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August 13, 2002
BUDGET OUTLOOK, AFFORDABILITY STUDY TOP IBHE AGENDA
SPRINGFIELD - An iffy state fiscal environment and
heavy demands on projected new revenues combine to create
a difficult budget outlook as the Illinois Board of Higher
Education (IBHE) begins preparing a fiscal 2004 higher education
spending plan. That's the conclusion of a report Board members
will review at a meeting next week in Springfield.
The Board also will act on a resolution to launch a major
study of college affordability in Illinois, its first in-depth
examination of the cost of going to college since 1994. The
Board will meet at 9 a.m., Tuesday, August 20, at the Lincoln
Land Community College Capital City Center, 130 West Mason
Avenue in Springfield.
"Higher education will face enormous challenges during
these trying economic times," Daniel J. LaVista, Executive
Director of the Board, said. "We at the Board of Higher
Education and within the higher education community will strive
to be creative in focusing on those needs and endeavors that
will enable us to make progress on key state goals even in
a difficult financial climate."
The preliminary report on fiscal 2004 budget issues notes
that general funds appropriations for fiscal 2003 were $147.1
million, or 5.5 percent, less than appropriations for FY02,
the result of a $1.6 billion shortfall in state revenues.
General funds appropriations totaled $2.5 billion for this
fiscal year. Statutory requirements for funding pensions continues
to take a big bite out of dollars available for other purposes:
When allocations to the State Universities Retirement System
(SURS) are considered, FY03 funding for higher education operations
and grants is down $167.9 million, or nearly 7 percent, from
fiscal 2002.
This year's appropriations, when adjusted for inflation, are
just $32 million higher than fiscal 1990, when the temporary
income tax was approved. In inflation-adjusted dollars, state
funding of public universities has fallen $171 million - nearly
11 percent - since FY1990. Support for community colleges
in FY03 is slightly above 1990 levels when funding for adult
education, which was added to the community college portfolio
in 2002, is considered. Without the adult ed money, the state's
48 community colleges also are below 1990 funding levels this
year, down by $24.5 million, or 7 percent.
The report notes that there will be numerous demands on what
limited new dollars will be available through revenue growth
in FY04:
- Retirement. Annual returns on investments have
declined two straight years and SURS ratio of assets to
liabilities dropped to 61.4 percent in FY02 from 72.1 percent
in FY01. Mandated pension funding for FY04 could be as high
as $65 million.
- Monetary Award Program (MAP). Funding of the state's
need-based student scholarship program dropped $38 million,
or 10.3 percent, in FY03, resulting in elimination of grants
to 12,000 of Illinois' neediest students. Approximately
7,000 students face loss of their MAP grant in their fifth
year of eligibility, just as they approach the end of their
undergrad studies. No funds are available to cover increases
in tuition and fees, raise the maximum award, or accommodate
increases in the number of eligible students. No student
will receive an award that fully covers this year's tuition
and fees. Meanwhile, students and their families will face
increases in tuition and fees averaging 12 percent at public
universities, 6.6 percent at community colleges, and 5.5
percent at independent colleges and universities.
- Faculty Salaries. Progress in making Illinois faculty
salaries more competitive with peers nationwide was sidetracked
by this year's budget cuts. The salary initiative, in which
increased state support was supplemented with internal university
reallocations, won support of the Governor and General Assembly
in fiscal years 2000-2002, and is expected to show FY02
gains in salary competitiveness when a new report on faculty
compensation is completed later this year.
- Policy Initiatives. Several Illinois Board of Higher
Education programs and endeavors aimed at meeting important
state goals - including access and diversity, student persistence
and degree completion, non-tenure-track faculty, college
readiness - were put on hold this fiscal year. Although
some progress was made in addressing teacher quality and
supply issues, more attention is needed.
- Adult Education. Community colleges, local school
districts, and community-based organizations offer adult
education services to 110,000 students annually. The state
increased funding of these services by $9 million when the
community college system took responsibility for the program
in FY01. The FY03 appropriation of $34.2 million eliminated
nearly half the new dollars invested in adult ed in FY02.
- Illinois Mathematics and Science Academy (IMSA).
The academy, which educates many of the state's top students
and provides instructional models for math and science teachers
throughout Illinois, experienced budget cuts of $3.1 million,
or 18.6 percent this year.
- Restoring Eliminated Programs. Funding was zeroed
out for the Arthur F. Quern Information Technology Scholarship,
initiated in 2001 to help alleviate the severe shortage
of IT professionals in Illinois. Nearly 1,200 students received
grants last year to assist them in pursuing IT degrees.
In addition, funds for two key programs under the Higher
Education Cooperation Act grants and several community college
grant programs, including one serving students with special
physical or learning needs, were eliminated this fiscal
year.
The Board will review the budget report as its staff begins
considering funding requests from colleges and universities
and state education agencies for fiscal 2004.
At their meeting next week, Board members also will decide
whether to commence a new study of college affordability.
A report presented to the Board in June noted that undergraduate
tuition and fee rates have outpaced inflation in all higher
education sectors in Illinois between 1992 and 2002. In addition,
the report stated that more Illinois undergrads have loans
than ever before, and the average loan burden also has exceeded
inflation.
A report on the Board's August 20 agenda presents updated
information reflecting fiscal 2003 tuition and state budget
decisions, and concludes there is a growing "affordability
gap" for lower income students that threatens "to
diminish both the breadth of access to, and choice among,
higher education opportunities for all Illinois students."
The recommended study would research three broad components
of affordability: 1) demand for higher education services
(student access, choice, and success); 2) the cost of providing
services and the price charged to students; and 3) management
decisions and external demands that influence the cost of
a college degree, including such forces as government regulations
and accrediting body requirements.
The staff recommendation urges creation of a Board Committee
on Affordability, co-chaired by members of the IBHE and the
Illinois Student Assistance Commission. The committee would
present its initial findings and preliminary recommendations
in June 2003.
Board members also will be briefed on a study of faculty diversity,
the product of an executive order issued by Governor George
Ryan requesting IBHE and the higher education community to
examine ways that campus faculty can be made more diverse.
A major study of access and diversity last year concluded
that the college experience is educationally enriched by a
diverse student body, defined broadly to include students
of various cultures, racial and ethnic groups, gender diversity,
and students with disabilities. The faculty diversity study
will examine state grant programs aimed at increasing the
number of minorities who undertake graduate study. It also
will explore the existing pools of available minority faculty
and how those pools can be enlarged; campus hiring processes
and faculty retention efforts; and how diversity-friendly
the campus climate is at colleges and universities.
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