Illinois higher ed spending growth questioned

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ILLINOIS NEWS NETWORK

Illinois’ public universities and colleges have faced layoffs, declining enrollments and fears of campus closures as the state budget stalemate wears on, but recent financial studies point to past campus policies for their current plight.

An analysis by Local Government Information Services, a self-described government watchdog, found that the University of Illinois’ annual budget spiked 13-fold over enrollment growth since the early 1970s when adjusting for inflation.

The budget for the university is nearly 400 percent higher now than it was 45 years ago in adjusted dollars, even though student enrollment in the system is up only 28 percent within the same time period, according to the analysis.

State Rep. Dan Brady, R-Bloomington, the minority spokesman on the House Appropriations-Higher Education Committee, told Illinois News Network that in years past, universities and colleges were then able to offer generous benefits packages to employees due to the higher funding levels they were receiving from the state.

“This hasn’t been the case for years, and it’s going to get worse before it gets better,” Brady said.

Illinois has cut higher education funding by 54 percent in inflation-adjusted dollars between the height of the recent recession, in 2008, and 2016, a study released last year by the Washington-based Center on Budget and Policy Priorities said.

Pension debts within the university and community college systems are also choking public funding for higher education, according to a fiscal data the Illinois Board of Higher Education provided.

“Years of underfunding the pension system has taken a toll,” the board’s report said. Indeed, statistics show that the state is spending more money on university retirement costs than on the core area of university operations.

The State Universities Retirement System currently is funded at 43.8 percent, and steadily increasing state support will be needed through 2045 for the funding to reach 90 percent, the Board of Higher Education reported.

“Pension funding will continue to compete for available state resources that could otherwise go for higher education programs,” the board said in its report.

Several key reforms will be needed for the higher education system to get on a sustainable path, even if a comprehensive state budget agreement is reached this year, Brady said.

“You need to look at what universities are doing and offering,” he said.

Some universities in the future may need to narrow their focus by reducing degree programs and concentrating on areas that they do best, Brady said.

“Illinois needs to adopt more performance-based funding standards,” as Tennessee has done, Brady said. Under that scenario, colleges and universities would reap state funding outlays based on positive outcomes, such as high graduation rates or successes in bringing in grant funding.

But Brady’s view of a leaner, more versatile higher education system contrasts with goals expressed by the Board of Higher Education. The board’s outlook sees a need to sharply increase the number of people with college degrees in the workforce in order to foster general economic growth in the state.

“Two-thirds of all new and replacement jobs will require a college credential,” the board’s analysis said.

A 2015 report by the Illinois Senate Democratic Caucus sharply criticized the higher education system for administrative bloat and generous perks and benefits given to administrative staff.

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“At the same time tuition and student debt are rising at a breakneck pace, the administrative systems of public institutions have expanded into sprawling behemoths, with some of those at the very top enjoying lavish perks, including expense accounts, club memberships, vehicles and golden parachute severance payments,” the report said.

The caucus report said employees hired by universities and colleges to manage people or perform administrative functions soared 50 percent faster than the hiring of instructors between 2001 and 2011.

And while state support for public universities has sagged over the past 10 years, hikes in student tuition and fees have more than offset those cuts, the report said.

“Those trends debunk the common myth that spending on faculty is responsible for continuing cost escalation,” the caucus report said. “In public institutions, instructional spending declined the most during the 2003-2008 period.”

Andrew Nelms, state director of Americans for Prosperity, a nonprofit group that advocates for limited government, also expressed concerns about higher education overhead in Illinois.

“Institutions need to re-examine the ranks of administrators they need to find a way to deliver a higher quality education at a more reasonable cost,” Nelms said.

He also echoed the conclusions of the Democratic Caucus report and said that giving administrators generous six-figure salaries leads to spiraling pension obligations that burden taxpayers.

“Obviously, when Democrats in the legislature start to highlight the fact that there’s a problem with bloat in the administration, you know there’s a problem …” Nelms said. “We have university presidents that make far more than the governor.”

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Illinois higher ed spending growth questioned

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