Dear Colleagues,
I wanted to take this opportunity to update you on the FY2010 state budget situation. While much of the media attention in Illinois has been focused on the dire FY2010 state operating budget passed on July 15 and signed into law by the Governor, higher education’s operating budget has just been finalized. Our higher education operating budget bill was sent to the Governor on June 29th for signature; today we were officially notified that the Governor used his authority to reduce each university’s budget to FY2009 funding levels. Ultimately, NIU and the other public universities will receive the same amount of funds from the state for FY2010 as in Fiscal Year 2009 -- $107.43 million at NIU. While this steady state budget is relatively good news for NIU and public universities given the context of this economy, this does not represent the complete budget picture we face in FY2010.
In order to achieve FY2009 funding levels for public universities, the Governor replaced $4.5 million in general funds with $4.5 million in one-time federal stimulus funds. While this one-time stimulus funding fills the gap and moves us to a FY2010 budget, unless state revenues substantially increase, there will be no further stimulus funds to fill that gap in the FY2011 budget. Essentially, this means that as we begin the state’s budget process for FY2011, we face the prospect of a $4.5 million base budget reduction at the outset.
Our operating budget for FY2010 is also clouded by the unprecedented reduction in the state financial aid funds so many of our students rely upon to pay for a substantial portion of their education.
The fiscal year 2010 budget incorporates an agreement between the Governor and state legislators regarding funding for the Illinois Student Assistance Commission (ISAC) and the Monetary Award Program (MAP). Absent new revenues and facing a substantial state budget deficit, budget cuts were made. Consequently, the amount ISAC received to fund college scholarships and grants (including the MAP grant) has been reduced by almost 50% from FY2009 levels. ISAC will have sufficient funds to allocate full MAP grant awards to students for the Fall 2009 term, but will be unable to provide any funding for Spring 2010 MAP awards.
If the General Assembly and the Governor are not able to find the funds necessary to restore ISAC appropriations for spring semester, this will be a devastating blow to the more than 5,000 NIU students who receive MAP grants, many of whom simply cannot afford NIU without that tuition assistance. Our Student Financial Aid staff are working to develop ways to help our students identify alternative sources of funding.
Unfortunately, MAP grants are not the only source of student funding in peril. The state is unable to fund the Illinois Veterans Grant program for FY2010, an educational opportunity to which veterans who have devoted years of service to their country are entitled. State statute requires that veterans who meet the conditions of the program receive educational benefits; thus the state has shifted these costs to the public universities. This unfunded mandate is estimated to cost NIU an additional $3.4 million in FY2010. Additional budget cuts to various other ISAC-funded grant programs will eliminate an additional $700,000 in student support that would have flowed to the university as well.
As bleak as the situation is, the General Assembly and the Governor continue to try to find additional revenues to offset some of these cuts to the state budget for FY2010. However, at this point, prudence dictates that we finalize our operating budget for FY2010 using the information available to date.
As state support for higher education has eroded (state funding now covers only about 26 percent of our operating budget), our budget has become ever more dependent on student enrollment. We rely heavily on tuition dollars to fund our operations. Maintaining enrollment has become essential to providing quality academic programs and services to students at NIU.
I am meeting with vice presidents and others to continue discussions to develop and implement budget strategies that will address contingencies while preserving our great university’s academic programs and services for our students. Our enrollment is a very important part of this planning process. Be assured that paramount in our response to the dire budget situation is my commitment to our students, our faculty and staff in preserving NIU and minimizing any potential effect on our faculty and staff. In the meantime, please continue to conserve funds by eliminating any avoidable out-of-state travel and non-essential equipment purchases.
Fortunately, not all of the budget news is grim. The recently signed capital budget bill for the state will allow us to address some long-neglected needs on campus. After more than a decade of work by deans, faculty, external affairs staff and others on campus, the state has finally approved $22.5 million for repairs and upgrades to the Stevens Building. Legislators also allocated $8 million dollars to remodel Cole Hall and replace lost lecture space, an important step in the ongoing healing process for the campus. An additional $5.2 million for deferred maintenance will allow us to make some long-overdue and badly needed repairs to campus infrastructure. An additional $2.8 million was included to begin planning for a new computer science and technology facility on campus.
NIU is not alone in facing an uncertain budget for FY2010; many public universities across the nation have been devastated by budget cuts. I will share information with you whenever we have additional news. In the meantime, I appreciate your understanding and thank you for your patience and partnership in continuing to make an NIU education a life-changing opportunity for all of our students.
Sincerely,
John G. Peters
President