EDWARDSVILLE — Despite the General Assembly’s passage on Thursday of a plan to fund higher education, concerns remain about the effects of the yearlong budget impasse on Illinois colleges and universities.
According to Reuters, the deal provided $50 billion to fund colleges, universities, social services, capital projects and other state functions for six months starting Friday. Illinois is the only state in 80 years to go an entire year without a budget.
School years across the state ended in May, with many school leaders nervous about what they will return to in the fall. Institutions received no money from the state from July 2015 until late April 2016, when they received a fraction of the promised funds.
“We’ve never faced anything like this before,” Southern Illinois University Edwardsville Interim Chancellor Stephen Hansen said. “Historically, we have had cutbacks, but we’ve never been without a budget. We’ve never had to deal with a nearly 100 percent cut.”
SIUE receives approximately $60 million annually in state funding, most of which goes to instructional costs. That $60 million accounts for approximately 24 percent of the university’s budget.
Without the promised state funding, SIU Edwardsville has pulled money from other areas. For legal reasons, money allocated to one area, such as athletics, cannot be used to pay for other purposes, like instruction. As a Band-Aid, SIUE has borrowed money from other areas of its budget to cover the lack of state money.
“What we’ve done is borrowed this money in order to fund instruction, and we’re going to have to pay all that back eventually,” Hansen said.
Although it has borrowed, the university still has had to make cuts. In February, it eliminated men’s tennis and women’s golf, reduced funding for research and public service centers such as the Center for Science, Technology, Engineering, and Mathematics and the East St. Louis Center, and has trimmed other services such as lawn care.
On top of the continuous juggling act, the area has seen a growing number of faculty and students flee the state in search of a more secure financial environment, making recruiting more difficult.
The state also is no longer paying for the Monetary Award Program, which provides grants to students who demonstrate significant financial need. Without the money from these MAP grants, many of these students would not be able to attend college.
Since the state has not been providing this assistance, some schools have been forced to take the burden upon themselves.
“We’re carrying that debt,” Hansen said. “We’re paying for it in the hope that the state of Illinois is going to eventually reimburse us.”
On a smaller scale, the budget impasse means the state is no longer paying the health insurance of employees in higher education, which Hansen called “one of the most devastating impacts of not having a budget.” Because the state is not reimbursing health care providers, university employees have been turned away from receiving medical care unless they pay out of pocket.
“We’re so thankful for the doctors, the hospitals and the medical clinics that are still honoring our insurance and carrying that debt, because the state of Illinois isn’t reimbursing them,” Hansen said.
Impact on community colleges
Although they receive money from property taxes that public universities do not, community colleges also have felt the effects of the budget impasse.
Lewis and Clark Community College in Godfrey, which receives approximately 16.5 percent of its budget from the state, is no different.
“The state hasn’t declared itself in terms of what it’s going to do for the next fiscal year,” LCCC President Dale Chapman said. “The school has to submit a final budget in July, but the impasse makes it a challenging budget environment.”
LCCC has continued operating through careful budgeting. Chapman said the college cut more than $1 million from its budget. It has also reduced next year’s budget by 8.5 percent.
He said part of the problem is some politicians’ perceptions of places like community colleges.
“We get lumped in with the ‘tax eaters,’ but the truth of the matter is we are a tax contributor,” he said. “For the money we get, which is $8 million, we put $338 million a year into the area economy. That’s about 6 percent of the gross domestic product of our region.”
Chapman also pointed out that community college graduates often stay in the area and contribute to the economy.
“These are area residents that want to stay here, buy houses, buy cars, raise families and go to school and contribute to the cultural and economic well-being of our region,” he said.
Not just surviving
Facing a frustrating situation, SIUE still has weathered this storm better than many public institutions.
“SIU Edwardsville has been in a strong position in the careful management of our resources and our commitment to our students and the quality of our programs,” Hansen said. “I think we haven’t just survived; so far, we’ve been thriving in a lot of ways.”
