Statements

President's State Budget Proposal Statement

February 16, 2011

Colleagues,

Today Illinois Gov. Pat Quinn outlined his state budget proposal for next fiscal year, signaling his spending priorities for Fiscal Year 2012.

His speech focused mostly on reduced funding levels and emphasized the importance of restructuring the state’s backlog of unpaid bills by borrowing approximately $8.75 billion to pay off most of the outstanding debt owed to hundreds of service providers throughout the state, including NIU.

Funding levels

The governor was straightforward and forthright when he stated that FY2012 will be a lean year for state spending. Despite this, Gov. Quinn made it clear that he believes education spending represents an investment by the state in its future. The spending plan he presented calls for level funding for public universities, i.e., the same general revenue allocation as appropriated in Fiscal Year 2011.

Considering the fiscal health of the State of Illinois and the history of declining state funding for higher education, the budget proposal put forth by Gov. Quinn for public universities and higher education is as realistic and as optimistic as possible given the state’s dire financial circumstances. However, recall that this year (FY2011) our appropriation from the state was reduced by nearly $7 million, so budgeting at NIU will continue to be very tight. Of course, when inflation is considered, a flat budget amounts to a budget reduction— expenses rise, but revenues do not— so austerity will continue to be our rule.

Another bit of good news gleaned from a cursory review of the budget is that it appears that all proposed capital appropriations previously approved for NIU remain intact. 

Debt Restructuring Plan

The governor also used his budget address before a joint session of the General Assembly this afternoon to advocate for his legislative proposal to restructure $8.75 billion in debt.

The money would be used to cover outstanding bills the state owes to NIU, other public universities, municipalities, schools, social service providers and other state vendors. We are currently owed $77 million with just over four months remaining in the fiscal year. If the state were to restructure its outstanding debt, not only would NIU receive what is owed, but so would health care providers who have waited almost 10 months for reimbursement from the state for employee health insurance payments.

Gov. Quinn made a compelling argument that the state should not spread these payments across 10 years – which is one alternative. Frankly, I cannot envision a scenario that will allow NIU to wait up to 10 years to access state funds for FY2011 and still maintain our operational status. These funds are needed NOW to keep universities, community colleges and schools operating, to ensure services to some of our state’s most vulnerable citizens continue uninterrupted and to help businesses large and small keep their doors open and their employees working.

Senate Republican leadership in Springfield has declared the governor’s borrowing plan “dead-on-arrival,” but I certainly hope that is not the case.

The 35th Senate District, home to NIU, Kishwaukee College, Kishwaukee Health Systems and dozens of social service providers, is owed more than $104 million by the state this year alone, with NIU’s share making up the bulk of that amount. Our region is in the unenviable position of being ranked fifth in outstanding state payments owed to service providers throughout the state. We need the state to honor its commitments and obligations. Students, through their tuition and fee payments, are carrying the entire burden of the state on their backs – not just at NIU, but at every public university in the state.

The debate over the proposed budget has already begun and the only certainties are that the budgeting process is likely to be protracted and partisan.

Even so, I remain upbeat. Difficult times have taught us all how to conserve and work creatively to deliver a quality educational experience under extremely tight budgetary constraints, and I am confident that we can continue to do so. We are managing, and will continue to do so, utilizing the strategies and priorities that we have put in place until the state steps up to its responsibility.

We will continue to monitor and keep you informed on the budgeting process over the coming weeks.

Please consult the university’s new State Pension and Budget Update website maintained by University Relations. In addition, due to the heightened importance of the myriad of decisions the General Assembly is poised to make over the next few months, our government relations staff is providing weekly reports via NIU Today to the NIU community. I urge you to read these carefully and reach out to your legislators to express your opinion on the various proposals pending before the General Assembly.

Illinois remains a great state; our higher education institutions the envy of many. I am confident that over the next several months our government leaders will come together through compromise to put forth a comprehensive plan to address the state’s dire fiscal situation in a manner that will permit the state to move forward, together.

Sincerely,

John G. Peters
President