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Starving the beast

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Illinois

* Dusty Rhodes at WUIS…

Colleges and universities have been starved for state funding through the ongoing budget impasse. The interim provost at the flagship campus of the University of Illinois recently presented faculty and staff with a blunt accounting of the school’s financial situation.

As one of the top administrators at the U of I, Edward Feser’s academic specialty is in regional economics. In short, he’s a numbers guy. So when he decided to give the campus community an update on the school’s response to the budget problems, his talk included a big dose of digits. But that’s not all there is to it.

“We wanted to explain how we were dealing with the state funding shortfall. So from fiscal ‘16, from the stop-gap allocation that was provided, if we account for the amount of money that was directed to the university, and we also account for the permanent spending reductions that we implemented of $49 million annually — after you account for those two things, in fiscal ‘16, we remain $140 million short. If we look at fiscal ‘17, we applied additional spending reductions of about $18 million. And then if we take account of the second round of stop-gap funding that was provided, we’re in the hole for fiscal ‘17 by $50 million.

“So if you look at the last two fiscal years in which we’ve had no budget, and instead stop-gap allocations, we are short $190 million from those two years. And that’s after we reduced spending by about $68 or $69 million. And to give you a sense of the magnitude of that reduction — $69 million — it’s important to realize that in fiscal ‘15, we received about $236 million in general revenue funding. So in two years, we’ve made a substantial revenue reduction in our spending, and we’re still $190 million short from those two years. We wanted to explain that to the campus, to help faculty understand it, and to explain how we were addressing that near-term shortfall.”

posted by Rich Miller
Friday, Oct 28, 16 @ 11:00 am

Comments

Vote accordingly.

Comment by Norseman Friday, Oct 28, 16 @ 11:12 am
I seem to hear Rauner and his advocates state that we need to grow the economy to fix things. I understand that statement.

Illinois is and has been a leader in educational attainment. Companies locating here no this and have cited it as a reason to locate here.

If we starve our education system, and that system is a key tool in growing the Illinois economy, what does any rational person think is going to happen to the Illinois economy?

Comment by illini97 Friday, Oct 28, 16 @ 11:12 am
From the interview (well worth a listen to the whole thing. These two parts especially caught my attention this morning on the drive to work):

“These are unprecedented reductions. You don’t simply cut your higher ed by 50 percent one year, or 60 percent in one year. I mean, this is not normal.”

“No one would manage a business this way. No one would take a $2 billion organization like the University of Illinois at Urbana-Champaign and simply put it into a state of perpetual uncertainty until you see enough damage that you’re motivated to act.”

Welcome to Rauner World. Vulture Capitalism 101.

Comment by Anon221 Friday, Oct 28, 16 @ 11:12 am
D’oh!

“Companies locating here know this and have cited it as a reason to locate here.”

Comment by illini97 Friday, Oct 28, 16 @ 11:12 am
From the interview (well worth a listen to the whole thing):
“These are unprecedented reductions. You don’t simply cut your higher ed by 50 percent one year, or 60 percent in one year. I mean, this is not normal.”
“No one would manage a business this way. No one would take a $2 billion organization like the University of Illinois at Urbana-Champaign and simply put it into a state of perpetual uncertainty until you see enough damage that you’re motivated to act.”
Welcome to Rauner World. Vulture Capitalism 101.

Comment by Anon221 Friday, Oct 28, 16 @ 11:21 am
And the erosion in quality is real. Recently, the UIUC campus reduced its minimum ACT score for acceptance down to about 23 from about 25. By lowering the ACT score as part of the admissions process, UI can offset the loss of state financial support through increased tuition dollars from less qualified students. That is why its enrollment is so large. If you care about the reputation of one of the country’s premier public institutions of higher education, you should be very upset with what is happening in this state. We are literally undermining the public institutions that should be the foundation for a so-called turnaround agenda. Instead, it is a turn down agenda. Shameful.

Comment by Scamp640 Friday, Oct 28, 16 @ 11:24 am
Scamp640 -

I find it interesting that SIU has taken the opposite approach with admissions standards, raising the bar a bit in the last 1-2 years in an effort to improve retention. The thinking, of course, is that more qualified students are less likely to drop out.

Comment by Saluki Matt Friday, Oct 28, 16 @ 11:39 am
As a specialist in regional economics, Feser would serve his cause greatly by expanding on in detail the economic consequences in the U of I region to squeeze the beast.

