Events

Town Hall Meeting - January 22, 2009

Panelists: State Universities Civil Service System’s Employee Advisory Council President Barney Bryson, Faculty Senate President Professor Nick Burbules, Chancellor Richard Herman, Provost Linda Katehi, Chair of the Council of Academic Professionals Tom Korder, President of the Staff Advisory Council Tom Martin, Student Body President Jaclyn O’Day, Vice Chancellor for Student Affairs Renée Romano, and members of the campus community

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The state of Illinois is facing political instability in the midst of a national economic crisis.  Many other states (44) are also experiencing economic problems (e.g., California and Arizona are in more dire situations).  The state’s revenue shortfall affects the University of Illinois and we could possibly experience a cut in General Revenue Funds (GRF) of more than 7-8 percent.  We have no definite information on how much we need to cut from this year’s budgeted amount or what the next fiscal year might require in terms of cuts.  For planning purposes only we have assumed a 10 percent cut in GRF funding.  Units were told to set aside 1.5 percent of the GRF received and this will be the first source for revenue if we have to send money back to the state.  Units have been informed that they are not to penalize students by using tuition to pay for any cut.  We will first cut GRF-funded activities that have limited impact on student learning.

This challenge is three-fold in terms of time periods: an immediate cash rescission this fiscal year; a likely diminution of state funds next fiscal year (FY 2010); and the long-term- perhaps 3, 4, and 5 years from now.  To continue our drive toward national and international preeminence, we will continue investing in areas and projects that hold promise for the future, such as high performance computing (e.g., the Petascale project).  Illinois has been and will continue to be a great engine for the future – both in intellectual and economic development.  In the next few years, higher education will see more funds than in the past 24 years – we must compete for these funds. 

As shown on the bar graph from FY 1989 to present, the direct state support in constant dollars per student has decreased by 50 percent from the 1989 level. Even with increases in tuition there is a gap in funding our operation. Funding comes from various revenue sources, however, aside from some GRF and tuition funds these sources are not interchangeable. Other forces weakening our ability to handle the current gap in funding are last year's energy crisis which translated in a substantial increase in utility costs, increased spending on maintenance projects to reduce energy spending at a time the state R&R funds have been zeroed out for the past five years and increases in our salary budget, which did not match our revenue generation. The reality is that our assets are people and 80 percent of our expenditures go to salaries.

We have taken steps to deal with the situation even without more definite information from the state.  In the short-term only, critical positions will be filled and wherever possible that will be achieved through redeployment of current employees and retraining.  Hires that support student programs and services will be deemed critical.  We will limit travel unless it is tied with fundraising or research.  We will not allow units to create deficits since deficits weaken our institution and move today’s problem to tomorrow.  We will delay purchases and new services and continue our efforts to provide financial aid.  The institution must be more flexible in implementing ways to provide services at a reduced cost, e.g., IT and Service Centers.  Activities were already underway to reach these goals through the campus’ strategic plan, not just in reaction to the current economic situation.

There is good news in that we have been successful in reducing utility costs by putting energy conservation programs in place and the investing in deferred maintenance in facilities.  We are already seeing a return on our investments in this area, and Facilities and Services is to be commended for its fine work.  We will not allow the challenges to blind us – we will stay focused and search for opportunities.  This is how to move the institution forward and that will take all of us working together.