By Sue Loughlin, The Tribune-Star

TERRE HAUTE - Revenue shortfalls at the state level already are affecting Indiana State University employees, who have been told they will not receive a pay raise next year.

On Friday, Gov. Mitch Daniels announced another round of budget cuts in response to state tax collections falling significantly below projections.

The state's public colleges and universities took the hardest hit. Daniels announced that general fund support of the state's public colleges and universities will be reduced by $150 million over the next 18 months.

The governor has charged the Indiana Commission for Higher Education to work with each institution to determine its share of the cuts. That will occur over the next 30 days.

Later Friday, ISU President Dan Bradley sent an electronic letter to the ISU community, notifying them that "in light of this announcement, I regret that we will be unable to provide a standard pay adjustment as originally planned effective Jan. 1 ... This is without a doubt, a great disappointment to me and to all of you. Compensation remains a top priority."

The goal was to give 3 percent pay increases, if state finances allowed.

Bradley also wrote that "the state's financial situation has worsened, and our university is now facing new budgetary challenges."

ISU already took a hit in the 2009-11 biennial budget, with its state funding reduced by $5.4 million. University-wide cuts in programs and services were implemented to meet unavoidable cost increases and strategic priorities; many vacant jobs went unfilled.

On Friday, Bradley couldn't say how ISU will be affected by the latest round of cuts until specific targets are established for each college and university. "If there are easy cuts, they've already been made. It's going to be tough," he said in a telephone interview with the Tribune-Star.

The university community will "have a voice of some sort" in identifying areas that potentially could be cut as well as areas that should not be cut, he said.

"We're going to look at things from the big picture first, seeing where we can get significant dollars without interfering with the short-term operation of campus," he said.

In the long term, it will mean "we don't have as many employees," he said. "It's my hope, and I think it's possible, we can avoid involuntary separation."

More vacant positions will go unfilled, and in some cases, the university will offer severance packages to obtain some flexibility in the budget, he said.

While the final amount of the university's budget reduction over the next 18 months will not be clear for a few weeks, it is likely to be greater than the cuts enacted in July for the 2009-11 biennium, he wrote to the ISU community.

Bradley said it's difficult to make cuts this time of year because employees are under contract and class schedules are already in place for next semester.

Steve Lamb, ISU Faculty Senate chairman, said he knows the president "is extremely disappointed" in not being able to give employees pay increases.

ISU cannot attract and keep good employees without competitive salaries, Lamb said. Support staff are particularly hard-hit by not having a pay increase, he said.

Jeff Pittman, chancellor of the Ivy Tech Community College Wabash Valley Region, said it's too early to tell what the impact might be at the Terre Haute campus.

Statewide, Ivy Tech has worked diligently the last two to three years to find more efficiencies and to keep tuition down, he said.

For example, statewide contracts for services and equipment - as opposed to individual contracts for each region - have saved the college millions of dollars, he said.

"We've been doing what we can. Obviously, the economy is really struggling," Pittman said.

In response to the governor's announcement, Teresa Lubbers, Indiana's Higher Education Commissioner, released the following statement, in part:

"From crisis comes change, and this is a unique opportunity for Indiana to meet the needs of higher education in more efficient ways. To that end, the Commission for Higher Education will work with university leadership to focus on building a more streamlined and highly effective system of higher education.

"While many of these changes are being driven by current fiscal realities, our challenge is to achieve permanent cost savings, not simply short-term relief."

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