I’m guessing it’s not “growing the economy and creating jobs.”

Comment by wordslinger Friday, Oct 28, 16 @ 11:56 am
And the unsaid part of all of this is that UIUC’s lowering of academic standards is taking students away from the regional public universities which they would otherwise attend, get more personal attention and be successful. Instead these marginal (for a research institution) students are attending UIUC, getting poor grades and this will eventually lead to either the watering down of academic standards in classes at UIUC or a significant downturn in UIUC’s retention rate.

Large almost open-enrollment research institutions are increasingly common now all across the country. They chew students up and spit them out and, other than additional providing additional tuition revenue for the large research institutions, it’s not doing any good for the students, the regional institutions, or actually the research institutions themselves who will have to invest in remedial classes for these students. It’s a short-term fix that will create more problems than it solves.

Comment by Chucktownian Friday, Oct 28, 16 @ 12:10 pm
@Scamp - If it is true that admissions standards have been lowered, I doubt very much that this would mean guaranteed acceptance into any of the colleges or curriculum.

And exactly how is the UofI getting increased tuition dollars from less qualified students? What am I missing here?

Comment by illini Friday, Oct 28, 16 @ 12:10 pm
If Killeen had some guts he would start shutting down UIS.

Comment by Anonandon Friday, Oct 28, 16 @ 12:13 pm
so they found $68 million they could cut. I wonder what that stuff was?

Comment by Todd Friday, Oct 28, 16 @ 12:17 pm
Friendly correction to- Anon221 - Friday, Oct 28, 16 @ 11:12 am:

“You don’t simply cut your higher ed by 50 percent one year, or 60 percent in one year.”

I think you are referring only to the state appropriation and not to the overall budget. The cuts to the overall budget, while completely unsustainable, unwarranted, counter-productive, and unsustainable, don’t amount to 50% of operating revenue because there are other sources of revenue than just the state, most notably tuition. Before the crisis, the state covered only about 17% of ISU’s operating revenue. And in fairness, beyond operating the state is also on the hook for pensions and for capital building projects, if there are any; points that often gets lost.

Still your main point is correct.

Comment by HistProf Friday, Oct 28, 16 @ 12:17 pm
1. Didn’t Rauner at one point early in his administration propose going the route of Scott Walker by cutting Higher Ed by 30%? Iirc, this, then is one of his “victories.”

2. Many community colleges, in terms of percentage of money owed them by the state, are in even worse shape than the UofI.

Comment by G'Kar Friday, Oct 28, 16 @ 12:23 pm
I did some quick checking after reading Scamps comments.

One source placed the acceptance rate at 59% ( low for most major public universities ) with a 26 to 32 composite ACT score ( higher than many ) and a 69% 4 year graduation rate ( among the highest of major public universities ).

I am not certain how the University is getting increased tuition dollars from less qualified students. Maybe I am missing something.

I certainly agree with your sentiments about “reputation”. The budget problems are having impact in many different areas.

Comment by illini Friday, Oct 28, 16 @ 12:34 pm
If you set out willfully to inflict serious damage on Downstate regional economies, there is no greater weapon you could come up with than sabotaging the public universities and community colleges.

Gov. Rauner certainly knows that. But they have union members and prevailing wage — that makes them a target for him.

What a hobby he chose in retirement.

Comment by Anonymous Friday, Oct 28, 16 @ 12:35 pm
@Todd,

You can always cut. You go from eating steak to eating ground beef to eating soup. You hope you don’t get to the point where you consider boiling your shoes for the next pot of soup.

Just because you can doesn’t mean you should.

Comment by Stuff Happens Friday, Oct 28, 16 @ 12:40 pm
@ Illini. The increased dollars come from the overall total increase in the number of students. As the ACT score is lowered, they are letting in a greater total number of students who are all tuition-paying matriculants. If you read this article from the Tribune, you will see on the first line of the story that UIUC had its largest freshman class in its history:

http://www.chicagotribune.com/news/local/breaking/ct-illinois-universities-enrollment-met-20160908-story.html.

Comment by Scamp640 Friday, Oct 28, 16 @ 12:45 pm
Illini- UIUC is taking in less qualified students from other states or countries that pay nonresident tuition. Look at enrollment data over the past 15 years or so. Growth in enrollment at UIUC has come largely from admitting more non-Illinois and international students.

