Illinois Public Media News
Governor Pat Quinn has responded to outrage over raises he gave to high-level advisers by cutting their pay, but many other state employees will see their paychecks reduced as well.
The Governor used extra powers given to him to get Illinois through the budget crisis by ordering a pay cut he says amounts to 9.2 percent. Quinn says he'll set the example -- he and anyone working directly for him must take 24 unpaid days off.
"I am a diligent hard-working governor," said Quinn. "I understand that we're in difficult circumstances. So I'm cutting my own pay."
State workers who aren't in a union, such as agency heads, managers, and policy staff, must also take 24 furlough days.
Quinn's action comes after revelations that he doled out salary hikes averaging about 11% to 35 members of his staff, including a raise for his budget director. Republicans called on Quinn to roll back the pay increases.
While making his announcement, Quinn also challenged state legislators to double the 12 furlough days they're supposed to take. He also wants the state's largest public employees union, AFSCME, to agree to furloughs.
An AFSCME spokesman says the union will hear what Quinn has to say, but adds that employees are already overworked even as the economy has increased demand for state services. AFSCME and Quinn are currently working under a deal that encourages voluntary furloughs. It also saves the state money by deferring a portion of the pay increases members were scheduled to receive through a contract that was negotiated by former Governor Rod Blagojevich's administration.
The University of Illinois still has about six weeks to act on a plan to borrow funds in order to make payroll and fund other areas where it's lacking in money owed by the state.
U of I Trustees have already granted administrators the authority to take advantage of a bill signed by Governor Pat Quinn that enables public universities to borrow up to 75-percent of what's owed by the state for up to a year. For the U of I, that's around $210-million. But administrators expect to wait until just before the August 31st deadline to decide whether to act on the measure. Ed McMillan chairs the Board of Trustees' Audit, Budget, Finance, and Facilities committee. He says the U of I will continually assess its cash flow before making that decision.
But McMillan says all public universities, particularly those in Illinois, need to keep looking for new funding sources. "As you look at us over the next... let's say three years, you're going to find us working very hard at finding a revenue model that relies upon a different mix of revenue sources," said McMillan. "What that's going to be I don't know. I think you can look around the United States and see several different models that are being tried and successfully being pursued. I don't think any of us have any any predetermination as to what model should be."
U of I Associate Vice President of Planning and Budgeting Randy Kangas says the school could soon seek out a line of credit with a bank if it utilizes the borrowing measure. He notes the state intends to pay its overdue bills by the end of the calendar year... and that short-term interest rates are very favorable. And with Fiscal 2011 just underway, some leaders at the U of I are already thinking of the following fiscal year. Kangas says U of I Trustees plan to seek out about $67-million in state funds for fiscal 2012 by their September meeting. That's in addition to seeking the normal state appropriation of $697-million. Kangas says prior years have brought requests for additional funds of more than $100-million, seeking out help for areas like campus diversity and initiatives to improve graduation rates. He says there hasn't been a change in aspirations, but U of I leaders recognize the reality of Illinois' financial crisis. Kangas says the focus will be to see that top salaries are funded.
"Obviously, the state is in a crisis," said Kangas. "Probably, the nation is still in a crisis in the throws of an economic downturn. However, we have to tell people what our top priorities are. We have to tell the legislature by not fulfilling these requests what we're going to lose when we lost top faculty and staff. So is there a great chance of this being funded? Probably not a great chance." Kangas says there are other 'unavoidables' that are part of that funding request... including utility costs and worker's compensation.
A long-troubled resort inside Shelby County's Eagle Creek State Park is now in the hands of a new manager which promises an extensive makeover.
The state-owned hotel, conference center and golf course were closed last summer after years of declining business - mold had crept into the hotel, making it a significant challenge for the next manager. But the winner of the contract, Mike Ballinger of Decatur-based BMDD Resorts, says his firm will invest in Eagle Creek and try to make it profitable.
