Illinois Public Media News
The University of Illinois Flash Index recorded its lowest level since September.
The index fell in May to 90.6, its second consecutive month in decline following a six month increase. Fred Giertz of the Institute of Government and Public Affairs compiles the Flash Index. He said the drop isn't attributable to any one cause.
The recovery is kind of slowing and not as strong as people thought and hoped," Giertz said. "May was also a bad month for the stock market, so I think there's some lack of confidence now. It's been too much of a downturn. Next month it will be important to see where it goes from there."
Giertz says he expects the economy to get better but it will be a slow process. He says unemployment is still high and the state is going to experience a more painful recovery than it has experienced in recessions in roughly the past 20 years.
The Flash Index is a weighted average based on state corporate, personal income and sales tax receipts. Any number below 100 indicates economic contraction.
Illinois lawmakers have approved a budget and returned home, but they refused to give Governor Pat Quinn all he wanted.
Over the past few weeks it became clear Governor Pat Quinn's efforts to get a tax increase were being pushed aside. Instead, Quinn pinned his hopes on borrowing nearly 4 billion dollars. The proceeds would go into public employee pension systems, freeing up tax dollars that could be used on various needs like schools. One problem was that Quinn was unable to convince enough legislators to give him borrowing authority. The majority party Democrats in the Senate still needed Republican help, and they didn't get it, angering Senate President John Cullerton. "We don't have any Republican votes like they did in the House," Cullerton said following the session.
The House narrowly approved borrowing earlier in the week, getting a pair of Republicans to go along. Cullerton says he envisions returning to the Capitol in a couple of weeks, before the new fiscal year begins.
The Senate failure means Quinn will have to try again or try to manage the state's $13 billion deficit with $4 billion to spend. Democrats could also vote to skip the payment altogether, a move Quinn says would be more costly in the long run.
The General Assembly is back in Springfield this week, with the House back Monday and the Senate in on Wednesday.
Legislators' main mission is to pass a new budget. The Illinois House will convene after an approximately two week long break to work on a budget with the same framework as the spending plan that has already passed the Senate. That plan relies on some cuts and granting Governor Pat Quinn extraordinary authority to make more financial decisions. It's expected the House could tweak it to protect certain programs and rein in some of Quinn's powers. An outstanding question is if the House will borrow money to make a $4 billion public pension payment, or skip the payment altogether. Democratic Representative Ken Dunkin of Chicago says either are better than taking money from social services and education.
"Some of us simply are not looking at reality," Dunkin said. "The reality is if you're in a jam, at this level, and this is a rare occasion for us to be in such significant deficit, borrowing or suspending payment to one year is not a bad option."
Also unclear if is there will be support to pass a cigarette tax hike to help fund schools. Democrats -- who control the legislature -- are aiming to finish before the end of the month. Thereafter, passing a budget will be tougher because some Republicans will need to get on board.
The University of Illinois' Board of Trustees has approved a $620,000 salary for the school's new president, and a 9.5% increase in tuition. The board approved the measures on a voice vote Thursday afternoon. Earlier, protesters marched outside the board's meeting, demanding that new President Michael Hogan be paid only $450,000 annually. Hogan's salary is $170,000 more than that received by his predecessor, B. Joseph White.
On the tuition increase, Interim President Stanley Ikenberry says budget cuts and employee furloughs weren't enough to balance the budget. "But students also are going to need to share a portion of the load," said Ikenberry. "Asking them to share at basically an inflationary rate is, I think, a good balance policy that's fair to students and other groups within the university." For incoming students, tuition will go up $902 dollars per year to $10,386 at the Urbana campus, $792 a year to $9,134 at the Chicago campus, and $706 per year to $8,108 at the Springfield campus.
Ikenberry also said at the meeting that Hogan deserves the higher salary. Ikenberry says Hogan's salary puts him in the middle of the pay scale for Big Ten presidents. He says Hogan has "superb academic credentials.
The University of Illinois' educational outreach to the state is planning for big cuts over the next year.
U of I Extension plans to realign its offices in every county, combining several of those county offices into multi-county regions with shared administration. For example, one region would be made out of Champaign, Ford, Iroquois and Vermilion counties.
"We will have a hub office which will contain most of our people," said Bob Hoeft, the interim extension director. "In the counties that don't have the hub, they will have a satellite office. That office isn't going to be what we've had in the past -- it will probably be smaller. It will probably not be open every day of the week."
But Hoeft says the satellite offices would be able to provide clients with publications and other information without the need to make a long drive to another county. He says the target of the consolidation is to save $7 million over the next budget year, about the same amount of money U of I Extension had to cut from the current year's budget.
The latest report aimed at cutting costs on the University of Illinois' Urbana campus suggests some redundancies are taking place, and that's partially brought on by a lack of communication.
