University details effects of state budget impasse

After hearing the impact of the state budget impasse on the University of Illinois, trustees signed a poster-sized version of a resolution Thursday that will be sent to Gov. Bruce Rauner, urging an end to the stalemate.

“The state of Illinois needs us to be world class. We cannot go down a path to deterioration,” said President Timothy Killeen.

Like other state agencies, Illinois public universities have not received state funding for the current fiscal year, which began July 1, because the governor and General Assembly have not passed a new budget.

The impasse affects university programs, student financial aid, building renovation projects and reimbursement for care provided by UI Health, university leaders told trustees.

The legislative version of the state budget — most of it vetoed by Rauner in June — called for a $57 million reduction in funding to the university. In Rauner’s budget address in February, he had proposed a $209 million cut.

The university is continuing its advocacy efforts in Springfield, meeting with Rauner and other legislative leaders multiple times, said President Timothy Killeen.

“We have a world-class institution to protect and defend,” Killeen said.

University hopes for resolution by January

Killeen said university leaders are optimistic that the impasse will be resolved “in the January time frame.”

“When that happens, we will be in better shape to carry on our FY16 activities and reduce the level of consternation and anxiety that’s clearly there,” he said.

The university recently received the remainder of its fiscal year 2015 state appropriation, said Walter Knorr, university vice president and chief financial officer and comptroller.

But with no state funding for FY16 midway through the year, “we’re certainly in uncharted territory,” Knorr said.

The university is meeting payroll for employees using existing university funds. “We continue to eat into our reserve funds as we make those payments,” he said.

The university is covering this year’s financial aid grants from the Monetary Award Program to about 8,000 students at UIC, 7,000 at the Urbana campus and 800 at UIS, with the expectation that state funding will be available once the budget is passed.

“MAP is a contract between the state and the students and their parents,” Knorr said. “We are essentially the custodian to make this happen.”

The budget stalemate has stalled university renovation and construction projects.

“We are able to move some along with some of our own dollars, but all of the state projects have stopped,” Knorr said.

Medicaid fund drained

Because of the budget stalemate, the state fund that pays for care to patients who receive Medicaid is nearly empty, Knorr said. UI Health provides care for more than 73,000 Medicaid-eligible patients each year.
“The exhaustion of the Medicaid trust fund is a big concern going forward,” he said. “It’s critical to keep the hospital and its clinics viable. It’s at the top of our list.”

Knorr said until a state budget is passed, it will be difficult to make a decision on tuition for 2016-17. Since 2012, trustees have set tuition for the next year in January to make planning easier for students and parents.

“Tuition decision timing could be in limbo without some type of definitive state budget situation,” Knorr said.
Danilo Erricolo, UIC professor of electrical and computer engineering, presented a report on behalf of the University Senates Conference’s finance, budgets and benefits committee.

Faculty members are concerned about the budget stalemate’s impact on research competitiveness and ability to attract diverse students, he said.

“MAP awards are among the very few tools for making higher education available more equitably and making our student body diverse,” Erricolo said.

In other business

• Trustees approved a request by Killeen to eliminate a deferred compensation clause in his contract that would have given him $225,000 if he stayed in his position five years.

•The board approved the appointment of Robert A. Barish as UIC’s vice chancellor for health affairs. Barish, chancellor of the Louisiana State University Health Sciences Center in Shreveport, will oversee all academic and clinical programs. He joins UIC Jan. 1.

• The board approved a settlement to end legal claims between the University of Illinois and Steven Salaita after a 14-month employment dispute. The case arose after Salaita, a former Virginia Tech university professor, made statements on social media about conflicts in the Middle East while he had a pending faculty job offer at the Urbana campus. The university exercised its option not to hire Salaita and he sued, alleging breach of contract and violation of free speech. Under terms of the settlement, Salaita will receive a $600,000 payment and legal costs; he will not be hired by, or seek employment at, the university. Salaita will dismiss legal claims against the university in federal and state courts.

• Trustees presented a distinguished service medallion to former university trustee Roger Plummer. Plummer, a 1964 graduate of the College of Engineering at the Urbana campus and an executive in the telecommunications industry, has served the university for more than 50 years, including almost 10 years as trustee.

“Roger Plummer is not a joiner; Roger Plummer is a doer,” said board chair Edward McMillan.

“I can’t tell you how much this means to me,” said Plummer, former chairman of the board of the University of Illinois Foundation. “I can never give enough to this institution.”