Comment by Downstater Friday, Oct 28, 16 @ 12:46 pm
Rauner has presided over a billion dollars in cuts to the state universities in 2 short years.

The university’s boards and presidents have been mostly silent, and totally unwilling to point the finger at Rauner.

Appalling.

Comment by Handle Bar Mustache Friday, Oct 28, 16 @ 12:57 pm
To clarify : Almost 1.5 billion has been cut, in FYs 16 + 17, as compared to 15.

Not including MAP scholarships for the poor.

Comment by Handle Bar Mustache Friday, Oct 28, 16 @ 1:00 pm
Never forget this whopper:

“Rauner wants more higher education spending

KURT ERICKSON H&R Springfield Bureau Chief

Oct 2, 2014

BLOOMINGTON – Republican candidate for governor Bruce Rauner added Illinois universities to a growing list of state programs he thinks should get more money…”

http://herald-review.com/news/state-and-regional/govt-and-politics/elections/rauner-wants-more-higher-education-spending/article_b38d48b5-872e-5d39-8394-d67630671794.html

Comment by Handle Bar Mustache Friday, Oct 28, 16 @ 1:01 pm
HistProf- Just a note of clsrification… that quote was Feser’s, not mine. I was just reposted some of his quotes from Dusty’s interview.

Comment by Anon221 Friday, Oct 28, 16 @ 1:03 pm
Maybe Lovie can lend them a couple of bucks. Better still, tax the athletics department on a sliding scale based on teams won lost records.

Comment by weltschmerz Friday, Oct 28, 16 @ 1:09 pm
All the state universities and community colleges got hit, but some are less able to continue without drastic actions. Laying off employees, cutting quantity and quality of classes and student services, deferring maintenance and repair, and having no definite funding for next year leaves them all damaged and some likely to sink. 100% the fault of Rauner an his turnaround agenda. Institution’s good reputations built up over many decades are destroyed in only a couple years. This does not help to grow the Illinois economy!

Comment by DuPage Friday, Oct 28, 16 @ 1:48 pm
@weltschmerz: As I understand it, rules disallow funds transfers out of athletics. Perhaps the rules need to change…

Comment by thechampaignlife Friday, Oct 28, 16 @ 2:04 pm
As discussed months ago (and stated by Feser in the interview), athletics comes out of a separate fund with mostly “private” funding via the boosters et.al. Don’t see athletics making any “charitable” contributions to the UI anytime soon;)

Comment by Anon221 Friday, Oct 28, 16 @ 2:14 pm
Remember, Bruce Rauner, any governor that closes a State University on their watch, it’s their responsibility and they will own that.

If college towns elect Raunerites, and if their colleges close, I have no sympathy.

Rauner wants to close state universities, otherwise Rauner would fund them.

Vote Accordingly, before it’s too late(?)

Comment by Oswego Willy Friday, Oct 28, 16 @ 2:31 pm
Then there is the damage done to the students, the employees, and the college towns.

Comment by Anonymous Friday, Oct 28, 16 @ 3:02 pm
I am willing to concede that Governor Rauner has made some fair points in his list of needed reforms, but what he has done to higher education in Illinois is simply unconscionable.

Comment by dr. reason a, goodwin Friday, Oct 28, 16 @ 3:16 pm
Re athletics: Certainly at all regionals, and probably at the U of I itself, the academic side of the university subsidizes athletics. At my school (SIUC), ticket sales & athletics fundraising only account for about 40% of the athletics budget. The rest comes in special student fees for athletics, state money that could have been used for academics, etc. Universities are in the entertainment business (and losing money on it).

But even if we didn’t spend a penny on athletics other than what sports can raise in tickets and donations, that would be only a drop in the bucket toward meeting Rauner’s huge cuts.

When the U of I sneezes, everyone else has got a cold, and some of us have pneumonia. These cuts are killing universities. Most now are gambling that the State will come through with something early in the spring semester. If the state doesn’t at least provide another stopgap, there will be massive layoffs, and some schools may not make it to the end of the semester. And if we keep limping along with stopgaps, quality will continue to decline, students will continue to flee Illinois, and the U of I will have to continue to lower standards to keep up its class size and the tuition revenue that provides.

Comment by Doc Anonymous Friday, Oct 28, 16 @ 3:28 pm