URBANA — Despite a bleak budget year, the University of Illinois plans to award merit-based raises averaging 2.5 percent to faculty and staff this summer, though the money will be highly targeted.
Money for the raises, roughly $29 million, comes from internal budget reallocations over the last two years and tuition income, administrators said Monday. The UI saw its state funding drop by $44.2 million, or about 6 percent, for fiscal 2013, which began July 1.
"These are hard times. Any increase is going to be questioned; it's normal," said Christophe Pierre, UI vice president for academic affairs.
But faculty compensation is "very market-driven" and the university has to stay competitive to attract and retain its top professors, Pierre and other administrators said.
Other Big Ten universities are planning salary programs of 1 percent to 3 percent, said Randall Kangas, UI associate vice president for planning and budgeting.
Employees also are acutely aware of recent cuts in state pension benefits and the possibility of further reductions, officials said.
Administrators don't have official numbers yet on how many faculty left the UI as of June 30, but "we're hearing lots of offers are being made," Kangas said.
UI President Bob Easter said 2 percent of the salary money will go toward general merit-based raises, and another 0.5 percent will address market or equity concerns — retaining faculty vulnerable to outside offers, for example, or adjusting salaries for longer-term professors whose pay has fallen below the market and who sometimes are earning less than newer hires, Easter said.
The raises won't be automatic. No employee is guaranteed a raise, there is no minimum increase, and raises will vary significantly, officials said.
Any individual increase above 7 percent on the campuses will be "carefully monitored," according to a letter from Easter to university officers on Friday. Also, raises exceeding 7 percent for senior administrators, or for academic professionals within the university administration, will require personal approval from Easter, the letter said.
Easter said all commitments to existing contracts and promotions also will be honored.
The letter described the raises as "small but critical" during a challenging budget year.
"We've got great employees who deserved appropriate and competitive support," Easter said Monday.
Even with the raise, UI employees aren't keeping up with inflation, Pierre noted.
UI workers received, on average, 3 percent raises last summer, nothing the two years before that, and 1.5 percent in 2009.
For the last two years the university has tried to plan how it could provide merit raises during lean budget years, Easter said. As positions became vacant, for example, the UI tried to "recapture" those dollars to apply toward other goals, he said.
However, "this taps us pretty well," Easter said. "We won't be able to go much further."
The UI's preliminary budget request for fiscal 2014 — presented Monday to a UI Board of Trustees committee, the first step in the year-long state budget process — includes $53.4 million for employee raises. The money would provide 3 percent merit-based raises plus another 1.5 percent targeted toward highly recruited or under-compensated faculty, officials said.
The overall budget request seeks an $82.8 million increase in the UI's state funding. Besides the money for raises, it includes $29.4 million to meet cost increases in Medicare, worker's compensation, operations and maintenance, utilities and library acquisitions.
The full board will review the budget request next week in Chicago and take a final vote in September. It will then be submitted to the Illinois Board of Higher Education, which makes recommendations to the governor and Legislature.
"Based on the financial difficulties in the state and based on the reduction we just had, it's hard to be optimistic. But one never knows," Pierre said of the budget's prospects. "It's important to really point to what our real needs are. We need to continue to state our case."
The UI's preliminary capital funding request totals more than $700 million for the three campuses, including almost $304 million for Urbana. The top priority is repairs and renovations, as well as $15 million for a new Natural History Building and $50 million to redevelop the Undergraduate and Main Library.
But officials noted that most items are recirculated from previous requests that weren't funded. Capital funding has been "spotty at best" over the last decade, Pierre said. The UI's last capital appropriation came in 2010 — $254 million, which included $60 million for the Blue Waters petascale supercomputing facility, and $57 million for the Lincoln Hall renovation. But the university received no state capital funding from 2005-2009.