The UI will receive more state support during fiscal year 2008 under the state budget signed by Gov. Rod Blagojevich on Aug. 23, nearly two months after the fiscal year began on July 1.
The new budget increased General Revenue Fund appropriations for Illinois public universities by $23.5 million over their FY07 levels, including a $13.3 million – or 1.9 percent – increase in the UI’s base operating appropriation.
The increase brings the UI’s total general revenue fund appropriation to $722.3 million for FY08, and marks the second consecutive year that the UI has received an increase in state funding after five lean years of flat budgets and rescissions. The state is the university’s single largest funding source, providing more than $1.16 billion of the UI’s $3.9 billion annual operating budget.
In an Aug. 28 e-mail message to the campus community, President B. Joseph White wrote: “Having our state appropriation finalized after an historic budget legislative session provides the university with certainty now about state funding for fiscal 2008 and allows us to move forward with a salary program, which I have authorized. It is a relief to have this vital piece of the university’s total resources equation in place as we begin the new academic year on our three campuses.”
Combined with tuition revenue, the increase in the UI’s state appropriations will enable the university to allocate funds for high-priority projects such as a $36.8 million initiative to enhance academic quality that includes $22.9 million – or 2.5 percent – for salary increases for employees and $8 million for faculty recruitment and retention.
After a two-year “pension holiday” during which the state reduced contributions to its employee pension programs by more than $1 billion because of budgetary deficits, the state will fund the State Universities Retirement System and its four other pension systems at the levels mandated by a 1996 law. The law established an aggressive 50-year payment schedule to bring the plans up to 90 percent full funding by 2045. The state’s unfunded liability to SURS is estimated to be about $7.4 billion as of June 30, 2007, according to Dan Slack, SURS executive director.
The state will pay about $441 million for employee health care and pension programs during FY08. However, the UI and other public universities are required to pay a total of $45 million from their appropriations to cover employee health insurance costs, with the UI’s share being nearly $24.9 million.
The state budget also provided a 7.6 percent – or $26.8 million – increase in funding for the Monetary Award Program, the need-based financial aid program for Illinois resident students, but did not extend funding for the MAP Plus grant program into a second year. The MAP Plus program provided grants of up to $500 during the 2006-2007 academic year to some Illinois resident students whose family incomes disqualified them for the need-based MAP grants.
The university is increasing its financial aid support for students by $4.5 million during FY08 to help offset the tuition increases that went into effect this fiscal year. The Urbana campus will provide about $11 million in need-based aid during FY08.
Several financial aid programs – including Illinois Veteran Grants and the College Savings Bond Bonus Incentives – received no increases or had their funding reduced in the state budget. UI officials estimate that the university will waive more than $4 million in tuition for veterans during FY08, as state universities in Illinois are required to do when the grant program funding is insufficient to meet demand.
Blagojevich vetoed funding for IllinoisVENTURES, the UI’s technology commercialization company, which received $750,000 in FY07, and for the State Matching Grant Program for research, which brought the UI $4.2 million in research grants during FY07.
Although the UI’s operating budget is in place, its capital appropriation is still undetermined, as lawmakers have yet to decide on capital spending for the fiscal year. The UI requested an FY08 capital appropriation of $262 million that included $55.1 million for renovating Lincoln Hall and $42 million in matching funds for construction of the Electrical and Computer Engineering building at Urbana as well as funds for other capital projects at the three UI campuses. The UI has not received appropriations for new capital projects for the past three fiscal years.
Planning funds for the Lincoln Hall renovations and for completion of other capital projects from prior years were reappropriated from the FY07 budget.
