Tom Kacich | Parkland president stumping for nursing-degree bill

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Controversial legislation pitting two-year community colleges in Illinois against four-year universities is scheduled for a return trip to the Senate Higher Education Committee this week.

Tom Ramage, president of Parkland College in Champaign, will be among the chief proponents of legislation that would permit community colleges to offer four-year baccalaureate degrees in nursing.

The bill (SB 888) suffered a setback in the committee last May, although that was a different version. That measure would have restricted the initiative to 11 community colleges — among them Parkland and Lincoln Land in Springfield — and to no more than 7,000 students. The original version of the bill permitted as many as 20 community colleges to offer a four-year nursing degree.

Under this newest version, the limitations are off.

“It removes all restrictions on how many community colleges can have the program. There’s no limitation, which is interesting,” Ramage said.

And he’s fine with that.

“If I were a legislator, I would be the sponsor,” he said. “I do know there was concern among the community colleges that (11) would be severely limiting. There were more than that number who were very interested.”

Last year, the same committee voted down a different version of the bill 8-7. The two local senators on the panel, Democrat Scott Bennett of Champaign and Republican Chapin Rose of Mahomet, cancelled out each other’s vote. Bennett voted for it; Rose was opposed.

Bennett said last week that he needed to review the new proposal before making a commitment. Rose said he’s interested in the legislation and the issue but that he thinks it ought to be part of a broader plan for administering higher education in Illinois, something a bipartisan higher education working group of legislators is reviewing.

Ramage said he didn’t know what kind of a reception the bill would get this time around.

“I don’t know if it will get out of committee. But we’re working it very hard,” he said.

And he’s going to work for it doggedly, he pledged.

“As long as I’m working we’re going to have a bill every year until it gets done. Perhaps it’s this year. If not, it will be the next and the next after that,” Ramage said, “I think it’s the very formulation of a great plan for higher ed, especially community colleges and how well we can serve our communities.”

Last year, opposition to the measure came from public and private four-year universities, in particular Southern Illinois University and its president, Randy Dunn.

“If we cross this line in providing the authority for bachelor’s degrees at community colleges,” Dunn said, “we’re at a point where we will be changing statutory, operational history and the structure of how Illinois public higher education was envisioned.”

He said that 35 higher education institutions already had nursing programs and could expand their capacity to meet the perceived need.

But supporters of the four-year degree at community colleges said that students needed a more affordable option, one that was closer to their homes.

Spoerer debt

Carl Spoerer, the rural Mahomet man who sought the Democratic nomination in the 15th Congressional District last month, has terminated his campaign fund, essentially taking on a nearly $13,000 debt left over from the campaign.

Spoerer, who lost the Democratic nomination to Kevin Gaither of Charleston, reported $18,131 in contributions during the campaign, although more than two-thirds ($12,774) was from himself. He spent $15,743 in his unsuccessful campaign.

Coincidentally, the man whose job he wanted — veteran U.S. Rep. John Shimkus of Collinsville — last week reported having a little more than $1 million in his campaign fund on March 31.

Shimkus, who was unopposed in the Republican primary, has reported $1.23 million in campaign contributions this election cycle. Of that sum, $1.11 million — or more than 90 percent — has come from political action committees.

Frerichs opponent

Jim Dodge, the Orland Park village trustee who is the Republican candidate for state treasurer, reported $15,353 in his campaign fund on March 31.

Dodge will oppose State Treasurer Mike Frerichs, a Champaign Democrat, in the November general election. At last count — Dec. 31, 2017 — Frerichs had more than $530,000 in his campaign fund. He’s reported another $258,000 in itemized contributions since.

Dodge raised $35,207 in the first three months of 2018 and spent $27,822 during the period. He was unopposed in the Republican primary.

So far, he has loaned his campaign almost $28,000. He hasn’t received any campaign support from the Illinois Republican Party or Gov. Bruce Rauner.

Tom Kacich is a News-Gazette reporter and columnist. His column appears on Sundays and Wednesdays. He can be reached at 351-5221 or at kacich@news-gazette.com.

