University of Illinois

Speeches and statements

Email to the University of Illinois community

October 28, 2008

To: Members of the University Community

From: B. Joseph White

Re: University Outlook

As you know, we have been experiencing a global financial crisis and weakening U.S. and Illinois economies.

I write to let you know what this may mean for the University of Illinois and how we are preparing for whatever financial conditions we could face in the months ahead.

My message is that we must be prepared for the possibility of reduced state support, some students and families struggling with tuition bills, difficult research grant and contract conditions, and reduced income from the University's endowment.

The U.S. and Illinois economies are weakening rapidly as evidenced by rising unemployment and other indicators. While the outlook is uncertain, we may be in the early stage of serious recessionary conditions.

Already we are seeing signs of difficult times with more likely to come. Most notable are weak state revenues and slow disbursements to state agencies, including the University, and a reduction in the value of the University's endowment that reflects the serious decline in U.S. and global equity markets.

Overall, the University is in a reasonable position financially to weather a difficult economic period. We have diversified revenue sources, some financial reserves, and a strong credit rating. We cannot, however, fully immunize ourselves from the painful effects of a severe recession, should one occur.

Experience has taught me that to deal with the effects of a recession wisely, we must plan for the worst while we hope for the best. That is exactly what University leaders — vice presidents, chancellors and provosts, deans and directors — are doing.

I have directed University leaders to prepare contingency plans for whatever financial hardships may come our way in the next six to 18 months. Immediately, we must save money by not filling many open jobs and by controlling expenditures of all kinds. Further action will be required if financial conditions worsen.

I expect to receive and review these plans in the next several weeks. We will then brief the Board of Trustees, faculty governance groups, and representatives of employee and student groups. While strong leadership is necessary to navigate a period of financial difficulty, the University is a family and we want all members of the family to be fully informed and involved as appropriate in determining how to manage through hard times.

I believe that three principles should guide our approach to dealing with tough financial times for the University:

• Protect the academic quality that has been built over many decades.
• Ensure students have access to the courses and programs they need and patients have access to the clinical health care on which they depend.
• Share in a thoughtful and fair way whatever sacrifices are required.

This is a good time to remember that we are the stewards of a great University that has experienced and successfully weathered nearly every challenge over its 140-year history: booms and busts, recessions and recoveries, wars and homecomings, turbulence and triumphs. Through it all, the University of Illinois has persevered and thrived. I assure you that this will again be the case in the present circumstances.

Thank you for your work and your membership in the University of Illinois community. We will keep you posted in the months ahead.