PUBLICATIONS Inside Illinois Vol. 28, No. 13, Feb. 5, 2009

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Town Hall meetings held to discuss budget concerns

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

Students and faculty and staff members packed Foellinger Hall on the evening of Jan. 22 to give campus officials feedback and suggest possible strategies for dealing with the state’s economic problems and their adverse impact on the university’s budget. Chancellor Richard Herman and Provost Linda Katehi led the town hall meeting with the support of several panelists.

A state budgetary deficit of at least $2.1 billion for FY2009, a $4 billion-$5 billion backlog of unpaid bills, and a recurring general revenue shortfall of 7-8 percent that is projected for the state of Illinois next fiscal year have officials at the UI and other state universities scrutinizing every expenditure to determine where they can economize if the state rescinds funding this year – and slashes their budgets by an equivalent amount or more next fiscal year.

University officials, who discussed the situation with the board of trustees at its Jan. 15 meeting at UIC, have been working for the past several months developing contingency plans for a significant rescission and a possible budgetary reduction of at least 10 percent – or $74.3 million – this fiscal year. All units were asked to set aside at least 1.5 percent of their budgets, although units supported by general revenue funds that don’t impact student learning may have to contribute more.

Additionally, university officials have begun reducing purchases, travel and other expenses, and have implemented stringent hiring procedures that will leave some positions unfilled as they are vacated through attrition. Initiating searches for academic personnel requires multiple levels of review and approval, including that of the provost and the chancellor.

“We will do our best to avoid significant budget-driven layoffs,” White wrote in a Jan. 21 e-mail that preceded the town hall meetings at the three campuses. “However, in light of the financial circumstances some units of the university may face, I cannot provide complete assurance, especially if the rescission is large. With regard to FY10 that begins July 1, 2009, there is substantial uncertainty about what our situation will be.  If the recession deepens, if state revenues decline more, and if there is not help for the states and higher education from the Obama administration, FY10 could be a very difficult year.  Should this be the case, there will be great pressure on all our costs at the university, of which 75 percent are faculty and staff.” Voluntary and mandatory furlough days may be possibilities, White added.

At the Urbana campus town hall meeting in Foellinger Auditorium, Herman said that while the state has not provided any definite information about budgetary cuts or rescissions, the Illinois Board of Higher Education asked that institutions set aside a reserve of 2.5 percent ($18.6 million) of their funding.

Union representatives and employees were especially concerned about the potential impact on workers.

 “If we have to take drastic measures such as layoffs or furloughs, please set a positive example and forgo your bonuses and your raises,” said Jenny Barrett, chair of the Association of Academic Professionals. “It won’t solve the total crisis, but it would save some jobs and it would be a good gesture, good for morale. Some people are single parents and can’t afford unpaid furloughs. If (furloughs) are mandatory, make (them) for people who earn $100,000 or more, or even $70,000 or more.”

Herman said that campus officials have discussed many possible measures, including freezing wages and bonuses.  “Everything goes on the table, and it only comes off the table for good reasons,” Herman said.

Katehi said: “You need to understand that this institution does care about people. Whatever we do, we’ll put people first, of course, including everyone in our community.”

Staff Human Resources is exploring the possibility of retraining and redeploying workers, Katehi said. “It is critical for our people to be able to move from one program to another.”

However, Dorinda Miller, president of AFL/CIO Local 3700, which represents 1,525 clerical workers, objected to the possibility of creating more shared service centers around campus because it would adversely impact workers on the bottom tier. The shared service center model “was difficult to implement but has worked quite well in the Foreign Languages Building,” Herman said.

“The support that is needed to our university has changed over time and there are more responsibilities assigned to different individuals,” Katehi said. “We said that we would work to protect our own people, but at the same time, I think it is our responsibility to always be mindful of the cost that this institution presents to our students. Our task, which is difficult, is to reduce these costs so that we don’t have to keep increasing tuition to levels that students can’t afford.”

Katehi said that “creating new revenue is the first priority and is being very actively discussed by the college deans.”

When some speakers suggested reallocating endowment or other funds, Herman explained that among the university’s many sources of revenue – which include state appropriations, tuition, gifts and endowments, research grants and contracts, and income from auxiliary enterprises – only appropriations and tuition are discretionary. Other funds are restricted to specific purposes by contract and are not interchangeable.

Speakers also suggested curbing wasteful spending, using free software and implementing a universal e-mail calendar and enterprise system software.

Congress is considering an $819 billion economic stimulus package that includes funding for higher education “and there is enormous opportunity before us,” to make strategic investments that will “speak to the future and the kind of innovation and creativity this campus is known for,” such as the Blue Waters petascale computing facility, Herman said. (The American Recovery and Reinvestment Act of 2009 was passed by the U.S. House of Representatives Jan. 28 and is before the U.S. Senate; the plan passed by the House included increases in funding for student Pell grants and student loans as well as funding for modernization and renovation of facilities.)

The other panelists at the meeting: Nicholas Burbules, chair of the Senate Executive Committee; Thomas Korder, chair of the Council of Academic Professionals; Thomas Martin, president of the Staff Advisory Council; Jaclyn O’Day, student body president; and Renee Romano, vice chancellor for student affairs.

Unit budget reductions    

• All units must set aside 1.5 percent of their budgets; units supported by General Revenue Funds will be asked to contribute more, particularly those units that don’t directly affect learning.
• If a cash rescission is required and becomes permanent, greater reductions will be required for next fiscal year, which begins July 1.
• Some one-time actions will protect units this year.

Short-term actions

•  Critical hires only – positions key to student services and programs
• State-funded travel limited to development and scholarship
• Defer/delay non-critical purchases
•  Make necessary investments to allow institution to compete for funding

Long-term actions

•  IT@Illinois: project to redesign how we support information technology, provide better quality of service at a lower cost to protect students and programs      
• Service centers: find ways to minimize support services costs      
• Process improvement: use business methodology to improve quality and reduce costs of delivery      
• Energy conservation: investments in energy-saving programs and facilities are beginning to provide returns this year.

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