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Tom Kacich | Parkland president stumping for nursing-degree bill

Taxpayer Costs Soared as Illinois Public College & University Enrollment Dropped

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A woman walks on the University of Illinois campus in Urbana, Ill. (AP Photo/David Mercer, File)

There’s no question – there’s something wrong with Illinois higher education. While enrollments trended downward, pay and pension benefits spiked upward. Soon, some Illinois colleges may have more staffers than students.

In 2016, the freshman class enrollment at Chicago State University numbered just 86 incoming students. Meanwhile, the university employed 980 staffers. Even after the ratio was exposed, the numbers haven’t sustainably improved. In 2017, just 145 freshmen enrolled at Chicago State, but the university payroll shows 660 employees costing nearly $40 million.

For the last two decades, Illinois’s public colleges and universities vastly increased the cost of their payrolls and lavished extraordinary lifetime pension payouts – but the institutions have yet to see a measurable increase in students. Quite to the contrary, enrollments decreased by nearly 8 percent over the last 17 years.

Review our OpenTheBooks.com college-by-college enrollment analysis (2000-2016), click here.


OpenTheBooks.com

Illinois Colleges and Universities with the Largest Enrollment Drops (2000-2016).

Our auditors at OpenTheBooks.com reviewed disclosed data since the year 2000. Consider our key findings:

  • Plummeting student enrollment. In 2000, Illinois public college and university enrollment was 534,615. By 2016, enrollment had fallen to 493,378. That’s a 7.7 percent drop.
  • Massive Payroll and Pension Costs. Illinois higher-ed payroll in year 2000 was $2.8 billion. Today, current payroll costs $4.2 billion. But that doesn’t include 46,430 employees in 2000 who since retired and currently draw $1.8 billion in annual pension payments. These new retirees represent a heavy legacy cost on the underfunded system supported by tax dollars.
  • 13,300 Highly Compensated Educators Making $100,000+. Active, working educators comprise less than 9,700 of the 13,300 six-figure educators. The other 3,700 are retired, enjoying six-figure pension payouts.

Review the all-time Illinois higher education retirement pension payouts, click here.


OpenTheBooks.com

*Career Wages is the amount of compensation employees received over their entire career.
**Total Pension Contributions is the amount an employee paid into their own pension over their entire career.

This gross lack of accountability – and the decoupling of pay and pension compensation from the real work – is not a new issue for Illinois higher education. Here are three historic examples of taxpayer abuse:

  • The fourth all-time college pension went to Ron Guenther, the former athletic director at the University of Illinois. Guenther retired in 2011 after bumping his salary from $330,000 (2003) to $608,000 (2010). Last year, Guenther received a $487,287 pension payout – that’s more than $40,000 every month.
  • Former Illinois Governor Jim Edgar double-dipped the Illinois General Assembly pension ($166,000 per year), the State University Retirement System pension ($83,000 per year), and, currently, is hired back ‘part-time’ by the University of Illinois for another $62,796 per year. In total? More than $311,000 per year.
  • Retired Moraine Valley Community College President Vernon Crawley’s salary bumped from $202,709 (2001) to $673,000 in his final year (2011). In his sixth year of retirement, Crawley enjoyed a $383,260 annual pension payment (2017) – that’s nearly $32,000 per month.

Illinois income taxpayers are slammed with these excessive state college and university retirements because colleges have no skin in the game. Universities don’t have to fund these pensions – employees pay in eight percent of their salary and literally leave the rest to the taxpayers. This year, there were 33 pensions that exceeded $300,000 – some of those retirees “broke-even” on their own cost-basis pension contributions after just 11 months in retirement.

The University of Illinois campuses in Chicago and Champaign-Urbana are the worst offenders for putting taxpayers on the line to fund their pricey operations despite $2.1 billion in financial assets amassed by the University of Illinois Foundation.

