Budget Plan 2010

Message from the President: March 19, 2010

This afternoon, the Board of Trustees approved measures that finalize our budget reduction planning process. The measures included changes in student and administrative fees, employee insurance and heath care benefits, future university contributions to some pension plans for new employees, and an amended agreement between Ball State and AFSCME, Local 293.

A significant portion of the $15.2 million cuts will be achieved through changes to our benefits. We adjusted our health care plan to incentivize use of a large but established network of hospitals that, through negotiated rates, offer more favorable health care costs. We raised our deductibles and maximum out-of-pocket expenses so that our plans were better aligned with similar plans in the marketplace. The percentage of health care premiums paid by the university was adjusted: in the case of the low deductible plan, the percentage went down; in the case of the high deductible and Health Savings Plan, it went up. We also slightly increased plan members’ share of the cost at purchase and the maximum out-of-pocket expenses for prescription drugs. Finally, we restructured health care benefits for employees who retire after July 1, 2012, so that those who retire before age 62 share more of the extra cost associated with retiring earlier than others.

We also took this opportunity to make the very positive change of adding a new tier of employee plus child(ren). This new tier, with a price point below a family plan, will benefit our single parent employees with dependents. In many cases, individuals in this demographic will be able to take advantage of a plan that costs less than their current family plan.

These careful adjustments and negotiations with our providers, combined with changes that were distributed across many of our plans, enabled us to balance modest cuts to benefits with a modest pay increase. We are targeting a 2% increase in our salary pool in addition to a $400 across-the-board salary increase in most areas. The $400 across-the-board increase is intended to partially defray the expense of rising health care and other benefits over two years and will represent a higher percentage increase for employees with lower salaries.

We also adjusted our Alternative Pension Plan for new employees hired after September 30, 2010. In the new plan, the university contribution will be 5% in the first three years and rise to 10.5% thereafter. We have made no changes in contributions to retirement plans for current employees or retirees.

This was a delicate balance of changes to benefits and salaries, but we and the Board of Trustees believe it is the most appropriate balance to strike. All told, these changes represent $7.8 million toward our budget reduction goal. Expect extensive and detailed communication about the new plans soon. Meanwhile, review the slides from the presentation for more information.

The balance of the $15.2 million cut will come from a combination of actions across a number of areas. We will increase revenue through a new graduation application fee and an increase to the graduate credit hour fee and undergraduate application fees, as well as recovering administrative costs from housing and dining. Efficiencies will also be gained through print management, energy conservation, earlier-than-expected savings from our wellness program, increased summer campus usage, more efficient use of campus technology, academic initiatives, reductions to the athletics budget, and a continued hiring slowdown. These measures will all provide significant savings. In addition, we will continue to seek other efficiencies and consolidation across the university.

Together, we faced the challenge and have emerged a stronger university, one that will continue to strike a delicate balance between preserving the distinctiveness of a Ball State education while keeping it affordable for Hoosier families.

With the closure of the planning process, we are an even leaner university. This process, however, will not hinder our ability to bring our strategic plan to fruition. Initiatives such as emerging media, immersive learning, sustainability, and being a leader of alternative energy through our geothermal initiative will continue to advance and grow.

When Vice President of Business Affairs Randy Howard completed his thoughtful presentation, there was applause. That spirit has been affirmed through several e-mails I received following the forum. I know I can speak for the entire Cabinet when I say that the level and thoughtfulness of the campus’ participation in this process was deeply appreciated.

We closed the trustees’ meeting with a presentation from Associate Vice President for Emerging Media Initiatives Dave Ferguson on "The New Media Revolution: Ball State's National Impact." I think this was a fitting reminder to all of us of how important it is to continue to pursue the goals of our strategic plan.

Once again, I thank each of you for playing such an important part in addressing our budget issues, and more importantly, ensuring to keep our university headed in the right direction.

Sincerely, 

Jo Ann M. Gora, President