WIU budget suffers cut

Thursday, August 26, 2010

Western Illinois University's operating budget suffered a $3.7 million reduction for the 2011 fiscal year due to cutbacks in state funding.

The 3.7 million dollar cutback leaves Western with an operating budget of $56.2 million for this fiscal year, which started on July 1.

Governor Pat Quinn announced the state will reduce its expenditures to higher education in Illinois by $100 million on July 1 as part of an attempt to reduce the state deficit by $1.4 billion in the 2011 fiscal year.

A significant factor in Illinois' higher education cutback is due to the abatement of the federal stimulus funding, which was available for the state during the 2010 fiscal year.

"We'd like to see the federal government continue the stimulus program, that's what's basically been cut out of the budget stimulus program," said Republican Representative Rich Myers of McDonough County. "I think there's a possibility of some continuation of federal stimulus. I know the (federal) Congress is possibly going to extend the stimulus for some education to help the state out, but it's my understanding it's largely elementary and secondary (education)."

Furthermore, Gov. Quinn signed into law the Emergency Budget Act, which grants the governor broader control over state spending. Director of Government Relations for Western Illinois Dave Steelman stressed in July the act may have a detrimental effect on state appropriations to universities, stating "there could be additional reductions" due to the act.

Rep. Myers mentioned he was concerned with Gov. Quinn's new fiscal powers when the bill was enacted, but now believes Gov. Quinn will probably hold his commitment to higher education.

"I think he (Gov. Quinn) intends probably to hold his commitment to higher education," Myers said.

Although the University recently received a $10 million reimbursement for the 2010 fiscal year, the state still owes Western $6 million for last fiscal year. Budget Director Julie DeWees stated the state must pay the $6 million by December.

Additionally, the University has not received any payments from the state for its operating budget for this fiscal year.

Because of the state's shortfall in funding, Western will have to ration its spending even more.

"There's essentially going to be a rationing of FY'11 dollars because of the uncertainty," Steelman said.

"The idea was we need to exercise a lot of caution in FY'11 spending, so there will be reductions in travel, commodity purchases, office equipment, etc."

Western has only released 25 percent of its departments' FY'11 budgets for travel, commodities, equipment and other contractual departmental obligations, as revealed by University Relations on July 7. Furthermore, all spending has been limited to immediate operational needs only.

According to Steelman, President Al Goldfarb has made an effort to avoid furloughs and layoffs, but new hires will be limited.

"President Goldfarb has specifically stated his intent to avoid layoffs and/or furloughs," Steelman said. "Now in terms of new hires, there will be greater scrutiny. But for existing employees, we don't expect any cutbacks at this point."

Budget Director DeWees stated the University implementing furloughs and layoffs on its employees would be a worse-case scenario.

"That's the absolute worse-case scenario," said DeWees. "The only way that would ever happen is if they (the state) didn't pay us anything."

As for tuition hikes, tuition is expected to continue to rise for Western's future incoming students.

"Tuition increase was only 6.5 percent this year, so that's one of our priorities is to keep tuition increases as low as possible," DeWees said."That's one of our goals and we don't know what we'll have to do for next year, but in FY'10 we had a five percent increase, in FY'11 it was a 6.5 percent increase, so we try to keep it low."

The state government has allowed all of Illinois' universities, such as Western, to borrow from the state due to the state not providing adequate funding.

"It's not something we want to do," Steelman said. "It's all based on how much the Comptroller's Office or the state owes the University at the time, so the borrowing limit is a function of how much they owe us."

The renovations provided by the state, as seen with the $4 million renovation in Western's Quad-Cities campus, are a function of the University's capital budget, which is not to be confused with the University's operating budget.

"There's two different budgets," said President Al Goldfarb. "We have our operating budget which the state provides and then there's the capital budget that the state sometimes provides. The state has provided us with capital funds right now in terms of building projects to start building our new campus in the Quad Cities. What we're hoping is that this year they'll fund the start of the performing arts center that Western has been asking for since the 1970s. We haven't had any building on this campus built by the state since 1977, so we're hoping they'll release the money this year."

Meanwhile, Western and other universities will have to continue to borrow from the state to cover its operating budget. Because universities must borrow from the state, Steelman believes the recovery process is going to be even slower.

"It's just not going to be a matter of one fiscal year. If we borrow funds, we have to pay them back. So it's going to be a slow recovery process."