PUBLICATIONS Inside Illinois Vol. 25, No. 20, May 18, 2006

In spite of increased state funding, UI still faces tough decisions

By Sharita Forrest, Assistant Editor
217-244-1072; slforres@uiuc.edu

For the first time in five years, the UI will receive an increase in its base operating budget appropriation from the state of Illinois. On May 4, the General Assembly approved a fiscal year 2007 budget that gave the UI a 1.8 percent increase over its fiscal year 2006 funding, increasing the UI’s general revenue fund by $12.5 million to $710.6 million.

Including employee pension and health-care benefits, the state is the university’s single largest funding source, providing more than $1 billion of the university’s $3.6 billion annual operating budget.

UI President B. Joseph White said the funding increase for the UI and other state universities affirmed the importance of higher education in Illinois.

“The University of Illinois is the state’s most valuable asset to the people of our state to have a prosperous future,” White said in a May 5 news release about the state budget. “I am grateful for the leadership of the governor and the Legislature in helping with the resources to achieve continued academic excellence and affordable education for nearly 70,000 Illinois students.”

The UI’s appropriation included $2.4 million for new initiatives, such as $500,000 for the Library Digitalization Project, a program aimed at preserving and promoting access to materials through multimedia and network technology; $350,000 for the Dixon Springs Agricultural Center; and $300,000 for campus-based work force development programs. As part of the state’s economic development grant program, IllinoisVENTURES, the UI’s technology commercialization company, will receive $750,000.

The Council on Food and Agricultural Research, which is based in Urbana and supports research and outreach projects related to the state’s food and agriculture industries, also received a $1 million increase in its grant funding to $4.5 million.

The state’s FY07 budget also contained the second year of the state’s “pension holiday,” which reduced contributions to state retirement programs by $1.1 billion for FY07 and $1.2 billion during FY06.

For the third consecutive year, no appropriations for new capital projects were provided statewide. University officials had requested a capital budget of $335 million to fund repairs and renovations at all three campuses and projects, including the remodeling of Lincoln Hall and the relocation of the South Farms research centers at Urbana.

Even with the additional appropriations, UI officials will be faced with tough decisions, such as how to cover an expected $11.14 million of cost increases for utilities, Medicare payroll taxes and information technology; an additional $3.4 million to operate and maintain new facilities, such as the recently opened Alumni Center, the Institute for Genomic Biology Building, the Micro and Nanotechnology Laboratory addition and the State Natural History Survey Building, all at Urbana; as well as salary and benefit increases for faculty and staff members.

“While the increase in the university’s appropriations is a significant step forward … there will still be significant reallocations to achieve university priorities,” said W. Randall Kangas, assistant vice president in the Office for Planning and Budgeting.

Tuition and fee increases that the UI Board of Trustees approved in April are expected to bring in $16.3 million of new revenue to the Urbana campus during FY07. With special tuition differentials and enrollment adjustments, the Urbana campus will receive another $9.7 million.

The Academic Facilities Maintenance Fund Assessment, which the trustees also approved in April and will be phased in over four years to help the university address a $617 million backlog in deferred maintenance projects at the three campuses, is expected to generate about $4 million for repairs and renovations at the Urbana campus during FY07, Kangas said.

State lawmakers approved an additional $7.6 million in appropriations for the Monetary Award Program, the state’s need-based financial aid program, and added $26.8 million to the MAP from a special state fund. The MAP was expanded by establishing the Monetary Award Plus, a $34.4 million program that will give grants of up to $500 to sophomores, juniors and seniors whose families earn too much to qualify for need-based MAP grants but less than $200,000 a year.

The special MAP state fund and MAP Plus probably will be funded by selling the Illinois Student Assistance Commission’s loan portfolio, a move supported by public university officials but criticized by Illinois Student Government, state Rep. Naomi Jakobsson and others who contend that privatizing the loan system will increase students’ debt and diminish outreach services.

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