Wednesday, March 09, 2011

Universities wait on payments as they consider next year's budgets

By Jamey Dunn

As the presidents of Illinois’ universities face the possibility of flat budgets for the next fiscal year as a best-case scenario, some look to raise tuition, but others say they have reached a ceiling on what they can charge students.

William Perry, president of Eastern Illinois University, said if the school receives the same level of funding next fiscal year as it did during the current one, it could have to raise tuition. However, he said an increase would be a last resort. “We have to take a longer view. There’s the next fiscal year view, but we have to look longer term at the economy. We know that the issues of affordability and access are paramount in the minds of citizens [and] the parents of students,” he said.

Perry told a Senate budgeting committee that Eastern has cut operating costs by 25 percent in the last year and realized $1.6 million in savings. He said that like other universities in the state, the school has a hiring freeze, and he must approve all new hires. Perry said the freeze has resulted in about a reduction in faculty and staff of about 60 employees and saved the school more than $3 million. However, he said, since the university is a large economic driver in its area, the school is working to avoid layoffs, and he does not anticipate any in the near future. The state owes Eastern about $35 million in general revenue funds for the current fiscal year.

“Higher education is in an era of tremendous change and uncertainty. … The public university model of the 20th century no longer fits, so we have to make fundamental changes,” said John Peters, president of Northern Illinois University. Peters said if his school continues to increase tuition, it could price itself out of the market for higher education. He said asking students to pay more could block access to college educations for many young people from “working-class and middle-class” families, as well as those returning to school seeking training to reenter the workforce. Peters asked legislators to stop placing mandates on universities and start paying schools on time. Illinois currently owes Northern about $65 million. Peters said if the university does not get a payment, it will run out of money by April 15.

Al Goldfarb, president of Western Illinois University, agreed that mandates on universities and the state’s late payments have put pressure on his school.

“The biggest thing the state can do [to help universities plan their budgets] is predictability of state support,” he said. Illinois owes Western $50 million for the current fiscal year. He said the school has had to spend on maintenance with no help from the state because of last year’s cuts, which including deferring maintenance across all areas of state government. Gov. Pat Quinn called for increased capital spending in his fiscal year 2012 budget so the state can catch up on some of the repairs it has put off. Goldfarb said his school has also cut 25 percent from operating costs and has held off on hiring for about 60 jobs.

Goldfarb said Western asked for an increase in funding — as did many other schools. While he said he does not expect the school will get the money, he said it is important that legislatures recognize the needs of higher education. For instance, he said Western has seen an increased interest in the areas of nursing and engineering, so expansions are needed to meet that demand.

Al Bowman, president of Illinois State University, said his school also faces increased demand on its nursing programs and the high cost of upkeep. He said ISU asked for a more than 9 percent increase in funding for next fiscal year. “We understand that the state is not in a position to provide those kind of new resources, but we wanted to document what the real need was.” Without more state funding, Bowman predicted across-the-board tuition increases at state universities. “Unless the state begins to reinvest in higher education, we are going to be faced with — year in and year out — raising tuition to not only cover cost increases but to cover a greater proportion of the state’s share.”

For information on budget hearings for University of Illinois and Southern Illinois University, see Illinois Issues blog March 2.


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