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Greetings Colleagues,
I hope your fall term is off to an auspicious start and you are enjoying this lovely fall weather.
As shared at yesterday’s Budget Town Hall, Idaho State University continues to make steady progress toward long-term fiscal sustainability, even as we face new and significant financial headwinds at the state level.
Budget Progress to Date
Thanks to the hard work and commitment of our University community, we have achieved several important milestones:
- Development of ISU’s first comprehensive budget model and the Opportunity Aligned Resourcing (OAR) framework
- Effective fiscal governance through the Budget Advisory Group
- Creation of clear, meaningful, and accessible financial reports and analyses
- Development of longitudinal, multi-factor data sets for decision support
- Efficiencies gained through budget optimization initiatives
Because of these efforts, we presented a balanced central fund budget for FY2026 - one year ahead of schedule.
At the same time, we have continued to advance ISU’s strategic priorities, with notable results:
- Consecutive yearly enrollment increases; 12.3% increase in student headcount since 2022
- 10% increase in student retention rates since 2021
- Statewide program expansion aligned with workforce needs
- Completion of a 30-year Campus Master Plan to guide facilities and infrastructure investments
- 50% increase in facilities and administrative funds (F&A) distributed to colleges, researchers, and principal investigators (PIs) since 2020
- Expanded partnerships and collaborations with peers, business, and industry
- 21% increase in new donor commitments in 2025
State Holdback
In response to state revenues coming in lower than projected, the state has imposed a one-time 3% funding holdback for FY2026. For ISU, this results in a funding shortfall of $3.16 million in general education funds and $650,000 in special appropriations funds (Career Technical Education, Idaho Museum of Natural History, Idaho Dental Education Program, and Family Medicine Residency).
We will meet this holdback in general education funds through a non-permanent reduction of operating budgets and additional scrutiny of OAR personnel actions to realize additional FY2026 salary savings. On the operating side, all units are asked to limit discretionary spending this year. On the personnel side, vice presidents will work with their teams to redouble efforts in finding efficiencies through shared services, reorganization, and process improvement, and/or deferring filling vacant positions wherever possible.
While this is a setback - especially after entering the year with a balanced budget for the first time in over a decade - I am confident we can navigate this challenge together.
Looking Ahead: Strategic Budget & Finance Objectives (FY2026-FY2027)
- Maintain momentum and forward progress toward strategic plan goals and outcomes
- Strengthen structures, systems, and culture in support of budget principles and OAR
- Invest in strategic philanthropic relationships
- Maintain a strong credit rating and advance plans for the life science building bond issuance
- Engage in proactive advocacy and education with the State Board of Education and the Idaho Legislature
- Expand data sets and analytical tools to support strategic financial decisions
- Develop multi-year financial forecasts and scenario plans
- Shore up appropriated reserves
- Fully eliminate the structural deficit
FY2027 Budget Outlook
State agencies were directed to submit a “maintenance” budget for FY2027. For Idaho State University and the other colleges and universities, this means that we won’t receive additional funding offsets for increases in health insurance, CEC, and inflationary increases, creating an immediate funding gap of $4 million for FY2027. The state has also asked agencies to prepare for additional potential one-time holdbacks of 2%-6% next year ($2.1-$6.3 million for ISU general fund appropriations).
In addition to factoring in state impacts, we need to account for the debt service for the new life sciences building and the final phase-out of the eISU differential fee for online courses as we head into FY2027.
We do anticipate realizing meaningful gains in net tuition revenue to help offset some of these expenses in FY2027.
Next Steps
We will continue to work on expanding revenue growth strategies through increased net tuition revenue and developing diversified revenue streams through the Albion Institute, philanthropy, program expansion, and ISU health clinics. We will also continue our work in realizing efficiencies through OAR, system and process improvement, reorganization, and shared service models.
Over the next several weeks, we will develop revenue and expense forecasts and scenarios for FY2027 while we work on our long-term strategies and objectives. Our Budget Advisory Group will develop recommendations for FY2027 budget development that will be shared with stakeholder groups and with the University community at a town hall later in the fall.
Resources
Budget Website
Printable Budget Update
FY2026 Holdback Information
Thank you for your continued commitment to ISU and our shared goals. Please contact me at (208) 282-4277 or jennifersteele@isu.edu if you have any questions or comments.
Sincerely,
Jennifer Steele
Vice President for Finance and University Planning
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