The state’s budget crisis continues to impact the U. of I., creating uncertainty for university planners preparing for the fast-approaching academic year.
Illinois lawmakers and Gov. Bruce Rauner failed to reach an agreement on a fiscal 2016 operating budget in July. One month into the new fiscal year, they still are at an impasse over how to solve a $3 billion annual shortfall.
Reacting to the situation, the university has put on hold its budget for FY 2016, paid July employee salaries from existing funds, instituted a hiring freeze in central university administration, and on July 28 announced the 2015-16 employee general salary program would be delayed.
“Each week that passes without a state budget from Springfield clouds the near-term future and leaves us unable to finalize the university’s fiscal 2016 operating budget,” President Timothy L. Killeen said in a massmail to employees.
He said the salary program would be put aside until the governor and legislators pass a budget agreement and the university’s appropriation amount is known. In the meantime, Killeen said, he and other officials would continue to “press the case for robust state support for public higher education.”
“Once the state budget situation is resolved and the U. of I. deals with any adjustment in our spending plan that may be required, we will revisit the subject of salaries for 2015-16,” he said. “We hope that this period of uncertainty will pass soon.”
Walter Knorr, the university chief financial officer, said much of the uncertainty comes from the fact so many figures have been thrown about concerning cuts to the higher education appropriation.
He told trustees at their July 23 meeting that university administrators had been asked to consider numerous budget reduction scenarios in their planning for next year.
He said estimated reductions to the U. of I.’s state appropriation have ranged from $57 million to $209 million, based on last year’s appropriation of nearly $663 million. The state still owes about $78 million for the FY 2015 university appropriation, which included an $18 million rescission.
Knorr said payments for the state’s $105 billion unfunded pension liability continue to be a competing funding priority for legislators, but that a recent bill that would have moved about $9 billion of those costs directly to the university was defeated.
“It would have wiped out the net positive (position) of the university,” Knorr said. “Instead, the state of Illinois acknowledged their responsibility for pensions.”
He said there is still a possibility the university will be asked to foot more of the cost of employee health care in the future. For every percentage point of the total amount the university is asked to cover, he said, it would cost an additional $20 million.
The state budget crisis also has contributed to the loss of capital funding used for campus building projects, with no statewide capital bill passed since 2010. Knorr said the university has been granted authority to use institutional funds to continue funding current projects.
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