The University of Illinois Chicago (UIC) paid its 14,282 employees more than $1 billion in compensation last year, including nine out of the top 10 most highly compensated employees in the system. The University of Illinois Champaign-Urbana paid six-figure compensation to more than 2,050 employees. Brad Underwood – the University of Illinois basketball coach hired in March 2017 is the most highly compensated employee funded by taxpayers ($680,675). (Football coach Lovie Smith enjoys a six-year, $21-million contract plus $8 million in potential bonuses – but taxpayers fund just $111,571 of it annually.)

Consider these examples of recent retirees whose salary hikes ensured padded lifetime pension payouts:

  • Paula Meares had served as chancellor of UIC for six years when board members decided to replace her. In her final year as chancellor, Meares’ salary spiked from $426,272 (2014) to $475,931 (2015). In 2016, Meares made another $410,000 and received a bonus for nearly $100,000 on her way out the door. In 2017, Meares received her first pension payout for more than $250,000.
  • Before retiring as the director of UIC Center for Global Health, Timothy Erickson’s salary shot from $465,688 (2014) to $491,118 (2015). In 2016, Erickson pulled down another $476,512. In 2017, Erickson received a $214,704 pension payout – but he wasn’t ‘retired.’ Erickson continued his career as a core faculty member at Harvard and an emergency medicine physician at the Brigham and Women’s Hospital in Boston.
  • A trio of University of Illinois professors retired in 2016 after substantial end-of-career salary increases. Former psychology professor Brian Ross’s salary spiked from $245,626 (2014) to $290,605 (2016). John Colombo, former law professor, saw his paycheck increase from $248,855 (2014) to $333,446 (2015). (Dr. Colombo’s salary hike was the result of taking an interim dean position at the College of Law, read Colombo’s full background and response here.) Former Dean of Faculty and business professor Gregory Northcraft’s salary bumped from $409,623 (2014) to $435,515 (2015). In their first year of retirement, each of them received more than $193,000 in pension payouts.

Review all Illinois higher education public employee salaries, click here.


OpenTheBooks.com

Top 10 Illinois Higher Education Salaries (FY2017).

In Illinois, academic power couples can work together to game the system. The southern Illinois junior college power couple Dale Chapman ($466,840) and Linda Terrill Chapman ($223,809) combined for a $690,000 income at Lewis and Clark Community College last year. If you think they’re costly now, just imagine the ever-growing size of their pensions.

Other junior college presidents are also raking in huge paychecks: Christine Sobek at Waubonsee Community College in Sugar Grove made $379,464; Thomas Ramage at Parkland College in Champaign made $285,130; Sylvia Jenkins at Moraine Valley Community College in Palos Hills pulled down $271,825.

It’s not impossible to clean up the system. In 2014, we launched an oversight investigation on the College of DuPage. We exposed the president trying to procure a corrupted $20 million state construction grant and more than $100 million in hidden spending over a six-year period. Transparency worked – and there is a new day at the College of DuPage.

Holding Illinois universities accountable has proven effective. For example, after years of enrollment drops, Eastern Illinois University (EIU) faced a 14-percent budget cut resulting in at least 400 layoffs. This year, however, EIU President David Glassman told an Illinois House committee that the college expects a significantly bigger freshmen enrollment and the budget balanced.

Across the state, Illinois must use transparency and accountability to protect student tuition funds, taxpayers, and clean up their budgets. Until then, however, the student brain drain will continue. These highly paid educators aren’t attracting Illinois high school grads to their universities. On the contrary, since 2002, the percent of Illinois high school graduates choosing out-of-state colleges has skyrocketed from 29 percent to 46 percent.

High school grads are fleeing Illinois universities like they’re on fire – and they’re right. Illinois higher education is burning student and taxpayer money.

Adam Andrzejewski (say: Angie-eff-ski) is the CEO and Founder of OpenTheBooks.com. Learn more: our comprehensive coverage of the 63,000 Illinois public officials earning more than $100,000 in FY2016 published at Forbes, click here.

