CHICAGO – The University of Illinois is bracing for a tight budget situation in the coming year.

As of December 2008, the state of Illinois budget shortfall was estimated at just over $2 billion, UI Chief Financial Officer Walter Knorr reported to the UI Board of Trustees on Thursday.

"Certainly the state has been reacting to the shortfall," he said. State reimbursements to the university, for example, are running about 90 to 120 days behind.

The university has made plans to set aside 2.5 percent, or $18 million, of its general revenue fund, at the request of the Illinois Board of Higher Education. That amounts to about $2 million less than the $20 million budget increase the university received from the state for the current fiscal year.

But administrators are also drafting contingency plans in case the official rescission is as high as 10 percent.

Those plans include hiring new employees only when necessary and reducing nonessential travel and purchases.

"We are 75 percent personnel, so (human resources) actions were one of the primary focuses," such as freezing any positions that are open, Knorr said.

The issue of tuition also looms.

"We'll be facing in March a critical tuition decision. That's going to be a real challenge in this environment," Knorr said.

Tuition has not been set for the next school year yet. The next board meeting is on March 11, 2009, in Urbana.

The university has drafted a fiscal year 2010 budget request, but the state has not taken up a budget yet. The university's 2009 budget is $4.2 billion.

"We are going to be looking at more pressure on the personnel budget for 2010," Knorr predicted. And that may mean "furloughs or other employment actions for 2010," he said.

"It's a grim picture and we're going to have to deal with it," he said.

On a positive note, Knorr did say he does not expect a big budget increase for utilities for 2010.

In other board action:

– Trustees approved increases for student and housing fees for the 2009-2010 school year.

The Service, General and Health Fees student fees are set to climb by $71, or 5.5 percent, for students on the Urbana campus. The increases are necessary, according to the university, to pay for debt, repair and replacement of facilities, and increased prices in utilities and goods and services.

With the increase, total student fees for fall 2009 in Urbana will be $1,368 per semester or $2,736 per year.

Fees for the Chicago and Springfield campuses will also increase this fall.

Higher housing fees were also approved. Prices for single, double and triple rooms for undergraduates will increase about 6 percent for the Urbana campus.

The proposed room and board fees for a double room in Urbana, with a 14-meals-per-week food plan, is $8,684 for the year. Halls with air conditioning cost $200 more and rooms in the living/learning communities cost $310 more.

Also on Thursday trustees voiced formal support for a major expansion and renovation of the hospital at the University of Illinois at Chicago. The project, which has a projected price tag of about $660 million, could one day house the hospital's liver center, neuroscience center, center for robotic surgery, operating rooms and more.

The university hired SmithGroup to complete a master design study for the project.