PUBLICATIONS Inside Illinois Vol. 21, No. 21, June 6, 2002

FY03 budget approved by Illinois General Assembly

By Sharita Forrest, Assistant Editor
(217) 244-1072; slforres@illinois.edu

The state budget approved by the Illinois General Assembly June 2 and forwarded to Gov. George Ryan for approval supported several key initiatives at the UI’s Urbana-Champaign campus. However, even if the governor does not use his amendatory powers to reduce the university’s budget further, the university will still be faced with considerable financial challenges during the coming fiscal year.

Before adjourning, the General Assembly approved an FY03 state budget that included a $780 million budget for the UI, in keeping with Ryan’s recommendations.

However, state legislators appropriated $25 million less for the university’s operating costs than they had in the initial budget for the current fiscal year.

In a statement issued June 3, UI President James J. Stukel estimated that as a result of reduced operating costs approximately 600 positions across the university would have to be eliminated, mostly through attrition, but also through layoffs.

"The magnitude of the cuts requires that we reach into our most valuable asset – our people – to help cover the loss," Stukel said. "All of us who care about this university are deeply concerned about long-range effects and jeopardizing our competitive edge."

In addition to the reduced operating budget for FY03, university administrators also will have to reallocate $25 million to cover health insurance costs as well as find another $25 million for unavoidable expenses such as energy, union-contract wage increases and liability insurance.

"The $65-million impact on our day-to-day budget calls for creative and dedicated leaders to help this great university maneuver its way forward for the next year – and beyond," Stukel said.

The outlook for the university’s capital budget was brighter, however. The Illinois General Assembly reappropriated funds for three key projects at the Urbana-Champaign campus from last year: $67.5 million for the Post-Genomic Institute; $27 million for the National Center for Supercomputing Applications, and $8 million for the technology incubator in the South Research Park.

The capital budget passed by the General Assembly also included a $10.7 million appropriation for renovations and repairs to facilities at all three UI campuses as well as $18 million for expansion of the Microelectronics Lab at Urbana-Champaign; $15 million for a classroom/office building at Springfield; $25 million for the College of Medicine at Chicago; and $57.6 million for the Chemical Sciences Building in Chicago.

The state funds for the university’s capital budget are derived from long-term sources such as the sale of general revenue bonds. However, the university’s day-to-day operating costs are funded through income tax and sales tax revenue, the state lottery and other sources.

To help contend with the anticipated financial shortfalls, the UI Board of Trustees will be considering additional tuition increases at each of the three campuses during the coming school year. The additional tuition increase would supplement the increases the board already has endorsed: 3 percent at Chicago, 4 percent at Springfield and 5 percent at Urbana-Champaign. The additional increases would raise tuition by 10 percent at each of the three campuses and generate net revenue of approximately $17 million.

Twenty-five cents of each new tuition dollar would be directed toward student financial aid to bridge the gap for students least able to afford the increases.
The University of Illinois enrolls more than 66,000 students, and the state’s budgetary problems have an unavoidable impact on its educational mission. If the tuition increases are not approved, administrators will have to make additional personnel cuts, Stukel said.

"It is a clear-cut cause and effect," Stukel said. "Fewer faculty in the classroom means fewer sections, means fewer options for our students and other troublesome results. At our core, we are educators, and it is this mission we will work hardest to protect."

Stukel said university administrators have spent much of the past six months on budget issues for the current and the coming fiscal years. Stukel thanked Gov. George Ryan and Reps. Rick Winkel of Champaign, Tom Berns of Urbana, Bill Black of Danville and retiring Sen. Stan Weaver of Urbana for their support during the budget session and during negotiations in the final hours.

"This session has been quite a challenge, and we’re grateful to have emerged where we have; we know the outcome could have been far worse. For those who stayed with us, we extend our deepest gratitude," Stukel said.