Illinois Higher Education FY2013 Budget Recommendations

1. Illinois Higher Education FY2013 Budget Recommendations IBHE Board Presentation February 7, 2012 Dr. Alan Phillips IBHE Presentation

2. FY 2013 Budget Context(State) • Pension and Medicaid costs are exceeding the rate of State revenue growth. • The State is currently experiencing a debt crisis (Current liabilities and the backlog of unpaid bills totals $8.5B). • The State is months behind in its payments to colleges and Universities. • The State is facing potential decreases in financial aid funding for both MAP and Pell. • The Governor plans to maintain level funding for education for the next three years. IBHE Presentation

3. FY 2013 Budget Context(Colleges & Universities) • State funding for higher education has declined steadily over the last 15 years. • There has been minimal funding for capital projects, to include renovation, remodeling, maintenance, and repair. • Unfunded state mandates and regulatory requirements undermine efficiency and productivity. • Illinois’ student financial aid system has been eroded at a time when low-income families have less ability to pay for college. • Institutions often squeeze cost savings out of instruction and student support services. • The burden of financing a college education has increasingly fallen on students and families. IBHE Presentation

4. FY 2013 Budget Framework • We will continue to use the Step Level approach for the FY 2013 budget recommendations. • The FY 2013 budget recommendations will include a performance funding component. • The budget recommendations will support the goals of the Public Agenda. • Maintaining core capacity, deferred maintenance, MAP, and funding for grants will remain a priority. IBHE Presentation

5. FY 2013 Budget Priorities IBHE Presentation

6. FY 2013 Budget Recommendation(Step One) • Flat or Level Budget - $2.1B total • At Public Universities 0.5% of the base($6.5M) is re-allocated based on the performance funding model. • At Community Colleges, $720K is re-allocated based on six performance measures. • Note: At Step One and all subsequent Steps, the recommendations include SURS funding at the certified amount ($1.4B). An increase of $422.3M. IBHE Presentation

7. FY 2013 Budget Recommendation(Step Two) • Restoration Budget – Increase Funding to FY11 Levels - $34.1M or 1.6% Increase over Step 1. • Includes $15.0M (1.2%) restoration for public universities; 100% to be allocated based on performance funding. • Includes $17.2M for the Monetary Award Program and $1.0M for Student to Student grants (ISAC). • Includes restoration funding for the University Center of Lake County, Quad Cities Graduate Study Center, administration for ICCB, IBHE, and SUCSS, and funding for DFI program grants. IBHE Presentation

8. FY 2013 Budget Recommendation(Step Three) • Increase $82.1M or 3.9% (2.3% Increase over Step 2) • $33.7M for public universities; includes $19.4M for performance funding, $12.9M for deferred maintenance, and $1.3M for centralized administration. • $7.8M for Community Colleges; including $3.0M for performance funding and $4.8M for Community College Base Operating Grants & Equalization Grants. • $1.3M for Adult education and CTE. • $33.5M for the Monetary Award Program. • $360K increase for DFI; $120K for Cooperative Work Study. • $1.0M for State Matching Grants and $250K for Baccalaureate Completion Grants. IBHE Presentation

9. FY 2013 Budget Recommendation(Step Four) • Increase $125.6M or 6.0% (2.1% Increase over Step 3) • $54.5M for public universities; 50% or $25.9M for performance funding. • $12.5M for Community Colleges; includes $4.0 million for performance funding, $8.5M for Community College Base Operating Grants and Equalization Grants. • $50.0M for MAP and $2.0 million for Illinois Veterans Grants. • Additional funding for DFI, Work Study grants, IMSA, and Baccalaureate Completion grants. IBHE Presentation

10. FY 2013 Capital Improvements • Capital renewal funding provides critical support to protect the state’s capital investment. • Improving campus facilities helps schools attract, recruit, and retain students. Support for library projects, and science labs, and other campus facilities address multiple goals of the Illinois Public Agenda. • Last Year, the Board approved a new capital project list for FY2012 and indicated support for Illinois Jobs Now! projects. • However, there was no Capital Bill in FY2012, and the FY2013 project list is nearly identical to the FY2012 list. • To date, nearly $800M in Illinois Jobs Now! higher education capital funds have been released. • We expect $75M in private capital grant funds to soon be released. • As of Fall 2011, the deferred maintenance backlog was $3.6 B. IBHE Presentation

11. FY 2013 Capital Improvements • FY2013 capital recommendations total nearly $1.6 Billion and include: • Support for the Release of Illinois Jobs Now! Projects. • $340M for capital renewal. • $1.2B for capital projects at public universities, IMSA, and community colleges (31 community college projects). • $48M for escalation and emergencies. IBHE Presentation

12. Summary • The FY 2013 Higher Education Budget Recommendation focuses funding on the goals of the Illinois Public Agenda. • The recommendation also allocates a portion of the funding to colleges and universities based on performance in accordance with Public Act 97-320 (HB 1503). • The recommendations feature an investment level (or step) approach utilized since FY 2009. • The recommendations offer realistic scenarios that are sensitive to the state’s uncertain fiscal environment. IBHE Presentation