Taxpayer Costs Soared as Illinois Public College & University Enrollment Dropped

Lawmaker proposes splitting up the SIU system

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SPRINGFIELD — After Thursday’s vote against a plan to shift more money from SIUC to SIUE, a state lawmaker with ties to Edwardsville wants to split the two campuses.

State Rep. Jay Hoffman (D-Belleville) has suggested the idea several times over the past couple decades, but he still feels the effort could win approval, especially in light of this week’s events.

Hoffman said he feels like SIUE doesn’t benefit much from being in the SIU system. He also feels like the two universities have different missions, and having different governing boards for each one will allow both to thrive.

Hoffman has filed similar legislation as recently as 2014.

His bills would essentially do two things: put SIU Edwardsville and the SIU School of Medicine under one umbrella and let SIU Carbondale have its own board.

It would also guarantee the two universities receive the same amount of money, not the 60-40 split it’s supposed to be currently.

Hoffman said that won’t cause SIUC to lose money.

“I would provide money to adequately fund the university systems, which would, I believe, not end up with SIU Carbondale losing money but both the universities would actually see an increase in the money,” Hoffman said.

Local lawmakers aren’t on board with the proposal.

“The timing is awful and it reeks a bit like a tantrum over what happened (Thursday),” State Rep. Terri Bryant (R-Murphysboro) said.

Bryant also said the move would hurt SIU’s research accreditation.

State Sen. Paul Schimpf (R-Waterloo) and State Rep. Natalie Phelps Finnie (D-Elizabethtown) want more time to research the idea, but Schimpf also said in a statement he feels the two universities are better off in the same system.

State Sen. Dale Fowler (R-Harrisburg) worries SIUC will lose more money under the proposal, which could be devastating to the community.

News 3 also reached out to SIU system president Randy Dunn. His spokesman told us he wants to wait a few days to respond.

Lawmaker proposes splitting up the SIU system

EIU opposes proposed Illinois bill on student debt

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CHARLESTON — Students who owe money to public universities and community colleges in Illinois would not be prohibited from registering for classes under a proposed measure, and local higher education officials are worried.

The bill under consideration in Springfield also would permit students with a backlog of unpaid bills to receive student transcripts without protest from their institution. This could potentially increase enrollment rates at local state institutions like Eastern Illinois University, advocates said.

“We have a population of job seekers who need transcripts to show potential employers that they’re qualified for good-paying jobs,” said State Sen. Emil Jones III, D-Chicago, who proposed the legislation. “Without access to their transcripts, recent graduates are often skipped over and relegated to a situation where they can’t pay any outstanding debt to the school they graduated from.”

But the bill would create an “untenable business model” for state institutions, said EIU spokesman Joshua D. Reinhart.

For Eastern, this legislation is the equivalent of an “unfunded mandate,” said Paul McCann, vice president for business affairs. This legislation removes tools the university needs to collect from these students. It will make collecting much more challenging for the university, he said.

“If I give up the ability to stop them from re-registering or from getting a transcript, I might as well just say there is no reason to even send them a bill,” he said.

There is less incentive to pay anything, the vice president said.

“Bottom line is kids can’t go for free,” he said. “Somehow we got to figure out how to accumulate that money.”

“If they think it is reasonable that students should come to school for free then there needs to be additional funding to handle that,” McCann added.

At Eastern, administrators work individually with students to ensure ongoing enrollment and transcript procurement, school officials said.

“We make as many adjustments as we possibly can (to help them pay their bill),” McCann said.

By assessing needs at the individual level, enrolled students with outstanding balances of $200 or more are offered and can participate in customized payment plan options that would allow them to register for class or request transcripts immediately thereafter.

Jones said state funding to help the neediest students in Illinois has not kept pace with the costs of education, making it necessary to create ways to help them continue with school or seek employment after graduations.

Gov. Bruce Rauner proposed keeping Monetary Award Program funding for low-income students at current levels in his recent budget plan.

