary increases, the board document stated that “strategic institutional budget reductions” made enough of a difference to decrease salary and benefit expenditures by $4.5 million, or 3.6%, in fiscal year 2027. Financial aid also increased by 1%.

While general state funding remained flat, UNI received another $1 million in state funding for its Civic Education Center, as well as new state appropriations of $1 million for its contiguous states tuition program and $600,000 to expand its nursing program.

UNI Athletics is expected to bring in $16.5 million in revenue in fiscal year 2027, driven by game guarantee revenue for football and wrestling, among other sports, ticket sales. University support for the athletics department includes $3.51 million in operational support, $1.65 million in supplemental support and $1.28 million for scholarships.