Trustees discuss possible budget shortfall for FY 2009
The university is preparing for the repercussions of a state budget revenue shortfall by planning for a rescission in the current fiscal year, Walter Knorr, chief financial officer and university vice president, told the UI Board of Trustees on Jan. 15 in Chicago.
With the nation in an economic recession, the state is projecting a $2.1 billion budget shortfall for fiscal year 2009, Knorr said.
State payments to the university are running about 90 to 120 days behind schedule, he added.
“Certainly, the state has been reacting to the shortfall with their cash flow,” said Knorr.
In October, UI President B. Joseph White told university leaders to prepare a budget plan for the next six to 18 months, asking them to try to “protect academic quality, serve students well and minimize adverse impact on university employees.”
“Senior leadership of the university has been working on a plan for what could be a difficult remainder of FY09 and what could be a very difficult FY10,” he said.
The Illinois Board of Higher Education directed UI administrators to hold 2.5 percent, or $18.6 million, of the university’s state appropriation in reserve, Knorr said.
But elected officials in Springfield could require state agencies, including public universities, to reduce their budgets much more, depending on the fiscal condition of the state.
In December, all three UI campuses announced cutbacks that included filling only essential campus personnel positions and delaying nonessential expenditures for equipment and travel.
University administrators also made plans for a rescission as high as 10 percent, or $74.3 million, Knorr said. In addition to holding open vacant positions and reducing nonessential spending, the plan would use $20 million set aside last summer as a cash contingency, as well as unspent cash balances.
The plan seeks to minimize impact on university personnel, he said.
At the meeting, trustees approved increases to next year’s student fees and housing rates to meet operational costs.
Student fees will increase $71 per semester at Urbana (up 5.5 percent), $39 per semester at UIC and $107 per semester at UIS.
Housing costs, based on a standard double room and meal plan, will increase $243 per semester at Urbana, an increase of 5.9 percent. UIC’s housing rates will rise by $338 a semester, and UIS students will see a $180 increase. Tuition rates for FY10 may be brought to the board for discussion at its March 11 meeting in Urbana.
“We’ll be facing, as early as March, critical tuition decisions for what we’re going to do for FY10, and that’s going to be a real challenge in this environment,” Knorr said.
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