The state’s budget stalemate won’t affect the university’s ability to meet its payroll obligations, Chief Financial Officer Walter Knorr told trustees at their Sept. 10 meeting.
The university already covered the August payroll and has promised to cover September’s as well.
Meanwhile officials are awaiting a budget deal among state legislators that would reveal the university’s fiscal year appropriation and allow Knorr’s office to prepare a budget based on specific numbers.
Last year’s university appropriation was around $660 million, but cuts have been proposed for fiscal 2016 ranging from 8.5 to 31 percent. University officials have asked campus leaders to submit financial numbers to address several funding scenarios.
The university also lost $18.4 million dollars that was rescinded from last year’s appropriation.
Knorr said despite the “profound uncertainty,” advanced planning has allowed the university to navigate the difficult times that have defined the recent era. In recent years, as the state’s fiscal trouble became clear, his office instituted several cash flow mechanisms to keep operations up and running.
“We’ve been prepping for this (situation) for the last half-dozen years,” he said.
The university also has instituted an administrative hiring freeze and has held off consideration of a salary program for the next year until the 2016 appropriation is known.
“All of these decisions have been made and will be re-examined once there’s a budget in place,” President Timothy L. Killeen said after the board meeting. “We do anticipate or can imagine further erosion of state support. We’re considering further cuts in administration, considering further implementation of some of the aspects of the academic reviews that have been underway, we’re looking at hiring processes, we’re looking at the salary programs. Everything has been on the table for quite a while.”
Knorr said the state still owes the university $49 million for the past fiscal year and currently has about $160 million in unprocessed bills from the U. of I. for 2016, much of it used by the university to meet payroll.
The state continues to pay Medicaid claims to UIC’s hospital at the 2015 rate, which Trustee Timothy Koritz said could work to the university’s advantage because the 2016 rate will likely be reduced. The state also makes more than $1 billion in annual payments for employee health care and pension benefits.
The state also has failed to pass a capital appropriations bill, leaving the university spending institutional money to keep building-renovation projects going. There also has been talk among some legislators to move more of the health care benefits costs to the university.
Knorr said the budget impasse had led to threats by bond-rating agencies to further reduce the university’s borrowing rates. State budget officials, meanwhile, “are not accepting any (bills) from us” until the impasse is solved.
Knorr said his office worked most of the summer responding to legislative requests for financial information.
“There have been a myriad of requests coming in asking for a quick turnaround,” he said.
Knorr said the impasse has left university officials wondering when they will be able to submit an operating budget to trustees. He said it takes about 60 days for his office to prepare a budget, once the state approves the university’s appropriation.
“Which means we’re probably not going to be in a position to submit a budget by the November (board of trustees) meeting,” he said. “We’ll continue to operate this way until further notice.”
Killeen said he and other university leaders continue to advocate on behalf of the university and express how the state benefits from its work.
“We’re not just waiting around to see what happens,” he said. “We’re trying to further the process.”
Other stories from the Sept. 10 U. of I. Board of Trustees meeting:
• Enrollment strategies seeing success, leaders say
• U. of I. Sesquicentennial celebration starting to take shape
• Board OKs background checks, gender reassignment surgery, Urbana construction
This article was imported from a previous version of the News Bureau website. Please email news@illinois.edu to report missing photos and/or photo credits.