“Since this MAP grant funding hasn’t been enacted, many students weren’t able to register for classes or get copies of their transcripts for other scholarships, pushing intended graduation dates back even further for many students,” Jones said.

At Eastern, 66 percent of all undergraduates rely on federal student loans to help pay for their college education averaging $7,176 per year. The amount is 14.4 percent higher than the $6,273 amount borrowed by a freshman, according to the university.

In 2016, 39 percent of the first-time, full-time class of 2012 had not completed their degree.

According to Eastern data, 10 were still working towards their degree, 553 had transferred to a different institution, and EIU lost contact with the remaining 129 whom they assumed dropped out.

“This bill highlights the need for adequate financial aid for the state’s universities and colleges,” said state Sen. Pat McGuire (D-Joliet), chair of the Illinois Higher Education Board. “Universities have established emergency food pantries, emergency aid, and transportation for students to keep students enrolled.”

Reinhart said university officials are “keenly aware” of the financial difficulties many of its students face as they pursue their degree. But to Eastern officials, the outcome would likely be negative.

“Our costs will go up (should the legislation make it through),” McCann stressed.

Meanwhile, a drop in enrollment was also evident in local community colleges like Lake Land College, whose non-degree enrollment dropped from 2,288 in 2016 to 1,920 in 2017. In total, enrollment shifted from 3,865 in 2016 to 3,388 in 2017.

According to the Lake Land College 2017 enrollment report, the decline can be seen between FY2014, a year before the first budget impasse hit Illinois and FY2017.

Enrollment at many of the state’s public universities has declined this year after institutions were hit hard by the state’s recent financial instability, following a two-year budget impasse that has crippled the state’s higher education budget.

The measure has not gone very far since it was proposed last year. So far, it has jumped from committee to committee. Most recently, it was reassigned to the higher education committee. 

Staff writer Jarad Jarmon contributed to this article.

EIU opposes proposed Illinois bill on student debt

SIUC still has several steps to take before restructuring

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CARBONDALE — Last fall, the newly minted chancellor of Southern Illinois University Carbondale announced that he intended to rebuild the struggling institution from the ground up.

SIUC’s chancellor sketched out a broad academic reorganizational intended to get the university back on track. He also announced that University Museum, which shuttered in July because of the state budget impasse, will reopen in January 2018.

Carlo Montemagno’s all-but-unprecedented restructuring plan eliminates the basic academic unit in traditional university structures — departments — and combines degree programs into schools, which in turn belong to larger colleges.

The plan has proved controversial on campus, as some faculty protest that jettisoning departments will take power away from professors and upend a model that has worked for decades.

The chancellor, for his part, says the reorganization is the bold move SIUC needs in order to provide new forms of collaboration and to make programs attractive to prospective students.

At a standing-room-only work session Wednesday, Southern Illinois University Carbondale’s new chancellor presented his controversial academic reorganization plan to the SIU Board of Trustees, eliciting an apparent mix of skepticism and support.

Stances on the plan aside, one thing is clear: restructuring a university is a complicated business. This article attempts to map out the thorny reorganization process and determine where SIUC stands now.

School-level proposals

Montemagno’s academic reorganization occurs on two levels: colleges and schools. The more complicated process takes place on the school level because it is subject to faculty union review.

Based on Article 9 of the SIUC Faculty Association contract, the university must develop proposals for changes to programs.

“What the faculty union here bargained with the administration is a process to organize how changes would take place to academic programs … and it requires that there be a proposal developed to, in this case, merge such programs or such units, and that that proposal provide enough information for people to make a reasoned judgment on whether it was a good idea or not,” Faculty Association President Dave Johnson said.

In November, a series of proposals were distributed to affected academic units. Once those were handed out, the clock started ticking for 90 days of faculty review and discussion.

David DiLalla, associate provost for academic administration, is overseeing the bulk of the proposal review process.

“We had meetings with faculty with administrators present, we had meetings with faculty without administrators present, and then somewhere during that 90-day period, if the faculty said, ‘You know what, we already have all the information we need, we already had the discussion we need, we’re ready to move on,’ they could vote to close the 90-day window early. One or two did, but most did not,” DiLalla said.