Part of that careful management came in October, when the school expected budget cuts from the state and took pre-emptive measures by adjusting its budget.
“We put in a 9 percent realignment of our budget,” Hansen said. “That took about $12.5 million out of what we would spend and set it aside.”
This realignment resulted in 25 layoffs, creating a holding pattern on 44 open positions and closing them — meaning no one will be hired for those roles — and delaying hiring for another 68 positions, Hansen said. That’s a total of 137 jobs affected by the realignment.
With the realignment, Hansen said the school wanted to lessen the impact on students.
“Our first priority was to preserve instruction, preserve classes and everything we can for our students,” he said.
In addition to SIUE’s careful management, an April 25 stopgap bill that provided funds to higher education in Illinois alleviated a few financial problems. The bill sent $600 million to state universities and community colleges, 34 percent of the $1.7 billion originally planned for higher education, according to Reuters.
Hansen said SIUE received $16 million from that action, all of which went to instruction. Illinois still owes the university $44 million, plus an additional $5 million for MAP grants based on what it previously budgeted, Hansen said.
Similarly, Lewis and Clark received $933,000 from the state because of the stopgap bill, approximately 15 percent of the $6 million, excluding $2 million in grants, that the college expected to receive. They also received $275,000 in MAP grant money.
Still, the stopgap bill will only cover the cost of the summer for some schools, Hansen said.
“The stopgap isn’t going to keep some of our sister institutions opened past August,” he said. “They won’t be able to open in September unless something’s done.”
Experts cannot predict when a budget will pass. Some expect a budget, or funding of some sort, to be passed over the summer. Others think politicians may wait until after November so they can focus on the elections.
“If it goes that long, I firmly believe a number of Illinois public institutions very well may crash,” Hansen said.
SIUE is not in such perilous territory.
“SIUE will be able to continue to meet its obligations to its students for another year,” he said.
Lewis and Clark also is in a stable financial place, as it has cash fund reserves called working cash bonds. The school has about $5 million in these funds, which it has built since 1970, and can use them if needed.
Chapman said if the state does not act quickly, however, the school will quickly use up these reserves.
“If they do nothing, we will spend 40 years of working cash interest to try to close the gap on what happened in 2016, and we’ll have no ability to ever do that again,” he said. “We’d still be in dire conditions.”
Nevertheless, he said he hopes the matter will be resolved sooner rather than later.
“We’re hopeful that sometime in the next 30 days, there will be some action on the part of the state,” Chapman said.
Hansen agreed, saying he hopes politicians can compromise and provide some funding soon.
“My hope is that something can still be done this summer, because the crisis is so deep for the other Illinois public universities that it will force the governor and the General Assembly to come to terms,” Hansen said. “I can’t believe we wouldn’t have a budget by January 2017.
“It is incomprehensible that we could go that long without a budget, but I would say a year ago that we said the same thing — that we couldn’t believe we could go through the entire year without a budget.”
For Lewis and Clark, a budget needs to pass soon or the college will be forced to make “major changes.”
“It would mean dramatic cuts in what people have come to understand as Lewis and Clark Community College if the state is so unwise as to turn its back on its public community colleges,” Chapman said.
Ultimately, he said it’s the politicians who can make the difference in this situation.
“I think we need to have people who are willing to reach compromise and come into this with an idea of what’s possible in mind,” he said. “We see every day that our students are really hurting. If we’re going to build a middle class in this area, in this country and in this state, we have to have elected officials who can figure this out.”
Regardless of when a budget passes, Hansen said the impasse has already dealt a major blow to Illinois higher education.
“The damage already done to Illinois public universities is profound,” he said. “Illinois public universities enjoyed, quite rightly, a great reputation in the nation for excellent universities, and that has been squandered and tarnished as evident by the fact that students are choosing to go outside the state of Illinois. It’s going to take a while for us to repair our reputations and repair the damage to our programs, to our services and to our students.”