U of I Lays Groundwork For Borrowing, Plans for 2012 Fiscal Year
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.