URBANA — Pension reform could cost the University of Illinois up to $180 million annually, a price administrators say it cannot afford.
Vice President Walter Knorr told trustees Thursday that state efforts to shift pension costs to universities and cut Medicaid costs by a fifth add two more "material uncertainties" to its state support — on top of a long-term erosion of its annual appropriation and a backlog of reimbursements that currently totals $349 million.
The UI's state general revenue funding has dropped 34 percent in inflation-adjusted dollars since fiscal 2002, to about $667 million, while the university has added 10,000 students during that decade, Knorr said. The governor's budget calls for flat funding for higher education next year (aside from more money for student need-based grants and pension costs through the State Universities Retirement System).
Board Chairman Christopher Kennedy noted the state has consistently owed the UI at least $225 million since mid-2009.
"So structurally, the state has cut our funding by $250 million," Kennedy said, noting that tuition is also supporting an ever-larger share of the UI's educational mission.
Quinn has called for a $3 billion cut in the state's $15 billion Medicaid budget. That would affect payments to the UI medical center in Chicago, where more than a third of the patients are on the government health insurance program for the poor. The hospital operates on a slim margin, and UI health administrators said Wednesday that a "double whammy" from pensions and Medicaid cuts could force it to close.
Proposals are circulating to have universities pick up the employers' share of pension costs now paid by the state. That could mean a $180 million liability for the UI, Knorr said.
President Michael Hogan told legislators earlier this week that the UI is willing to do its share but couldn't possibly pick up the whole cost. UI officials suggest the state should cover the amount it would be responsible for through Social Security, which university employees don't participate in.
"We should be prepared to step up and play a part," Hogan said in an interview last week.
Hogan also said he'd like to see the plan phased in over several years "so it doesn't hit us in the face in a single year."
The UI's Institute of Government and Public Affairs last week hosted employee forums on pension reform on all three campuses. Faculty and staff were willing to support reform "if it's not too draconian, and it's phased in," he said.
They "know something's going to happen. It's a matter of 'What is it, and how reasonable is it?'" he said.
University presidents also met last week with Quinn's pension working group, top legislative leaders and union leaders, and Hogan is optimistic about finding a solution that shares the burden appropriately.
In her annual report to the board Thursday, UI ethics officer Donna McNeely reported that this has been a year "without precedent" for the caseload and visibility of her office. The university has had two high-profile investigations in recent months, regarding grade and score inflation at the UI law school and anonymous emails attributed to former chief of staff Lisa Troyer.
Overall, McNeely said her office reviewed 72 inquiries or complaints, and 26 required "some level of follow-up," including the two investigations that produced public reports.
McNeely said the volume produced a backlog of cases in the fall and again in December and January, preventing her office from responding within the usual 24 hours.
"We really had to prioritize the cases, based on the information and the severity of the issue," McNeely said in a board committee meeting earlier this week. "I don't feel anything fell through the cracks."
In other business
— Trustees expressed support for a plan to scale back a 21 percent tuition increase — $3,500 a semester — for incoming UI medical school students, which was approved as part of a larger tuition package in January. Under a revised plan, the rate would rise by about 3 percent, or $500 a semester, for current and incoming students.
Students had protested that a $3,500 increase could hurt the school's success in recruiting a diverse medical school class. Medical students Peter Lazzari and Alejandra Cano, who addressed the board Thursday, also noted that it wasn't presented to students until after the January vote.
UI officials have pledged to gather more student and faculty input in the future.
Kennedy complained that he couldn't find any documentation of the 21 percent increase in his board materials.
"I thought when I voted (in January) I had approved a tuition increase across the board that was no higher than inflation," Kennedy said. "I think the staff has an affirmative obligation to inform us of areas of interest when there's a reasonable chance that we have misunderstood the material."
The board couldn't vote on the change Thursday because it wasn't on the agenda but agreed to schedule an executive board meeting in coming days.
— Trustees approved a new $80 million residence hall for the north side of the Ikenberry Commons site, the third phase of a project to replace all the Champaign residence halls.
— They named Professor Allen Renear as interim dean for the Graduate School of Library and Information Science, following John Unsworth's departure for a job at Brandeis University.