As the university copes with a growing backlog of unpaid state appropriations, cost cutting and increased fees and tuition were the focus of discussion at the Jan. 21 meeting of the UI Board of Trustees in Chicago.
To date, the state is $446 million behind in payments to the university, said Walter Knorr, university vice president and chief financial officer.
The total state appropriation for this fiscal year, which began July 1 and ends June 30, is $743 million.
"Last year at this time we had received 35 percent of our state appropriation, but this year we've received 6 percent," he said.
State appropriations and tuition dollars bring in the most funding for the university, Knorr said.
Tuition revenue has increased from $486 million in fiscal year 2006 to $730 million this fiscal year - nearly matching the amount the university was promised by the state, Knorr said.
A tuition increase of about 9 percent is possible for fall semester, President Stanley O. Ikenberry said.
Trustees plan to discuss tuition at their March 10 meeting in Urbana.
"It's difficult for us to imagine even a best-case scenario that doesn't involve a high single-digit increase," said Ikenberry, who is serving in an interim capacity.
Ikenberry said a final decision on tuition may have to wait, however.
"We want to defer action until we have a little clearer picture of what the financial situation may be in Springfield, and I'm doubtful that by March we will have that clarity," he said.
University trustees heard a presentation from a committee charged with looking into ways to reduce costs.
The Administrative Review and Restructuring Working Group is reviewing the university's administration and the way its services - such as information technology, human resources and business operations - are delivered.
"We have a significant, unprecedented financial crisis for the university to deal with and it now requires structural changes," said Craig Bazzani, co-chair of the group and senior adviser for the UI Foundation.
Temporary relief this fiscal year may come from hiring freezes, furloughs and rescissions, but long-term solutions are necessary, Bazzani said.
The administrative review group will seek ways to cut information technology costs by 10 percent and restructure purchasing operations to save as much as $30 million, Bazzani said.
"We want to look horizontally within campuses to see where functions might be amalgamated," Bazzani said. "Are there functions or services that might be realigned? How can we improve processes?"
The group plans to provide its initial recommendations in March and submit a final report to Ikenberry by June 15.
"Every dollar we can save in administrative costs is a dollar we can use for academic objectives," Ikenberry said.
During Thursday's meeting, trustees approved increases to next year's student fees and housing rates to meet operational costs.
Student fees will increase $39 per semester at Urbana, $19 per semester at UIC and $51.25 per semester at UIS.
Housing costs, based on a standard double room and meal plan, will increase $201 per semester at Urbana, $274 a semester at UIC, and $100 per semester at UIS.
Other business
- Christopher G. Kennedy, who was named to the board Aug. 26 by Gov. Pat Quinn, was re-elected chairman of the board during the annual election of officers.
Kennedy, president of Merchandise Mart Properties Inc., was elected chair at the first meeting of the reconstituted board Sept. 10.
"The state's unresolved budget situation has put the university in a cash crisis, and the board is deeply engaged in a presidential search," Kennedy said.
"The University of Illinois is a great and resilient institution, and I am confident this board, together with a dedicated UI faculty and staff, will work together to emerge an even stronger and better university."
- Trustees Edward L. McMillan and Pamela B. Strobel were re-elected to serve with Kennedy on the board's executive committee.
- The board approved the appointment of Richard Wheeler as Urbana's interim vice chancellor for academic affairs. He will continue to serve as vice provost.
- Trustees revised the dollar limits on purchases, leases and contracts that require board approval. Among the changes: The amount required for board approval for professional services will be $1 million, instead of the previous $100,000. For construction projects, board approval will be required when projects exceed $2.5 million, an increase from the previous level of $500,000.
Let's talk about the budget ...
Faculty and staff members who want to learn more about the financial situation facing the university and what steps are being taken in response are invited to attend one of two scheduled presentations. These meetings provide an opportunity to talk with campus leaders about how best to respond to this budget challenge.
Campus administrators scheduled to attend: Richard Wheeler, interim vice chancellor for academic affairs, Barbara Wilson, vice provost, and Mike Andrechak, associate provost.
- 3 to 4 p.m. Feb. 5 at 5602 Beckman
- 8:30 to 9:30 a.m. Feb. 11 at Heritage Room, ACES Library