At the end of 90 days, the discussion window closed, unless faculty voted to extend the discussion an additional 30 days — a power granted in the faculty union contract.

For the several academic units that voted for an additional 30-day extension, the discussion window closed in mid-March.

At that point in the process, “proposals” became “program change plans” — documents that include adjustments made to the original proposals based on discussion and feedback, but also include the form known as a “reasonable and moderate extension” (RME).

An RME is the mechanism by which program changes are implemented through the Illinois Board of Higher Education.

DiLalla and Associate Provost for Academic Programs Lizette Chevalier are currently putting together program change packets that go out to faculty, the Faculty Association, the Faculty Senate and Graduate Council.

Each department will have the opportunity to cast a vote, and the union will make reports to the Faculty Senate and Graduate Council.

“Faculty don’t have a veto over changes in the contract, but we do get to vote, we do get to suggest changes, we do get to make our voices heard. So it’s an example where the union has worked hard to make sure that faculties are partners in running the university,” Johnson said.

The Faculty Senate and Graduate Council will also then take votes and make recommendations, and the plans are returned to the chancellor.

“The chancellor at that stage will have access to everything — he’ll have department vote, he’ll have the Faculty Association report, he’ll have Faculty Senate report, Grad Council report … and then the chancellor is making a determination about whether this proposal or plan should continue and go forward or should not,” DiLalla said.

As program change plans leave campus review, they will be brought before the SIU Board of Trustees. DiLalla said it is unclear at this point whether the board will take a formal vote on the plans.

The chancellor originally hoped to get the plans before the Board of Trustees at the April 12 meeting in Carbondale.

The process is behind schedule, but DiLalla said he could not provide an updated timeline.

“I really can’t speculate. It takes the time that it takes. … It is a complex process, and we had some goals about how we would like to see the process move forward, but we recognize that it takes the time that it takes,” DiLalla said.

Once the RMEs are completed, they will be submitted to the IBHE for review and approval, either by staff or by the board itself, according to Stephanie Bernoteit, IBHE deputy director of academic affairs.

If there are issues with an RME application, a staff member will issue technical questions to provide SIUC to clarify or add missing evidence and information, Bernoteit said.

“The typical process is to use technical questions and responses to bring an application to a place where it can be fully considered,” she said.

Bernoteit said she couldn’t say how long the review process might take, as it depends on the workload of IBHE staff at a given time.

DiLalla said he wasn’t sure whether the RMEs would be submitted individually or all at once.

“It’s not moving in lock-step — we’re moving at varying rates depending on where a given proposal is … my guess is that these are probably going to go to the IBHE in phases, but I can’t say that for sure,” DiLalla said.

College-level RMEs

In late March, departments were asked to vote to approve college RMEs, which are not subject to faculty union review. Some departments were given as little as a week to vote, according to Johnson.

The union saw this move as an “end run around the Article 9 process” because it would lay the framework for the reorganization without waiting for votes on school-level plans, Johnson said. In other words, new colleges would be established without any schools to fill them.

Later, the administration changed tack and retracted deadlines for college RME approval. DiLalla said renaming the colleges while simultaneously pursuing the proposals for schools “raised confusion” among faculty.

Instead, newly formed schools will temporarily report to the provost rather than to a college.

“ … We temporarily place that school kind of in a holding pattern in the provost’s area, and when we finally get the schools that are all going to be in a college through the system, we’ve got them all ready to go, then we turn our attention to the college renaming and then independently prepare the college rename or whatever we might need to do in order to then have those schools assigned to the college,” DiLalla said.

Bret Seferian, a director of the Illinois Education Association who works with several of SIU’s unions, said he believes having schools report to the provost could lead to workload issues.

“The administration keeps changing what the plan is, and my guess is it’s because they don’t really know what they’re doing. It looks like they’re scrambling to me,” Seferian said.

