University of Illinois

In fiscal year 2010 (July 1, 2009 — June 30,  2010) with the economy still weak, the University of Illinois continued the conservative approach to spending used in FY 2009. Seven months (Jan. 31, 2010) into the 2010 fiscal year, the University had received $132 million of its expected $563 million general revenue funds from the state.

Released in March 2009, Gov. Quinn’s budget proposal for fiscal 2010 general revenue funds for the University of Illinois was $743.4 million, level with the University’s fiscal 2009 state operating revenue. In July, the Legislature passed the budget. The budget included reinstating the 2009 operating funds rescission of 2.5 percent ($18.7 million). Maintaining funding equal to 2009 in a difficult state economy was made possible by a one-time $45.5 million in federal stimulus funds.

The budget includes the first significant capital bill in six years bill: $31 billion for the state, $255.7 million for the U of I. It includes a capital program for renovation and major building projects on all three campuses. Funding is still being arranged.

At the November 2009 meeting the board approved a preliminary fiscal 2011 (July 1, 2010 to June 30, 2011) state budget request for operating and capital funds. The University seeks $96.7 million, a 6.4 percent increase in operating funds from the state to help hold down tuition increases and maintain the quality of the University. The request also proposes to secure in the operating budget funds for facilities maintenance as well as funds to meet operating and cost increases.

Fiscal year 2011 appears very challenging. The state of Illinois has a budget deficit of between $11 and $15 billion and a $3.2 billion backlog of unpaid bills and $2.3 billion in short-term borrowing. Medicare costs will likely increase. The state is borrowing to cover unfunded state pension liabilities. It is unlikely that federal stimulus funds will be available in fiscal 2011.

2010 Actions

In January 2010, President Ikenberry announced the implementation of a furlough program and other cost-saving measures. In addition to furloughs, travel limits, strict controls on new hires, and sustainability initiatives, first announced in late 2008, are still in place to help the University and the campuses weather current and anticipated financial challenges. University staff are currently working on plans to reduce non-academic administrative costs to focus resources on academic and strategic priorities.

The Board of Trustees at its regular January meeting in Chicago heard a presentation by Craig Bazzani, the U of I Foundation’s senior adviser for foundation advancement, and Avijit Ghosh, the University’s vice president of technology and economic development. They are co-chairing the Administrative Review and Restructuring Working Group with representatives from University Administration and the three campuses.

The working group’s broad presidential charge is a comprehensive review of the University’s administration and operation at all levels. Over the next 12-18 months, the working group will develop a series of action steps to improve performance and reduce costs. Specific areas that the working group is considering are information technology, purchasing and consolidation of administrative support services. The working group will report back to the trustees at the May 2010 meeting.

Looking to the Future

The Board of Trustees, President Stanley O. Ikenberry and University leadership remain committed to protecting academic quality, serving well the University’s students and others who depend upon the services and resources of the institution and minimizing adverse effects on faculty and staff.

Feb 2, 2010