Potential NIU budget shortfall totals $9-$10 million; Peters outlines "shared response"

by Melanie Magara

NIU officials say they have now identified potential impact on the university of the state's strained economic situation, and have prepared a plan to deal with shortfalls ranging from $9-$10 million.

NIU will begin the FY03 budget year in July with a potential base budget reduction of $8 million, coupled with an additional $1-$2 million shortfall brought on by unavoidable cost increases associated with utilities, liability insurance and building maintenance.

University officials say a combination of cutbacks and projected shortfalls have created the budget problem: a mid-year budget rescission made permanent; a new fiscal year budget request slashed by several million dollars; a new mandate for universities to pick up employee health insurance premiums; and an array of unavoidable cost increases associated with utilities, liability insurance and building maintenance.

NIU President John Peters told members of the campus community in a March 5 e-mail that responsibility for dealing with the monetary shortfall "must be shared among our administration, faculty, staff and students."

"Illinois' budget problems are serious, and higher education clearly must do its part to respond to what we believe is a short-term crisis," Peters said. "Similarly, all members of our campus community must play a part in the solution."

Peters said the large budget shortfall will be met through a combination of "significant cutbacks in each university division and a significant tuition increase." Peters has asked for a complete budget reduction report from each of his vice presidents by April 1.

Members of the NIU Board of Trustees' Finance, Facilities and Operations Committee voted unanimously on March 7 to forward a 8.75 percent tuition increase proposal to the full board for consideration later this week.

"We will meet this challenge together," Peters said. "All members of our university family will be asked to bear some of the burden so that our commitments to access and quality can be maintained."

Peters said his administration would continue to work from a set of priorities he established last November. Those include:

• a commitment to minimal disruption of student academic programs
• strong efforts to avoid reductions in faculty and staff salaries
• strong efforts to avoid layoffs or furloughs

While Peters and his staff are optimistic about avoiding layoffs, they are realistic about what the coming fiscal year holds.

"In spite of our best efforts to minimize disruption, I don't want to pretend that we can absorb a cut of this magnitude without some sacrifice," Peters said. "Clearly, we will all be asked to maintain services with fewer resources, do more with less and generally adjust the way we do business.

"With a budget cut of this size, it appears that we are not going to be able to fund annual fiscal year salary increases or new programs next year," Peters said.

NIU Provost Ivan Legg said college and department cutbacks might include not filling open positions or filling them with junior faculty members at lower salaries — and this only in pursuit of established priorities. In addition, both Peters and Legg emphasized that previous injunctions against unnecessary travel or equipment purchases will be extended.

Peters said campus reaction thus far has been "encouraging."

"I'm pleased but not surprised by the level of understanding and cooperation I've seen since we issued these findings," Peters said. "I've received e-mails and phone calls from dozens of faculty and staff at all levels, expressing concern but also strong support. That sense of joint responsibility is going to get us through this with the least possible disruption to people and programs," he added.

In spite of the grim short-term budget forecast, Peters was upbeat about the future.

"From all indications, it appears that the economy is turning around, both nationally and here in Illinois," Peters said. "Given that forecast, I believe this cutback strategy will be an effective response to a serious but probably short-term problem."