The university is preparing for the repercussions of a state budget revenue shortfall by planning for a rescission in the current fiscal year, Walter Knorr, chief financial officer and university vice president, told the UI Board of Trustees on Jan. 15 in Chicago.
With the nation in an economic recession, the state is projecting a $2.1 billion budget shortfall for fiscal year 2009, Knorr said.
State payments to the university are running about 90 to 120 days behind schedule, he added.
“Certainly, the state has been reacting to the shortfall with their cash flow,” said Knorr.
In October, UI President B. Joseph White told university leaders to prepare a budget plan for the next six to 18 months, asking them to try to “protect academic quality, serve students well and minimize adverse impact on university employees.”
“Senior leadership of the university has been working on a plan for what could be a difficult remainder of FY09 and what could be a very difficult FY10,” he said.
The Illinois Board of Higher Education directed UI administrators to hold 2.5 percent, or $18.6 million, of the university’s state appropriation in reserve, Knorr said.
But elected officials in Springfield could require state agencies, including public universities, to reduce their budgets much more, depending on the fiscal condition of the state.
In December, all three UI campuses announced cutbacks that included filling only essential campus personnel positions and delaying nonessential expenditures for equipment and travel.
University administrators also made plans for a rescission as high as 10 percent, or $74.3 million, Knorr said. In addition to holding open vacant positions and reducing nonessential spending, the plan would use $20 million set aside last summer as a cash contingency, as well as unspent cash balances.
The plan seeks to minimize impact on university personnel, he said.
At the meeting, trustees approved increases to next year’s student fees and housing rates to meet operational costs.
Student fees will increase $71 per semester at Urbana (up 5.5 percent), $39 per semester at UIC and $107 per semester at UIS.
Housing costs, based on a standard double room and meal plan, will increase $243 per semester at Urbana, an increase of 5.9 percent. UIC’s housing rates will rise by $338 a semester, and UIS students will see a $180 increase. Tuition rates for FY10 may be brought to the board for discussion at its March 11 meeting in Urbana.
“We’ll be facing, as early as March, critical tuition decisions for what we’re going to do for FY10, and that’s going to be a real challenge in this environment,” Knorr said.
In other business:
• Trustee Niranjan Shah was selected chairman of the board during the annual election of officers. Trustee Lawrence Eppley, chairman for six years, chose not to seek re-election.
Shah, who took over as board chairman mid-meeting, was the unanimous choice of trustees.
“I’m honored and humbled with your trust and confidence,” he said. “All of us on this board, we have one common agenda, which is to move this university forward and to provide quality education at an affordable cost.
“We face many challenges in maintaining the high quality, accessibility and affordability of our university; a shared vision and teamwork will enable us to achieve our goals.”
Shah, chairman and chief executive of a Chicago-based engineering firm, is the first Asian American to serve as chairman of the board. He has been a trustee since 2003.
• The board approved the appointment of Bruce Smith to serve as dean of the College of Law. Smith currently is a professor and associate dean for academic affairs in the college. Smith succeeds interim dean Ralph Edwin Brubaker.
• The board approved the actions required for the UI Global Campus to pursue accreditation. Global Campus leaders can now organize an academic policy council and the chief executive can recommend academic staff appointments to the university president and trustees.
• The trustees approved an Alcoholic Beverage Management Policy, granting each campus the authority to develop its own regulations and procedures for sales and service of alcoholic beverages at public events held in university buildings under the control of the board of trustees. The policy is in accordance with a recent amendment to the Illinois Liquor Control Act of 1934, which broadened the trustees’ powers, and sets forth guidelines for administrators to take into account when deciding whether to allow sales at events, such as the physical settings of events, the proportion of participants under age 21 and whether an event is a student activity or a student-related activity. The chancellor’s office at each campus will be responsible for approving sales/service at each event, for keeping records of approved events for five years and reporting quarterly to the Office of the President. The newly amended regulations will allow liquor sales/service at public events, including athletic, cultural, educational, entertainment and social events. A working committee that will include representatives from the Chancellor’s Office, the Division of Intercollegiate Athletics, Dining Services and other units is being formed to develop policies for the Urbana campus.