DiLalla said he could not estimate when the college renaming might be in place or how long schools will report to the provost.

“I think it’s best to say that it’s dependent on the speed with which school-level proposals were to emerge,” DiLalla said.

SIUC still has several steps to take before restructuring

With deal coming, University of Illinois ratings highlight resilience amid state budget uncertainty

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CHICAGO – Illinois’ flagship public university returns to the market this spring with its ratings holding steady thanks to its healthy fiscal position that has better weathered the state’s fiscal mess than its regional counterparts and to a break in the budget impasse.

The University of Illinois Board of Trustees will take bids next month on $145 million of auxiliary facilities system revenue bonds. PFM Financial Advisors LLC is advisor. Chapman and Cutler LLP is bond counsel and Katten Muchin Rosenman LLP is special issuer’s counsel.

A portion of the deal will refund variable rate demand paper and the remaining will provide funding for the university’s new football performance center that will house football team rooms, locker rooms, sports medicine, strength and sports training areas, and coaches’ offices. Renovations to a residence hall dining facilities and a new soccer and track complex also funded.

Ahead of the sale, Moody’s Investors Service affirmed the university’s A1 rating and negative outlook that applies to $1.1 billion of similarly backed bonds and $183 million of certificates of participation. It also affirmed the A2 rating on south campus development bonds and Baa1 on health facilities bonds.

S&P Global Ratings affirmed the university’s AFS rating of A-minus and stable outlook. The rating is capped at three levels above the sponsoring state – Illinois – which is rated BBB-minus with a stable outlook. If it weren’t linked off the state rating, S&P said the university’s profile reflects a AA-minus credit.

The AFS are payable from pledged system revenues that total $1.28 billion and student tuition and fees. The school, which operates campuses in Urbana-Champaign, Chicago, and Springfield with a combined enrollment of more than 80,000, has $1.65 billion of debt that carried ratings in the double-A category before the budget impasse dragged the state’s rating down.

“The stable outlook reflects our expectation that during our two-year outlook period, the university’s enrollment will continue to grow at a moderate rate, and operations will remain, at a minimum, positive on a cash basis,” said analyst Ashley Ramchandani.

The university benefits from its flagship position with more than $5.2 billion in revenues, federal research grants totaling $800 million, excellent demand profile, substantial endowment of $2.3 billion, strong fundraising record, and balanced operations. The challenging state funding environment, long-term capital pressures, and low unrestricted available resources offset the strengths, S&P said.

“The key offsetting consideration is the university’s material reliance on the state of Illinois for operations, including on-behalf payments for employee benefits, with uncertainty regarding funding of direct appropriations and potential shifting of responsibility for pension costs to the university,” Moody’s wrote, adding that state funding pressure “are likely to result in ongoing weakening of U of I’s financial position over a multi-year period.”

The university’s balance sheet relies on $889 million in fiscal 2018 state appropriations, including $300 million that was delayed from fiscal 2017. State aid accounts for about 30% of operations, a far lower level than some of Illinois’ other eight public universities many of which saw their ratings sink to junk during the state’s budget impasse. The university is also one of the few state public universities that didn’t lose enrollment during two years of budget gridlock and averted deep programming cuts to manage through state aid payment delays.

The fiscal 2018 budget pushed through by the legislature’s Democratic majorities cut aid to universities and Republican Gov. Bruce Rauner has proposed shifting a portion of the state’s annual pension contributions for university employees to the schools that employ them.

The fate of the budget for the fiscal year beginning July 1 remains up in the air with lawmakers focused on the Tuesday primary which comes ahead of the November general election. Rauner faces an opponent and three contenders are vying for the Democratic nod.

“We will continue to monitor the state’s situation, an impending fiscal 2019 budget, and its potential effects on the university, as we move closer to fiscal year-end 2018,” S&P wrote.

