Proposal would tap riverboat revenues for education

By Ed Tate
UIC News Bureau

Gov. Jim Edgar hopes to hike taxes on riverboat casinos to give the state's
schools and universities a healthy financial boost for the fiscal year
starting in July, but the tax plan faces strong opposition from gambling
industry leaders.

At last week's monthly meeting of the UI Board of Trustees, held at the
Rockford campus, President James Stukel praised the proposal, which would
raise the university's appropriation by 4.3 percent, calling it a
"student-oriented budget."

The extra $34.5 million for the UI is well below the $51.7 million increase
the university requested but it's a major share of the $112 million hike
for higher education.

The governor proposes to raise some of that money by changing the basic
levy on riverboat casinos from a flat tax to a graduated one, producing $67
million more than this year.

Stukel pointed out that one-third of that increase to higher education will
go to student financial aid, another third to universities' operating
budgets and the remaining third to help address the underfunding of the
State Universities Retirement System.

The UI's capital budget request is still caught in "gridlock" due to a
political battle over the state's bond funding, Stukel said. The UI's
internal reallocation process must continue, he said, so that funds are
available to provide sufficiently competitive salary increases for faculty
and staff members. Gov. Edgar's spending plan includes pay hikes of 3
percent.

Kirk Hard, associate president for governmental relations, said the
university is "generally encouraged" about the budget and especially so
because the governor recommended the increase it contains. He said Stukel
will testify before the Senate Appropriations Committee March 27 and the
House's counterpart in April.

Stukel reported to the board that Gov. Edgar's recent visit to the
Urbana-Champaign campus was successful, particularly his tour of the
National Center for Supercomputing Applications. There he saw a
demonstration of the virtual-reality immersion system known as the "CAVE,"
which was invented at UIC. The president said that the governor was so
enthralled by the experience that, when his campus tour ended slightly
ahead of schedule, he had his hosts take him back to the CAVE.

Utility Corporation
--------------------
Though Craig Bazzani, UI vice president for business and finance, said, "We
don't choose to become a utility," he recommended to trustees - and they
approved - establishing a not-for-profit corporation to purchase
electricity directly from various suppliers, most likely competitors of
Commomwealth Edison and Illinois Power, which currently serve the
university and most of the state.

Stukel called the plan, which is permissible due to federal deregulation of
the industry, a "very good and very creative proposal."

Officials estimate that it could cut in half the university's rate for
electricity. Last year the UI paid nearly $26 million for electricity.

Bazzani said that forming the corporation is something "no one else in the
country has done," and he stressed that money saved on energy can be
applied to academics.

The board was swayed by the success of two university energy-related
ventures. A natural gas power plant at UIC, which generates both heat and
electricity, is saving more than $2.3 million annually while paying for
itself in just seven years.

Construction of a 19-mile pipeline from Urbana to Monticello has allowed
the UI to buy natural gas directly from the wellhead, saving more than $1
million annually since 1980. And last year the UI used a bond issuance to
finance a bulk purchase of natural gas at especially low rates, which saved
$1.2 million last month alone.

Athletics at UIUC
-------------------
Through cost-cutting and fund-raising, UI Athletic Director Ron Guenther
has erased the $1 million deficit he inherited, Chancellor Michael Aiken
reported to trustees. Still, Aiken said, the athletic department has a
"very precarious budget," with the income generated by football and
basketball subsidizing the other sports. One poorfootball season, he said,
particularly if that meant no bowl game, could result in more red ink.

Adding to fiscal challenges, a women's soccer team will start play next
fall, costing about $350,000 annually. Bazzani pointed out that it would be
difficult to make further cuts in UIUC's intercollegiate sports. Along with
Purdue and Northwestern, Urbana ranks last in the Big Ten with 17 sports,
while leader Ohio State has 34, with Michigan and Penn State having about
the same.

Capital Projects
-----------------
At last week's meeting, trustees approved funds for a variety of capital
projects, among them:

 *  $3.75 million to remodel the second floor of the Illinois State
    Psychiatric Institute to house a new Neurobiology Sciences Laboratory
    at UIC.
 *  $1.1 million to upgrade electrical systems in the 46-year-old Medical
    Center District Steam Plant.
 *  591,300 to replace windows at UIUC's Illinois Street Residence Halls.
 *  553,500 for repairs to the deck and landscaping for UIC's
    Administrative Office Building.

The board agreed to hire a Chicago architecture firm for a $1.9 million
remodeling project in the College of Dentistry building to develop a
Craniofacial Center.

UIC Medical Center
-------------------
During last week's meeting, the board was told that the proposal to build a
$60 million ambulatory care facility at the UIC Medical Center is "headed
in a positive direction."

That assessment came from Sam Vinson, a consultant the university hired
after the state's Health Facilities Planning Board initially indicated that
it might not grant the necessary "certificate of need" for the building.
Vinson reported that a recent meeting with board staff resolved some
problems and said the UIC project is on the board's April meeting agenda.

Student Health Insurance
-------------------------
The Board of Trustees approved the student health insurances fee, including
an increase from $174 to $206 per semester at UIC to cover improvements
that officials said were requested by students.

At Urbana, the fee remains $126, though the Blue Cross/Blue Shield coverage
will be enhanced to provide better deductibles and annual and lifetime
limits along with improved services such as outpatient psychiatric and
diagnostics.

It was noted that Urbana officials have requested proposals for dental
insurance for graduate students, which could cost the university about
$500,000.

In other business, the board approved the appointment of Katharine J. Kral
as assistant vice president for business and finance. Kral replaces L. Rea
Jones who recently retired. Kral has served in various capacities with the
university business office at both the Chicago and Urbana campuses for more
than 17 years. In her new position, Kral will serve on Chancellor Aiken's
cabinet.