PUBLICATIONS Inside Illinois Vol. 21, No. 2, July 19, 2001

UI looks for 8 percent increase in state funds for 2003
One proposal would cut employee SURS contribution and increase state’s responsibility

Craig Chamberlain, News Bureau Staff Writer
(217) 333-2894; cdchambe@illinois.edu

UI administrators are planning to ask for an increase of almost 8 percent in state operating funds for the 2003 fiscal year, which starts next July.

The request is warranted, said Chester S. Gardner, UI vice president for academic affairs, to meet a variety of university needs, among them an ongoing need to improve salaries and benefits.

Gardner’s comments came as part of a preliminary review of budget issues at the July 12 meeting of the UI Board of Trustees in Urbana. The final budget request will be presented and approved at the September board meeting.

About half of the $85.6 million projected increase, or about $43 million, would go toward "continuing components," Gardner said.

Among those components is compensation, where the university plans to ask for a 3 percent increase for salaries, and another 1 percent increase for recruiting and retaining key faculty members.

Yet another 1 percent would go toward replacing part of the contribution that most UI employees pay into the State Universities Retirement System (SURS), in effect giving those employees an additional 1-percent increase in salary.

If approved by the state, it would be the first year in a four-year plan to cut in half the employee contribution into the SURS system, shifting that responsibility to the state, Gardner said.

Currently, employees paying into the SURS system are required to contribute 8 percent of their salaries, which is matched by 8 percent from the state. Under the plan, that balance would be shifted toward the state by 1 percentage point each year for four years. This would result in employees then contributing only 4 percent, matched by 12 percent from the state.

"Our faculty have been lobbying for a number of years for an improvement in benefits, and we feel this is an excellent way to begin that," Gardner said. Employees would see the same amount of money go toward their retirement, but with a 4 percent overall increase in pay.

In comments after the meeting, Gardner noted that there was precedent for the plan. The 4-to-12 contribution formula is the one used by the State Employees Retirement System (SERS), he said. "What we are proposing is to move the State Universities Retirement System in this same direction."

Also under the category of continuing components, the university is proposing a 3 percent increase for general costs, 4 percent for utilities costs, and 5 percent for the library.

At the top of the university’s request in other areas for operating funds is $16 million for a major remodeling fund. Another $2 million is being requested for continuing work on UI-Integrate, the project to update and integrate various administrative database and computer systems.

In the university’s capital funds request, the current plan is to ask for $95.6 million from the Illinois VentureTECH program for various building projects tied to economic development. Another $79.0 million would be requested in the regular capital budget, and $25 million to finish the College of Medicine building at UIC.

One major item not yet incorporated into the budget concerns medical malpractice insurance, and Craig S. Bazzani, UI vice president for administration, spent several minutes at the board meeting explaining how recent developments have significantly increased the university’s costs in that area.

Even with a change of insurance providers, the university will be paying significantly more this year for the same coverage, Bazzani explained. Last year’s total cost was $14.5 million, and this year’s will be $23 million.
As a result, "what we once thought was a budget in balance now looks a little sideways," he said.

In other actions, the board convened as the sole member of the UIHMO, and with no discussion quickly voted the HMO out of existence.