Western Illinois U. will experience a 6.2 percent reduction in its appropriated budget due to the Illinois state government trying to reduce its deficit.
The reduction cuts back approximately $3.5 million from Western’s budget and leaves the University with $56.2 million.
Governor Pat Quinn announced the state will reduce its expenditures to higher education in Illinois by $100 million on July 1 as part of an attempt to reduce the state deficit by $1.4 billion in the 2011 fiscal year.
A significant factor in Illinois’ higher education cutback is due to the abatement of the federal stimulus funding, which was only available for the state during the 2010 fiscal year.
“A part of the $100 million cutback for all the universities, that essentially was comprised of the federal stimulus money that went into the FY 2010 budget. That was a one-year shot and that was eliminated,” said Director of Government Relations Dave Steelman of Western Illinois.
Western is further hampered with the presence of uncertainty.
Gov. Quinn signed into law the Emergency Budget Act, which grants the governor broader control over state spending. This act may have a detrimental effect on state appropriations to universities as state spending is even more determined by his administration.
“The other thing that has us concerned is one of the bills that passed this recent session, the Emergency Budget Act which gave Gov. Quinn significant powers in terms of the state budget including a reserve,” Steelman said. “Basically what it means is that at any point during the remainder of the fiscal year, there could be additional reductions as part of that reserve.”
Furthermore, the state currently owes the University $17 million for the 2010 fiscal year.
Because of the state’s shortfall in funding for the last fiscal year along with possible cutbacks in the near future, Western will have to ration its spending even more.
“There’s essentially going to be a rationing of FY’11 dollars because of the uncertainty,” said Steelman. “The idea was we need to exercise a lot of caution in FY’11 spending, so there will be reductions in travel, commodity purchases, office equipment, etc.”
Western has only released 25 percent of its departments’ FY’11 budgets for travel, commodities, equipment and other contractual departmental obligations, as stated by University Relations on July 7. Furthermore, all spending has been limited to immediate operational needs only.
According to Steelman, University president Al Goldfarb has made an effort to avoid furloughs and layoffs, but new hires will be limited.
“President Goldfarb has specifically stated his intent to avoid layoffs and/or furloughs,” Steelman said. “Now in terms of new hires, there will be greater scrutiny. But for existing employees, we don’t expect any cutbacks at this point.”
Tuition may rise for future incoming freshmen only if further reductions are made by the state as well.
“If the governor or the state legislature cut back too far in the area of higher education spending, we don’t have any other option other than to raise the tuition,” said Steelman. “I think by and large the universities have tried very hard to keep tuition increases down, but the fact is that state support levels for higher education have decreased dramatically over the past few years.”
The state government has allowed all of Illinois’ universities, such as Western, to borrow from the state due to the state not providing adequate funding, where it has fallen short $17 million for the University for the 2010 fiscal year.
“It’s not something we want to do,” Steelman said. “It’s all based on how much the Comptroller’s Office or the state owes the University at the time, so the borrowing limit is a function of how much they owe us.”
Western may borrow up to 75 percent of the $17 million owed by the state for the 2010 fiscal year, according to Steelman.
Because Western and other universities have to borrow from the state to cover its payments, Steelman believes the recovery process is going to be even slower for the state and its universities.
“It’s just not going to be a matter of one fiscal year,” said Steelman. “If we borrow funds, we have to pay them back. So it’s going to be a slow recovery process.”
The lack of funding by the state has also become a drag on the state’s ability to currently provide proper funding for its pension systems for all of its employees, which includes university employees.
“The problem exists virtually with all of the pension systems in the state of Illinois,” Steelman said. “What essentially has happened for one reason or another, the state hasn’t fully funded those pension systems. They’ve put off funding for later dates and the gap in the availability in pension funding and what’s due has continued to grow throughout the years, and we’re at a point where it’s threatening the entire state budget. The debt is several billion dollars that the state needs to make up to fully fund all the pension systems. I think that’s going to continue to be a problem.”
Although positive indications have been made by the state in maintaining its backing for higher education as seen with the continuation of the Monetary Award Program for students in the 2011 fiscal year, much uncertainty still persists for all of Illinois’ universities.
“I know people aren’t going to be happy about the university’s budget or the state’s budget, no one is. I’m certainly not,” said Steelman. “But the operative word for all of us is uncertainty and because of the uncertainty, it’s difficult to plan, it certainly has a negative impact on budgeting. I just hope people are aware of why this is happening.”