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With deal coming, University of Illinois ratings highlight resilience amid state budget uncertainty

DPI proposal runs into opposition at legislative hearing

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UI DPI Phillips.jpg

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State Rep. Reggie Phillips, R-Charleston

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SPRINGFIELD — The state should pay attention to capital improvement needs at all public universities in Illinois before it devotes $500 million to build a proposed University of Illinois-led research institute in Chicago, state Rep. Reggie Phillips said.

And the Charleston Republican coaxed the presidents of Southern Illinois and Eastern Illinois universities to agree with him during a House Higher Education Appropriations Committee hearing Thursday.

“Why would you build in Chicago a $1.2 billion center with $500 million in state of Illinois money for 2,000 students? Are you kidding me?” Phillips said following the three-hour hearing. “Not when Eastern Illinois University needs a $100 million life sciences center, Western (Illinois) needs something, Southern needs something.

“First, you should bring those schools up to the U of I, which seems to get a lot. It just doesn’t make sense to me.”

The proposed research institute, being promoted by Gov. Bruce Rauner and the UI, would be built south of the Chicago Loop and would be a public-private partnership known as the Discovery Partners Institute and the Illinois Innovation Network.

“If the U of I wants to build the building with their own money and without state funds and we don’t have to support it, that’s fine,” Phillips said. “I’m against spending anything until we clean up what we’ve already got.

“If they want to get all of these other corporations to donate money and to donate paying for the professors and it can be self-sustaining, I don’t have a problem with that. I’m all for that. But state funds? I am not for that.”

During appropriations hearings with administrators from SIU and EIU, Phillips asked what they thought of the $500 million set aside for the research center and the statewide innovation network.

“I always like to see higher education supported. But to give some kind of balance to it, I think that the approximately $500 million would be about the amount that would cover the top 10 requests of the universities across the state for capital improvements,” said David Glassman, the president of EIU.

‘Outmigration’ issue

In fact, the top 10 capital projects priority list advanced last month by the Illinois Board of Higher Education includes about $585 million of projects, among them a $117 million science building at EIU and $54 million to renovate the main library at the UI’s Urbana campus.

The proposed science building at Eastern would replace an 80-year-old structure.

“You have to think about what was biology in 1938. What were you training students to do in 1938 relative to where applied sciences are today?” Glassman told legislators. “Those laboratories in that building and the infrastructure in that building are to teach biology in 1938.”

And when he was asked what impact the $500 million would have if invested in projects at other Illinois public universities, Glassman said, “It would accelerate our ability and our competitiveness to curb this outmigration of students that we’re seeing at the rate we are now. It would be a great boost with the universities.”

In the fall of 2016, according to the IBHE, 35,445 Illinois students enrolled in colleges and universities in other states, compared with 78,265 who chose Illinois schools.

‘Absolutely insane’

SIU President Randy Dunn was at first reluctant to take Phillips’ bait but eventually did.

“I would say that there are a lot of questions that need to be answered in regard to that proposal,” Dunn said.

Then he noted that the UI is more successful than other state universities in shaking loose state funds.

“I would say this. We went through an exercise at SIU where we looked at every targeted appropriation that goes to the U of I — and I have a degree from there, and I’m proud of that degree, and every state needs to have its flagship, its land grant and we have a great (flagship) — but I look at every targeted appropriation that goes to the University of Illinois system, and I compare it to what SIU has as the second system in the state, and even if we had a small piece of that, it’s amazing what we would be able to do in some of these areas in delivery of services, programs, quality of life initiatives in 66 counties of Illinois where we carry the SIU flag.

“I don’t want to characterize it as taking something away from them, but we are also a big system that has wide magnitude and does a lot of things in a lot of areas, and we’d like to be able to make that argument as well.”

Phillips, once a Rauner ally, said he hasn’t talked to the governor about his concerns with the $500 million investment in the Chicago initiative.

“I’m sure he’ll hear about it,” Phillips said. “I think it’s absolutely insane, and I’m going to continue to speak out against this. There’s no reason to bond a half a billion dollars for this, a new U of I tech center, until we fix what we’ve got now.”

DPI proposal runs into opposition at legislative hearing