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* UPDATED x1 * Behind the U of I’s announcement

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Illinois

* Stan Ikenberry just started his new job as interim U of I president on Monday, and he made what appears to be a big announcement today…

University of Illinois administrators and professors will be asked to take unpaid furlough days this winter because of a “grim and worsening” state budget picture, Interim President Stanley Ikenberry told staff in an e-mail today. Ikenberry also froze hiring and interim wage increases. […]

Ikenberry said the university faces a “cash crisis triggered by the state’s financial situation which is grim and worsening.” He said the university has only received 7 percent of this year’s state appropriation since the first of July — creating a shortfall of more than $400 million.

“At some point we will be unable to meet payroll and complete the academic year unless there are significant payments from the state as promised,” he wrote.

To preserve cash in the meantime, he asked university administrators, including chancellors and deans, to take 10 unpaid furlough days before June 15, and directed faculty and other academic professional staff to take four furlough days between February and May 15. Given the uncertain financial picture for 2011, he suggested that university administrators consider notifying employee groups of termination — something required in advance by some contracts.

But it’ll barely make a dent…

An unprecedented University of Illinois furlough program, announced Tuesday, will save only about $17 million, despite a $436 million shortfall from the state.

And the savings Ikenberry announced is padded…

In addition to the $17 million saved through the furlough program, a 6 percent reduction in expenditures saved an additional $45 million. A 2.5 percent reserve resulted in $20 million saved. The total is the $82 million.

So, $20 million has already been booked? Ironically enough, the lede of this above-linked story is: “The University of Illinois will make a series of drastic cost- cutting measures…” These are not little cuts, but they are not “drastic” by any means.

The governor said relief is coming as soon as the state can take out another loan…

Gov. Pat Quinn says all parts of state government must economize as the University of Illinois announces plans to trim $82 million from its operating budget. […]

Quinn on Tuesday said the university should get some relief after the state does a round of borrowing later this month. That money will give the state some much-needed cash to pay a backlog of bills.

OK, so the state is so far behind in its bills that it’s shorted the U of I $436 million, but we’ll somehow have enough money to pay off this new loan?

*** UPDATE *** The governor and his Democratic rival are sparring over the U of I funding predicament, with Dan Hynes saying that Quinn shouldn’t have waited so long and instead taken out that loan in October, when the state’s cash-flow situation wasn’t so dire…

“This is part of a growing pattern of Pat Quinn blaming others for problems he’s created or hasn’t solved—just like he blamed his corrections director (Michael) Randle for letting dangerous criminals into our communities, he wants to blame others for fiscal problems that are getting worse,” Hynes said.

Quinn said Hynes is at fault for not agreeing to a $500 million short-term loan last month designed to tide the state over until tax money starts to flow in.

“When I look back now, that was just pure politics,” Quinn said.

Hynes disputed Quinn’s assertion.

“The fact is, we will have borrowed more in this fiscal year under Pat Quinn than Rod Blagojevich–the most reckless irresponsible governor we’ve ever had–borrowed in the four previous years combined,” Hynes said. “We’ve had nearly $6 billion in short-term borrowing under Pat Quinn and he wants to borrow more. We are over leveraged. We can’t borrow our way out of this problem and what he’s proposed won’t solve the cash flow problem or the underlying fiscal problem of our state.”

posted by Rich Miller
Tuesday, Jan 5, 10 @ 12:38 pm

Comments

Quinn’s only objective is to get re-elected in November. If that means he needs to put the State further in the hole, so be it.

I can’t decide what is more frustrating, the fact that he may win re-election or that every Republican seems to think we can solve our problems without a tax increase or substantial cuts to vital services. Has any Illinois politician ever taken an accounting class?

Comment by Pelon Tuesday, Jan 5, 10 @ 1:18 pm
==Has any Illinois politician ever taken an accounting class? ==

Chris Lauzen

Comment by Anon Tuesday, Jan 5, 10 @ 1:34 pm
Anyone checked to see if Robert Morris College is interested?

