Ill. payments to universities still lagging

Monday, October 18, 2010

The state of Illinois is close to finalizing reimbursement payments to public universities for the last budget year.
But with the academic year in full swing, the state must now start cutting away at the millions of dollars the universities have billed the state for this budget year.

Without timely reimbursements, university administrators and boards of trustees are having to execute cost-cutting measures to free up money.

Southern Illinois University President Glenn Poshard said his university’s board of trustees has approved of implementing up to six furlough days throughout the university system.

The state will finish paying off reimbursement payments for the last budget year in December, but would then have to start on more than $100 million in reimbursement payments for this budget year.

“Were backing up people ourselves that we owe money to, the vendors that do business with the university and so on, we’re stacking them out to 60 days or 90 days or however soon we can pay. And that has reverberations throughout the entire economy,” Poshard said.

Poshard added he and SIU-Carbondale Chancellor Rita Cheng have contacted public employee unions about the possibility of unpaid furlough days.

Public employee unions would have to approve of the furloughs before they could be implemented. Poshard did not indicate a deadline for finalizing the unpaid days.

Many of the universities have instituted other measures to try to avoid furloughs, including budget cuts, holds on new hires, and restrictions on expensive travel expenditures.

Dan Layzell, vice president of finance for Illinois State University, said the state has paid off all but $400,000 from the $85.1 million appropriated to the university last budget year.

He said that the state is far overshooting reimbursement deadlines typically associated with each budget year and that ISU has had to compensate.

“It’s more in terms of ... finding a predictable schedule in which we can receive payments from the state, regardless of what the fiscal year is,” he said.

Darcie Shinberger, a spokeswoman for Western Illinois University, said university administrators have asked all college heads to slice 3.5 percent from their annual budget for this budget year.

WIU administrators are hoping that move along with other measures will be enough to avoid layoffs and furloughs.

“It’s certainly unsettling when we ... look ahead and not know if we’re going to be reimbursed this week, next month, in six months,” she said.

Brad Hoey, a spokesman for Northern Illinois University, said administrators have made similar cost-cutting measures across each of its colleges.

“It’s hard to predict what the future holds, nobody’s in a good situation, but we may be a little bit more prepared for this situation because of our experience,” he said.

Late last budget year, lawmakers passed a borrowing measure that helped public universities such as Southern Illinois University meet payroll obligations.

Neither ISU nor WIU ended up implementing borrowing for the last budget year to free up cash. But Layzell and Shinberger both said the campuses were leaving the option open for this budget year.

Gov. Pat Quinn has proposed a one-percentage-point income tax increase to raise revenue for education, but that proposal has stalled in the General Assembly.

Illinois lawmakers may debate the tax increase proposal in November, when they typically consider the governor’s vetoes.

Poshard, a supporter of a tax increase, said higher education funding has been slipping downward for years.

“I would love to see us not be in a position where we have to raise taxes or didn’t have to make deep cuts ... but I don’t think this is a short-range problem. I think it’s going to take a number of years for the state to dig out of ... the situation that it’s in,” he said.