Killeen OK with proposed cut for UI as long as state gets budget

Killeen OK with proposed cut for UI as long as state gets budget

CHAMPAIGN — Lawmakers scrambling to put together a long-awaited budget deal this week have drafted several options that would cut the University of Illinois' annual appropriation by up to 10 percent; two would shift sizable pension or health care costs onto the school.

But any of them would be "good news" for the university, providing stability and stemming a rising tide of faculty departures, President Tim Killeen told faculty leaders Wednesday.

"We're beyond potential damage. We're into real bleeding," he said. "It's tourniquet time."

The UI isn't facing the same cash-flow problems as other state universities that are struggling to keep their doors open, UI leaders said during a meeting with the University Senates Conference, a UI faculty advisory group.

But the quality of the faculty is threatened by the budget impasse, which has sent only partial funding to the state's public universities for the past two years. The UI's last full state appropriation came in fiscal 2015, when it received $642 million.

The problem is "reputational damage and the uncertainty in the morale and the potential loss of real talent," Killeen said.

Professors who are top scholars are highly recruited, and "after two years of this, and going into year three, they're seriously reconsidering where their careers should be," Killeen said.

This is the time of year when professors decide whether to take offers from other schools or retention packages offered by the UI, Killeen said. Tepid salary growth, the threat of pension reform and potential cuts in health insurance benefits have prompted professors to look elsewhere.

Killeen declined to provide numbers or specific cases, though campus administrators noted an uptick the past couple of years.

"We've seen departures before, but they've been for other reasons or slightly influenced by the state," Killeen said after the meeting. "We're seeing evidence now of direct connection to the dysfunction on the state side."

'It's madness'

The problem isn't just the $750 million that the university hasn't received over the last two years, but the uncertainty that brings and the inability to plan, said Board of Trustees' Chairman Tim Koritz, who also spoke at Wednesday's meeting with faculty.

"I've heard that certain state employees basically aren't going to their doctors anymore because the state is so far behind on their payments that some clinics are demanding payment up front," said Koritz, who is a physician. "How does that sound, flying in the face of preventative medicine? It's madness. It's a totally unacceptable situation."

Killeen said the university is planning for three potential outcomes of the budget debate:

— A 10 percent funding cut relative to its fiscal 2015 appropriation and a shift of pension and health care costs to the university for its employees. He estimated that could amount to another cut of 6 percent to 10 percent.

— A 10 percent funding cut and a pension cost-shift, but not health insurance.

— A 5 percent cut relative to fiscal 2015, under the House Democratic plan announced Tuesday.

All three versions would restore full funding for fiscal 2017, though nothing for 2016, when universities received about a quarter of their usual appropriation. Lawmakers approved "bridge" funding last June totaling about $350 million for fiscal 2017, or 55 percent of the typical amount. The Democratic measure filed Tuesday would provide roughly another $300 million, said Vice President and Chief Financial Officer Walter Knorr.

All three plans would also fully fund the Monetary Award Program for need-based grants to college students, plus 10 percent growth, Killeen said.

'Vicious cycle'

Any of the options would be good news for the university, as they would provide stability and fend off another likely downgrading of the state's bond rating into junk-bond status, which could also hurt the UI, officials said.

That's one factor motivating lawmakers to reach a budget deal.

"There's clearly levels of frustration in Springfield," with each party blaming the other on various points, Killeen said. "I do think the pressure is so high there's a lot of impetus to a resolution. Another year like this would be very difficult."

There's been a lot of "finger-pointing," but it's the first time that "all sides are at the table and talking, so that's very good news," Executive Vice President Barbara Wilson told faculty members.

UI officials have engaged in a flurry of lobbying this week. Killeen was in Springfield on Monday, meeting with chiefs of staff for Gov. Bruce Rauner, House Speaker Michael Madigan and others. Wilson was scheduled to testify at a hearing Wednesday or today, and UI trustees planned to call legislators in the next two days as a "final push," Koritz said, citing Killeen's philosophy that the last person standing in the debate "is at the dinner table instead of on the menu."

Koritz also expressed concern for other Illinois public universities who are seeing enrollment declines because of the state's budget crisis.

"Less enrollment means less revenue. Less revenue means you have to cut programs, which possibly erodes your product, which means there's less interest in people attending," Koritz said. "So you get in this vicious cycle. It's happening all over the state."

While the UI's enrollment continues to climb, Koritz and many faculty members cited examples of talented Illinois high school students who are leaving the state for college because of cost, fears about Illinois' fiscal future and fierce recruiting by schools such as the University of Missouri, Iowa State University and Indiana University.

"We're hemorrhaging our greatest asset. We've got to turn this around," Koritz said.

Wilson and Killeen said the university is boosting efforts to offer financial aid packages to students, which is cited as the most common reason applicants turn down the UI's offer of admission.

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787 wrote on June 29, 2017 at 9:06 am

Looks like Tim Killeen's name can be added to the list of people, who Mike Madigan has successfully beaten into submission.

Sid Saltfork wrote on June 29, 2017 at 10:06 am

Some people need to read, and remember more.  Rauner pushed for the universities to accept the pension obligations, and later health insurance costs.  He pushed for administrative salary cuts.  He made cuts without replacing revenue.  He bears the majority of the blame for the statewide universities decline.  The U of I is fortunate compared to SIU, EIU, WIU, NIU, ISU, and the list of other universities.  They will be closing.  

All of this because of resisted tax increases.  Everyone with any intelligence knew that cuts, and a tax increase were necessary.  Rauner as governor is required to present a budget.  He has not done so yet. He put it on the legislature.  Now, he wants to complain, and veto instead of managing.  There is enough blame to go around both parties in Springfield.  However a no political experience, billionaire bought enough advertisements to get elected governor.  The next years before the next election will be the longest, most expensive ad market that the state has seen.  Two billionaires who have already started TV ads will dominate the air waves.

End the madness of left versus right.  Vote for Max Headroom for governor !!