The Pantagraph

Universities mostly take a pass on borrowing money

Thursday, September 09, 2010

SPRINGFIELD -- Earlier this year, Illinois universities fought for months for the authority to borrow money to pay their bills.

But so far, the state schools largely haven't needed to take out loans.

Though the state remains far behind in paying its bills, universities received most of the state money they have been expecting over the summer. Their budget situations became a little less dire when that happened.

"We thought June and July were going to be very difficult for us," said Southern Illinois University spokesman Dave Gross said.

SIU used legislation approved this year to establish a line of credit it can use later this year if its finances get dicey again.

Some other schools avoided borrowing altogether. Eastern Illinois University officials said they could avoid borrowing because the state finally came through with most of their money.

Illinois State University spokesman Jay Groves said the school doesn't have much debt and has been able to get by.

"We've planned very well and spent very prudently," Groves said.

But now some schools are already looking toward the financial trouble they may have in the future.

While Illinois universities have been given most of their state money for the fiscal year that ended in June, they haven't received any for the year that's already three months old.

That means universities will almost certainly be in a tight spot once again.

Gross says that when lawmakers return to Springfield in November, SIU will probably ask for new legislation that lets them borrow money next year.

Mike Baumgartner, executive deputy director of the Illinois Board of Higher Education, said universities might again have to go through long periods of getting no money for the state. So the schools might have a need to borrow again.
"I would expect that we would support that," Baumgartner said.