"It's going to be a 3.8 million dollar project," Ballinger said. "It's going to be more obviously if something unforeseen pops up. There's a mold remediation. The roof needs to be repaired. Drywall needs to be removed in some areas. Major cleaning."
Ballinger says it will take about a year to reopen the conference center, but the golf course could be open as soon as next month.
Ballinger's firm won the contract over four other bidders last winter - one of the losing bidders, nearby marina owner Dennis Fayhee, unsuccessfully challenged the state's decision claiming BMDD had a conflict of interest. Fayhee and his attorney have not been available to say whether they plan to further challenge the contract.
Shirley Hicks recently took over as the Public Health Administrator at the Vermilion County Health Department. Hicks has been with the health department for 25 years, and comes into her new role amid massive program and staff cuts. In the first six months of this year, the department cut more than half of its staff and eliminated eight programs. The state still owes the health department $600,000, which Hicks says could be paid back by December. She estimates that it could be at least a couple of years until her department can start thinking about adding to its services. Illinois Public Media's Sean Powers spoke to her at the department's office in Danville.
A referendum on township property taxes in Champaign will go on the ballot this fall --- nine months later than intended.
The Champaign City Council voted Tuesday night to place the advisory referendum on the November ballot. It asks Champaign voters if they want to increase their township property tax to provide more General Assistance for the poor.
Voters at last year's annual town meeting approved the referendum for placement on this year's primary ballot, but it was omitted by mistake.
City of Champaign Township Supervisor Pam Borowski was running for the office she now holds when the referendum was proposed. Borowski said the law requires that the measure get on the ballot this November, even though she said hopes it fails. "There's not a need for additional tax revenues at this point in time, and until there is, I'm going to keep saying that we don't need more new property taxes," she said.
The imitative would raise the township tax rate to match General Assistance funding levels in Urbana and other comparable cities. Champaign voters approved a similar advisory referendum in 2008, but rejected a binding referendum for a township tax hike later that same year.
Officials in schools, universities and social service agencies around the state spent Friday parsing a new state budget signed by Gov. Pat Quinn that cuts $1.4 billion in spending.
Education will lose $241 million. But Illinois Association of School Boards lobbyist Ben Schwarm says schools are relieved general state aid will remain flat. That money makes up most of what public schools have to spend. Steep cuts were feared.
The budget cuts nearly $263 million from state grants for, among other things, programs for people with mental illness and developmental disabilities.
And many schools and others note they're still waiting on money the state can't afford to pay from the last fiscal year.
Governor Quinn signed a new state budget for Fiscal Year 2011 this week that cuts spending by $1.4 billion, as the state grapples with the biggest deficit in its history.
The budget includes $69,057,200 for the University of Illinois, which is 6.23% less than what lawmakers put in their version of the budget. Quinn made cuts of similar proportions to allocations for other state universities.
U of I Associate Vice President for Planning and Budgeting Randy Kangas notes that the university has still not received 38% of the state funding it was promised for fiscal year 2010. He says they worry that they might see similar cash-flow problems in the new budget year.
"So appropriation levels are good --- cash is better", says Kangas. "So, we have additional concerns if the state has the capacity to meet the appropriation levels, and that will be a continuing concern."
Kangas says U of I officials have been working for some time on plans for dealing with less state funding.
"The provosts are working very hard", says Kangas. "We have worked through the campus level, and now they will start working through the college and department level allocations."
But he says the plans are still in flux, because of what he calls the state's "unprecedented" financial problems, and the possibility that Governor Quinn may cut even more funding later in the year.
Additional reporting by Amanda Vinicky of Illinois Public Radio
On his first day on the job, new U of I President Michael Hogan admits he needs to be brought up to speed on some issues relating to Illinois' financial crisis.
But the 66-year old notes he's been through similar experiences while leading other universities, and thinks strategically about budgets. Hogan says it's a sad fact that the U of I, like other state schools, have to rely less on state funds - and will have look more at tuition, alumni donations, and research to generate revenue. He plans to spend a third of his time raising money.
