Schools starting to feel budget pinch
SPRINGFIELD — The headlines about the state's colleges and universities grow more dire with each passing week.
Layoffs, furloughs, budget cuts, financial emergencies, student protests from Charleston to Chicago, even a warning from Moody's about the schools' long-term viability.
The pressure, says Western Illinois University budget Director Matt Bierman, "has gone from mild to serious very quickly as we progress through the spring semester."
While most schools say they can make it through the semester without the $2 billion in operating funds the state owes colleges and universities this year, it's not clear what would happen in the fall. And there's a general unease about the future.
That's why comments from Senate Republican Leader Christine Radogno a few weeks ago caught the attention of state Sen. Scott Bennett, D-Champaign.
In a meeting with the State Journal-Register's editorial board, Radogno indicated the state's budget difficulties might have an upside. Colleges and universities cut administrative costs in response to pressure from the state, and "global questions" about higher education can now be asked, she said.
"Should we have six, eight schools of education, everybody having a program and everything? I don't know," Radogno was quoted as saying. She noted a couple of two-year colleges had expanded to four years, including what is now the University of Illinois Springfield, and "maybe we ought to have more going from four to two."
That troubled Bennett. If lawmakers want to talk about restructuring higher education in the state, he said, they should hold hearings.
"What we don't want to see is some kind of starving out, which is what's happening now, where the strong survive and the weaker ones die away," Bennett said. "That's not the way we should be deciding our higher education system.
"Honestly, that's what appears to be happening. I don't know if that's the design or neglect which is resulting in this."
Radogno spokeswoman Patti Schuh described Radogno's comments as part of a "freewheeling" conversation with the newspaper's editorial board, not a policy proposal. The message, Schuh said, was that budget cuts present an opportunity to "look at things differently."
"It's been said by many, 'Never let a good crisis go to waste,'" Schuh said. "There are legitimate questions that are being asked."
But she added, "There's no plan or policy on the table right now."
ISU's Dietz: Better 'find some money' for quick fix
Legislators and university presidents emphasize that they've heard no discussions about plans to weed out weaker schools or reconfigure higher education.
But Schuh and others acknowledged "chatter" and rumors, fueled by anxiety over the drastic measures being taken by schools now in their eighth month without state funding.
"I think we're in unprecedented territory," said Illinois State University President Larry Dietz, who heads up the group of nine public university presidents in advocacy efforts in Springfield.
It's legitimate, he said, to have longer-term discussions about the number of universities or overlapping degree programs — but not in the midst of the worst budget crisis in recent memory.
"There's discussions around lots of different topics that perhaps there wouldn't have been had it not been for these uncharted waters. Nothing should be above reproach or above review," he said. "But those are long-term issues.
"The bottom line is that we have students who are enrolled right now who are expecting teachers to teach their classes and staff to provide services. And we need to figure out a way to find some money to meet those needs."
James Applegate, executive director of the Illinois Board of Higher Education, said Rauner's Fiscal Year 2017 budget keeps community college funding stable and cuts that of public universities, but provides extra "performance based" money for both for schools which meet certain goals.
No school should close because of lack of funding, Rauner spokeswoman Catherine Kelly said.
EIU: Up to 24 furlough days before June 30
The University of Illinois, ISU and other larger schools with diverse financial reserves — from research grants to gifts and endowments — are stable for now, though they've taken measures to trim costs and prepare for significant cuts.
But the budget impasse is taking a toll on smaller regional universities:
Eastern Illinois University in Charleston just sent layoff notices to 177 civil service employees — mostly housing, food service and building maintenance workers.
And academic employees will be required to take up to 24 furlough days before June 30.
Chicago State University — a 149-year-old school of about 4,700 students on Chicago's south side, near the junction of I-57 and I-94 — has declared a state of financial emergency, allowing it to fire tenured faculty.
Western is stable, but like other schools it's drawing up plans to eliminate programs next fall and has alerted 30 nontenured faculty of possible layoffs in 2017-18. Other layoffs are likely, Bierman said.
The situation prompted the Higher Learning Commission, a regional body that accredits colleges and universities, to send letters to schools this month asking for "candid" explanations of their financial situations and enrollment projections — and for those who face possible closure, a plan for what would happen to their students.
The agency now plans to make a site visit to Chicago State in early March, Applegate said.
Applegate was unaware of any other case where a state's entire public university system was asked to provide that information to an accreditation body.
"We never thought we'd be having this conversation around public universities or potentially some community colleges," Applegate said. "There are a number of institutions that are racing up to the cliff."
The IBHE has worked with other schools that have had to close or downsize, Applegate said. Benedictine College recently decided to move entirely to adult education rather than traditional students, for example.
But most closures have come in the for-profit sector, he said.
UI professor: Scary signs from financial market
Schools are getting hit by a triple whammy, said UI education Professor Jennifer Delaney, who specializes in higher education finance.
Besides the potential cut in state support, some universities are seeing a drop in enrollment, which cuts into valuable tuition revenue, she said. While the numbers are up at the UI and ISU, among others, Eastern's enrollment has dropped from 12,000-plus as recently as 2008 to 8,520 last fall. Some of that was intentional, as the school wasn't designed for 12,000 students, said spokeswoman Vicki Woodard.
State dollars and tuition are the most flexible sources of income for schools, not dedicated to a particular grant, building or scholarship, Delaney said.
On top of that, Moody's and Standard & Poor's have downgraded bond ratings for the state's public universities, making it more expensive for them to borrow money if needed, she said.
"There are lots of signs that the outside financial market are looking at our public institutions and saying they are not as financially stable as they were last year," Delaney said.
The other fear is that the trend will feed on itself: students weighing an offer from an Illinois university may choose to go elsewhere because of the financial uncertainty, she said.
Illinois has a history of exporting college students to other states, and public fallout from the budget crisis could exacerbate the problem, ISU's Dietz said.
"Prospective students may very well say, 'Gee, other institutions in other states might have a bigger interest in us than our home state.' And that's a travesty," Dietz said.
IBHE head: Budget or not, rough road's around bend
If anything, the state needs more capacity in its universities to absorb adult learners from an under-educated work force who increasingly need college degrees to find jobs, Applegate said.
Faculty flight is another concern. Applegate said one search consultant told him Illinois is seen as "increasingly fertile ground" for recruiting top professors.
"The damage of this — in terms of the public perception of our system, student enrollment, recruiting talented faculty — this is damage that will not be immediately repaired by a budget," Applegate said.
"We'll take one if we can get one. But we're going to have to work hard to climb our way out of this hole over the next couple of years."
Applegate expects to see reductions in summer school offerings if something doesn't happen soon, and a day of reckoning will come at some point for all institutions, he said. The IBHE has recommended stabilizing higher education funding at 2015 levels "to right the ship."
"There's not an institution in the state that can live indefinitely without support from the state of Illinois," Western's Bierman said.
Bierman said he was buoyed by his most recent visit to Springfield on Wednesday, when legislators on both sides of the aisle affirmed their commitment to public higher education.
It was clear that public pressure was having an impact, he said.
"(When) we were there in January it was pretty depressing," he said. Now, "people are trying to help us and work some angles and get it figured out."