Comment by Cal Skinner Tuesday, Jan 5, 10 @ 1:44 pm
How much can the University save by firing the Athletic Director and Football Coach!

Comment by Just Wondering Tuesday, Jan 5, 10 @ 1:47 pm
- How much can the University save by firing the Athletic Director and Football Coach! -

Not much. The DIA is mostly self-funded.

Comment by Pelon Tuesday, Jan 5, 10 @ 1:54 pm
This is not meant as a non sequitor, but Speaker Madigan has engineered “starving the beast” nearly to perfection. By that I mean the need for a tax increase is becoming such an insistent drum beat that Republicans, at least some of them, will have to vote for one. With a May 7 adjournment on the schedule, we ought to be seeing some pretty fast dancing this spring.

Comment by Captain Flume Tuesday, Jan 5, 10 @ 2:05 pm
===With a May 7 adjournment on the schedule, we ought to be seeing some pretty fast dancing this spring. ===

Yeah. Outta town.

That drumbeat isn’t nearly as loud as it will have to be. When the Tribune editorial board starts demanding a tax hike, then we might get one. I jest only in part.

Comment by Rich Miller Tuesday, Jan 5, 10 @ 2:13 pm
Pardon me, Rich and dear readers, but wasn’t it just weeks ago that Hynes was opposing more borrowing?

Now he says that we should have borrowed money in October instead, when the state’s cashflow was better? Dan, we’d still be in the same cash flow picture now!!!

Comment by Yellow Dog Democrat Tuesday, Jan 5, 10 @ 2:19 pm
Cap’n Flume -

Don’t hold your breath, unless you can hold it until November.

Comment by Yellow Dog Democrat Tuesday, Jan 5, 10 @ 2:19 pm
Six billion already in cash-flow borrowing? There are no more rabbits, there are no more hats.

The GA better get busy after the primary — big revenues, big cuts. MJM, it’s your move.

Comment by wordslinger Tuesday, Jan 5, 10 @ 2:21 pm
YDD, this borrowing was already approved. Quinn waited to do it, is the charge. That’s unlike the new borrowing Quinn proposed last month.

Comment by Rich Miller Tuesday, Jan 5, 10 @ 2:28 pm
Any word on how much the U of I’s finances were damaged by the clout-admissions scandal from 2009? I have a sense that the University lost millions in development dollars, but I realize that a $ figure would be difficult to measure.

Comment by TomD Tuesday, Jan 5, 10 @ 2:54 pm
These so-called “cuts” represents 2% of the UI budget. This is all about setting the table for a big tuition increase this spring and getting union concessions next year. Ikenberry is a short termer so he can do the dirty work.

Comment by smoke screen Tuesday, Jan 5, 10 @ 2:57 pm
The following was also posted under media cluelessness.
“Capt Fax: This will probably get added above, but the Champaign Snooze Gazette has reporters racing around today as if they just discovered the state was $5 billion (yeah B) down in revenue..apparently Big Ike thought he had the clout to get his cash. Suprise! Maybe BlueFieldBob will do better when gets the prexy post. ”
Meanwhile every aspect of state govt…workers, vendors. service providers have been doing more with less for more than a year….We guess the UofI was snoozin’ or missed last Spring.
BTW since the so-called clout-admission “scandal” only reported on students who graduated, went to work and paid taxes it must be assumed the “cost” was zero.

Comment by CircularFiringSquad Tuesday, Jan 5, 10 @ 3:41 pm
Why is Quinn just now coming to the realization that state government must get leaner? Where has he been for the last 11 months?

Just last week his solution to the early prison release programs was to halt one, re-send people to prison in the other, and create more bureaucracy, and obstensibly waste, with two new positions to deal with prisoner release form state custody issues.

While other areas of state government actually got leaner in 2009, how many new people were hired at the executive level?

Comment by "State government must get leaner" Tuesday, Jan 5, 10 @ 4:10 pm
@Circular: my thought was slightly different. I am wondering if the cost of the clout scandal will show in the form of alums who did not really feel like writing a check this year . . . . .

Comment by Anonymous Tuesday, Jan 5, 10 @ 9:46 pm