UI happy to get back to work, even if new budget cuts its appropration 10%

UI happy to get back to work, even if new budget cuts its appropration 10%

URBANA — Ordinarily, a $60 million funding cut wouldn't be terribly good news.

But Thursday's approval of a budget deal in Springfield prompted a collective sigh of relief across the University of Illinois, where faculty departures were escalating and several major construction projects shut down July 1 — including the massive reconstruction of Green Street in front of the Illini Union.

"This was a very important day for us. We're very pleased with the vote and the fact that we now have a budget," UI President Tim Killeen said immediately after legislators narrowly overrode Gov. Bruce Rauner's veto of the $36 billion spending plan, which includes a $5 billion income tax increase.

"This feels to me a little bit like hands have been untied and we can move forward with our plans," Killeen said.

For the UI, the budget provides:

— About $583 million for fiscal 2018, which began July 1 — 10 percent less than its last full state appropriation in fiscal 2015 but still better than some scenarios had predicted, Killeen said.

— No retroactive funding for fiscal 2016, when the UI received about a quarter of its usual funding. That's roughly a $463 million hit.

— The balance of a full year's funding for fiscal 2017, or about $300 million for the UI. Public universities had previously received stopgap funding that covered half the year, and some were in danger of closing or losing accreditation.

— $40 million in Medicaid funding to support the UI's hospital and clinics in Chicago.

— No money for capital projects, but officials said the agreement should allow construction work to resume on projects halted when the fiscal year began with no budget.

— Full funding for need-based Monetary Award Program grants for both fiscal 2017 and 2018. Universities have been covering the cost for those students until the funding was released.

'An enormous relief to us'

The UI had prepared for a shift of pension and health care costs to the university for its employees, equal to another cut of 6 to 10 percent, but that wasn't part of the legislation approved Thursday. Killeen said he expects legislators to address pension reforms but wasn't sure of the timetable.

"Our concern there is that it not be a very rapid, disruptive, abrupt change, but that we find a way to make adjustments, to make sure our benefits and retirement packages are competitive," he said.

Killeen said the UI has effectively absorbed the $60 million cut for fiscal 2018 through its cost-cutting efforts over the past two years, particularly on the administrative side, where a "soft" hiring freeze was imposed and some offices reorganized. That has "inoculated us against the shock of a 10 percent reduction," he said.

"We should be able to accommodate those reductions," agreed Paul Ellinger, vice provost for budget and resource planning for the Urbana campus.

The $463 million loss from fiscal 2016 is a different matter, Killeen said. He planned to meet today with the chancellors and provosts of the three UI campuses to discuss how the new budget will affect spending plans for the coming year. They will also discuss whether to continue hiring constraints, he said.

He said the UI wouldn't rush to increase spending but can now fill gaps in faculty ranks that are "mission critical."

The biggest worry about a third year with no budget was not cash flow but the hit to the UI's reputation and its ability to recruit and keep top faculty, administrators said.

"It creates a lot of uncertainty about what the future is of the state and the university. I think that was widespread across campus," Ellinger said.

"We've been flagging this all along," Killeen said, "but that situation had become significantly worse in the last month or two. That's going to be an enormous relief to us."

Ellinger said the campus has tried to be proactive in its budget planning, combining a series of carefully targeted spending cuts over the past two years with reorganization and "strategic investments" in new and high-demand areas that can generate more tuition income and other revenue, such as online programs.

"We realize we can't do all this through cutting costs," he said. "You build your reputation in drops and you lose it in buckets."

'The start of a long road'

For the coming school year, academic units have already been asked for cuts averaging 2 percent, which will remain in place, he said.

Not getting the money for fiscal 2017 would have cut further into reserve funds held by the campus and colleges, much of it used to recruit new faculty or offer retention packages to those considering other offers, Ellinger said.

The uncertainty of the budget standoff forced the campus to be more cautious in its long-term planning and also put hundreds of deferred-maintenance projects on hold, he said.

Killeen had closely monitored developments Thursday from his office in Urbana. He praised the bipartisan effort to end the two-year-old budget impasse, noting that the votes were difficult for lawmakers.

In particular he thanked local legislators from both parties who have been "stalwartly supporting public higher education" and supported the plan, including Democrats Sen. Scott Bennett of Champaign and Rep. Carol Ammons of Urbana as well as Republican Rep. Chad Hays of Catlin, one of about a dozen GOP lawmakers who went against the governor so that the state didn't descend into "junk bond" status.

"Obviously, this is the start of a long road to bring the state back," Killeen said.

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kiel wrote on July 07, 2017 at 8:07 am

Faculty are still going to leave. Quality hires are still going to shy away from this dysfunctional state. Processing of all paperwork -- from student petitions to reimbursements to purchases to contracts/grants -- will continue to be slowed to the point that they are not worth the time/trouble. Buckets upon buckets of reputation have been lost, and they will not soon be refilled.

cjw61822@hotmail.com wrote on July 07, 2017 at 1:07 pm

Budget cut, but we can ask for a new vice chancellor for diversity at a cost of 180k a year................