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November 6, 2017

U of I proposes $6.5 billion budget for fiscal 2018
Day-to-day costs nearly flat despite continued enrollment increases

 

URBANA, Ill. – Day-to-day operating costs would remain nearly flat despite another year of record enrollment across the University of Illinois System under a proposed $6.5 billion budget for fiscal 2018 that was reviewed Monday by the Board of Trustees Audit, Budget, Finance and Facilities Committee.

The hold-the-line budget recommendation for the fiscal year that began July 1 will be considered by the full board at its Nov. 16 meeting in Chicago.

Spending would increase by only 0.3 percent for day-to-day operations of a three-university system that saw enrollment rise by nearly 3 percent to more than 83,300 students this fall, setting a record high for the fifth straight year.

Total spending would increase just 1.4 percent, or $92.1 million, to $6.5 billion for the System, with universities in Chicago, Springfield and Urbana-Champaign.

The proposed budget is the first forward-looking spending plan for the U of I System since fiscal year 2015. The System continued to operate under the 2015 framework during a two-year impasse in Springfield that followed and ended last summer when the legislature approved a budget that restored state funding.

President Tim Killeen said timely, full-year funding is crucial to plan the System’s future and ensure strategic investments that support students, faculty and staff, and world-class academic and research programs.

“We are committed to building on our long legacy of serving students, and expanding our critical role as an engine of progress for the people of Illinois and beyond,” he said. “I am grateful to legislators for providing the financial certainty that will help guide us toward the ambitious goals of our new Strategic Framework, which seeks to make the U of I System the global model for higher education in the 21st century.”

The budget includes $4.8 billion for day-to-day operating costs, up $13.4 million, or 0.3 percent, from fiscal year 2017. Operating expenses include salaries of nearly 25,000 faculty and staff, as well as support costs for hundreds of facilities and academic programs.

Many day-to-day costs of the System’s educational mission are covered through the budget’s unrestricted funds. Composed primarily of tuition revenue and state appropriations, unrestricted funds decreased $27.4 million, or 1.2 percent, to $2.18 billion for fiscal 2018.

State funding for the U of I System declined about 10 percent, or $67 million, to $589 million for fiscal 2018 compared to $656 million in fiscal 2017. The decrease was offset by rising tuition revenue, which increased by $29.1 million, or 2.4 percent, to $1.24 billion. Though the System has frozen tuition for in-state undergraduate students for three straight years, revenue has increased through continued enrollment gains.

Killeen said the nearly flat spending proposed for fiscal year 2018 was achieved through ongoing efficiency and cost-savings efforts that prioritized money for student programs and faculty. But he said the System will continue to press for increased state funding that is essential for key initiatives such as robust salary programs to attract and retain top faculty, and increased levels of student financial aid for Illinois residents.

Those efforts also will be supported by a $3.1 billion fundraising campaign launched last month – the largest and most ambitious campaign in the System’s history.

The spending proposal for fiscal 2018 also includes a $40.8 million, or 1.6 percent, increase in restricted fund revenue, to $2.66 billion. Restricted funds include research grants, private donations, hospital and medical service revenues, and auxiliary operations such as campus housing and food services. Those funds must be spent for a specified purpose or in accordance with donor and contractual restrictions.

In addition, the budget includes an estimated $1.69 billion in payments by the state for employee health-care and pension benefits, up $78.7 million or 4.9 percent from fiscal 2017.

Fiscal 2019 funding request

The committee also reviewed the U of I System’s request for state operating funds for fiscal 2019, which begins July 1, 2018. The proposal seeks $681 million, an increase of $98 million from the fiscal 2018 state general funds appropriation.

The request is the first step in the annual budget process, and will be submitted to the Illinois Board of Higher Education and the state of Illinois for consideration.

Officials say the requested increase would restore state funding to support academic quality, as well as ongoing efforts to hold down student costs and increase financial aid to support in-state and underrepresented students.

The fiscal 2019 budget request also seeks $585.1 million in capital funding, which would largely be used to repair and renovate aging facilities at the System’s three universities. Officials say a backlog of projects has grown with no capital funding from the state since fiscal 2010.    


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The University of Illinois System is a world leader in research and discovery, and the largest educational institution in the state with more than 83,000 students, nearly 25,000 faculty and staff, and universities in Urbana-Champaign, Chicago and Springfield. The U of I System awards nearly 22,000 undergraduate, graduate and professional degrees annually.