College of Business Dean Larry DeBrock headed a team asked to review the Office of Vice Chancellor for Public Engagement. Units under it include the U of I's Office of Corporate Relations. DeBrock's team says that office doesn't always disseminate information it shares with the private sector with fundraising groups on campus. His team also learned that some faculty need more help in facilitating relationships with corporations. DeBrock says another key to his group's findings involved sustainable practices, like cutting greenhouse gas emissions.
"There's a lot of very great and intense interest in sustainability issues on this campus, as there are on all research campuses right now," said DeBrock. "Because these are imporatant issues off the front page of the newspaper, and they mean to where our society is going to go over the next generation that has caused a lot of interest among both faculty and students... indeed even the campus in a sense of thinking about the sustainability of our operations."
DeBrock's team suggests there should be a central position on the Urbana campus concerned with sustainability, but the group was unsure if a central office would be necessary for getting the message out. His group says the campus is missing an opportunity for failing to coordinate the work of U of I Facilities and Services with the energy efficient research, and studies of students and faculty.
The U of I will take letters in response to the report on Vice Chancellor for Public Engagement through May 28th.
Urbana's proposed budget doesn't include any tax hikes, but eliminates raises and leaves a number of jobs vacant in order to do that.
The city will also rely on $6 million in reserves to balance the budget. Mayor Laurel Prussing says the $48 million dollar proposed spending plan also relies on fine and fee hikes from the past year. The city will leave seven jobs unfilled, including a police officer, a public works maintenance worker, and an executive assistant job that's being eliminated for good. Prussing says one area of revenue - the state motor fuel tax... really hasn't changed in 20 years, and suggests the city should enact its own. She says a 2-cent tax would bring a half-million dollars a year for street improvements. "This is something that has to be discussed with the council, and I'd like to talk about it with Champaign," said Prussing. "But I think it's something that Urbana really has to take seriously because we have a need for this and I think since we'd only be asking for a fairly modest amount, we'll have to see what the public thinks." Prussing says a 5-cent motor fuel tax has worked well in Danville, where residents don't mind spending the extra money to upgrade streets.
Mayor Prussing says she's also concerned about what courts decide on Provena Covenant Medical Center's tax exemption. She says if local hospitals provide enough charitable care to be exempt, then Urbana taxpayers are paying for it. She says that doesn't seem fair for the city to pick up that cost. Urbana's city council gets its first look at the budget plan on May 24th - a final vote on the plan will be on June 21st.
The University of Illinois' 18th president says it's easy to dwell on the financial problems of the state, rather than the good things the 3-campus institution has to offer. When introduced Wednesday, Michael Hogan also stressed the need to look beyond an admissions controversy that led to the previous president's resignation. The Iowa native got a large ovation in Urbana... about six weeks before he takes the helm of the U of I. Illinois Public Media's Jeff Bossert has this report:
Vermilion County's financially struggling Health Department is cutting 16 more staff members by June 30th as it looks to maintain minimum state-certified status.
Adminstrator Steve Laker says even operating at that level will rely on another loan from the county - this one for $75,000. The Vermilion County Board will discuss the loan at its meeting Tuesday. The county is also being asked to pick up about 88-thousand dollars in buyouts for laid off employees. Laker says the health department will also implement a four-day work week later this month. "We're going to set a standard furlough day one day a week. The Fridays will be elimated," says Laker. "So our staff time will be elimated from 35 hours to 28 hours a week, and our operations will be a 4-day a week operation."
By July 1st, Laker says his department will only maintain three programs partially dependent on federal dollars. Those programs are communicable disease services, environmental health... and WIC, or the Women, Infants and Children program. Vermilion County's health department is owed more than $600,000 by the state. It started the year with 74 employees, and plans to have 31 when the next fiscal year begins.
The University of Illinois is expected to name its next president by next week. Trustee Pam Strobel confirmed today that the announcement will come between now and next Thursday's U of I Trustees meeting in Chicago. She says the person is a sitting university president or provost. Her comments came after the Trustees' finance committee meeting.
Illinois lawmakers have yet to approve a budget, but Interim President Stanley Ikenberry says trustees still plan on a tuition hike for next year of 9.5 % based on the best information they have. After the committee meeting, he said the U of I will also consider a short-term borrowing measure to make up for a loss of state dollars. Ikenberry says it's frustrating that lawmakers haven't completed their work. He says trustees have to give both the U of I, as well as parents, time to plan. But Ikenberry admits the funds from that tuition increase will fall well short of covering roughly $46 million dollars in lost state support, and a number of comparable budget reductions will still be required.
"I think our philosphy going into this is to ask academic programs and students both to share in this... that's been our practice in the past," said Ikenberry. "And that's what kind of a recommendation would provide for." Ikenberry says it remains to be seen whether the U of I would act on a measure giving short-term borrowing authority to public universities. Governor Pat Quinn has yet to sign the bill. Ikenberry says unless legislators solve Illinois' overall financial crisis, he says borrowing will be likely.
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