University units are being asked to put 6 percent of their funds – a total of $45 million – aside to prepare for a possible budgetary rescission by the state, and they should prepare for even larger reductions next fiscal year, President B. Joseph White told members of the Urbana-Champaign Senate during the annual meeting with the faculty and in a Nov. 3 e-mail to the campus community from him and Stanley O. Ikenberry, interim president designate.
The university's budget was among the topics discussed when White and Richard Herman (now a former chancellor), Ikenberry and interim provost Robert Easter met with senators at Levis Faculty Center on Oct. 26.
The state's struggling economy - and a multibillion-dollar revenue gap in the state budget - pose two threats to the university: a potential budgetary rescission later in the fiscal year and ongoing cash flow constriction, White told senators.
Currently, the state is about 120 days in arrears in its payments to the university. Since fiscal year 2010 began on July 1, the UI has paid four monthly payrolls, and has billed the state a total of $317 million for its FY10 appropriation - but has been reimbursed for only $5 million by the state thus far.
"(Unit) leaders are being asked to develop contingency plans that maintain academic quality to the extent possible and ensure that students and research programs are served," White said. "At this time, we do not anticipate - we do not anticipate - furlough days or large-scale layoffs prior to the end of the calendar year. We hope that they will not be needed at all.
"However, hiring across the university needs to be constrained and done only on a critical, by-exception basis for the remainder of the fiscal year. And since we are in an extremely uncertain time, we cannot rule out further actions should the need arise."
Last fiscal year the university anticipated a possible rescission by the state and set aside $20 million of its appropriations early on, a move that proved prescient when the state asked for $19 million back midway into the fiscal year.
The state's financial condition is even worse this year, White said. "Given the possibility of a rescission and the reality of difficult cash flow, we must take steps that are prudent and preparatory but also compatible with putting our people first."
Despite the mounting pressures of the economic recession, White said that he has been intent on "keeping people employed and with full paychecks coming," and is proud that so far he has been able to avoid layoffs, furloughs and other forms of pay reductions.
"I've had to impose layoffs and pay reductions in the past, and it's the hardest work I've ever done," White said. "It takes a long time to get back to normal once that boundary is crossed, so not crossing it has been top priority for me. I hope we can continue to avoid such actions. It's not going to be easy."
FY2011 also "looks very challenging," in part because $45 million in federal stimulus money that the university received in FY10 is not expected to recur in FY11, which will require larger tuition increases and cost reductions than anyone is going to like, White said.
In Herman's last remarks to the senate as chancellor, he urged faculty members to maintain the excellence that Illinois is known for and not let the university's mission be compromised.
"Don't retreat into the ordinary," Herman said. "Retain the great ambitions that we've always had, and even if we do less, we must do that at its highest level. Never forget what our institution is about in the broad spectrum of society."
Regarding the search that is under way for White's successor, Ikenberry urged faculty members to network and submit possible candidate names.
The reconstituted UI Board of Trustees - with seven new members and two returning members - "will prove to be one of the major assets" that "will pay the university great dividends over the long haul," Ikenberry said.
He added that there had been "a dramatic culture change" on the board, which will be evidenced by the board's reducing its number of major committees from 14 to four when it meets Nov. 12 at Springfield. That is making the board more focused, policy oriented and desirous of working collaboratively with the senate.
During the question-and-answer session that followed the panelists' remarks, audience members voiced concerns about the lack of faculty representation on the board of trustees, about wages for graduate teaching assistants, and the positive time reporting mandate.