But the former president of the University of Connecticut also hopes to avoid a second round of furlough days for university faculty and staff. "So my own disposition would be do try to deal with budget issues in different ways than relying on furloughs," said Hogan. "We can't rule them out right now, and I certainly wouldn't want to say anything definitive until I know more. But in principal, we had furlough days at U-Conn and others, and I know from experience they're very, very hard on faculty and staff morale."
Hogan also expects to get questions about his $620,000 dollar salary. He says it's in line with what other Big Ten Presidents receive... and plans to justify it over the next several months. "I think the question to be asked here is over the next year is 'what have I done to earn that salary," said Hogan. "And if I haven't done enough to earn that salary, I'm sure the board will want some adjustment made. And I intend to earn it. And I intend to bring in the university, one way or the other, a substantial amount more than I'm going to be taking out."
Hogan says he isn't sure yet about job cuts as part of a push to save money. But Former U of I President Stanley Ikenberry - who's leading what he calls a 'process redesign', says other cuts are likely.
Hogan also says he'll be do his best to be accessible. "I think it's a big university, even each part of the university, especially the Chicago campus and the Urbana campus are both by themselves, very large," said Hogan. "I think it helps if people know who the president is. I think by being engaged and being visible and being accessible - even one person, the president, maybe more than others, can help make a big university seem smaller. And that would be my goal." He comes to Illinois after being president of the University of Connecticut.
Gov. Pat Quinn has signed a new Illinois budget that will cut spending in many areas and allow the state's pile of unpaid bills to climb even higher.
The Chicago Democrat says he's doing his best to protect government services that help the economy, schools, health and public safety.
Rather than balance the budget, lawmakers voted to give Quinn special authority over spending. That means he'll decide which programs are slashed, which bills will go unpaid and which special funds will be raided.
Quinn said Thursday that he's using this authority to cut $1.4 billion in spending.
The Champaign-Urbana Mass Transit District starts a new fiscal year Thursday with some uncertainty. The MTD Board approved a $36 million budget for F-Y 2011 on Wednesday-- with nearly two thirds of that funding coming from the state. But managing director Bill Volk says they don't know if Governor Quinn will reduce that state funding as part of budget cuts he's announcing Thursday morning.
"Well, we've heard nothing to the contrary (to full funding) at this point", said Volk, prior to Wednesday's CUMTD Board meeting. "But our full appropriation is in both the (Illinois) House and Senate versions, and the approved budget. So we'll just have to wait and see what the governor has to say."
Volk says the CU-MTD has put contingency plans in place, in case their state funding is cut. He says, for example, if state funding to the agency is cut by 10%, or $2 million, the reduction would come out of their Capital Expenditures budget, and NOT out of Operations.
At the same time, the CU Mass Transit District has yet to receive the $4 million the state had allocated to them for the 4th quarter of the fiscal year that ended Wednesday. Volk says the transit agency will use reserve funds and a line of credit to get by until that money arrives.
Meanwhile, the local revenue that makes up the rest of the CU-MTD's budget is taking a hit. Volk says the soft economy has resulted in lower property tax revenues. And he says the CU-MTD may have to seek an increase in the property tax levy.
"We would expect in our levy this year to maybe propose a 4% increase," says Volk. "But that would be the maximum, and it actually will probably end up lower than that."
Volk says the CU-MTD will likely annex additional territory in 2012. Areas that could be annexed include new sections of the Stone Creek subdivision in southeast Urbana, and the Apollo industrial subdivision on the north end of Champaign. But Volk says property tax revenue from newly annexed areas would not be available to the transit district until 2012.
The CU-MTD also lost an estimated $150,000 in the fiscal year just ended, due to its popular $60 annual passes. Volk says the passes have sold well since the price was lowered by nearly 75%. At the same time, he says CU-MTD ridership is up roughly 2%, at a time when public transit use is declining nationwide.
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