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October 6, 2008

University of Illinois
Urbana-Champaign Senate

HE.08.13. Report on the IBHE Faculty Advisory Council Meeting, May 16, 2008.

The FAC met with at SIU-C. SIU President Glenn Poshard briefly welcomed the group and moved to state budget issues. The FY’08 budget is $900M in the red.  The governor has been persuaded to give the last payment to schools and colleges due in May and June.   SIU will retain a 2% reserve until the funding situation becomes clearer.

No legislative action to date on the FY’09 budget for higher education. After May 31 a 60% majority is required to enact anything.  Poshard believes Madigan will pass his version of the budget and leave it to the Senate and governor to act.  Poshard expects special sessions this summer to act on the budget with higher ed lucky to get a flat budget with talk of a $150M cut in higher ed funding.

Poshard and Dennis Hastert are working to develop a consensus on a capital bill that would pass the legislature and be signed by the governor. They held more than 30 meetings around the state to identify needs and possible revenue sources as well as meeting with the four legislative caucuses and the governor. They identified a large number of very urgent infrastructure needs including transportation and roads, buildings and equipment for schools and colleges, etc. Federal transportation funds of $9.3B will be lost if Illinois does not produce matching funds. The cost of infrastructure projects is rising about 10% a year.  A SIU building estimated at $42M has risen to $60M in five years.  Deferred maintenance is a huge problem: $850M at the U of I, $400M at SIU.

An increase in the state income tax and sales tax are “off the table.”  There is support for an income tax increase for the operating budget given a structural deficit; there is no support for that for a capital program.  Discussions indicated only gaming provided a basis for a capital budget.  Hastert and Poshard recognize the moral and ethical concerns associated with gambling.  But, the moral and ethical concerns of not meeting infrastructure and educational needs also must be weighed.  The bill to be introduced in the Senate will focus on public transportation needs, funding for public, private and community college building and infrastructure needs--Madigan and others are big defenders of private college needs. We must stop putting the cost of buildings and rehabbing buildings on the backs of students.  Tuition increases are closing the door to university education for the middle class students who increasingly face massive debt.

The proposal will be to lease 80% of the lottery, put slot machines at race tracks, increase the number of slot machines at existing gambling sites, and add one or two new gambling sites.   It is hoped that the group leasing the lottery will be able to increase the return.  Only two weeks exist to get the bill passed. Three caucuses have approved the proposal; the House Democratic Caucus has not. There is a huge lack of trust between the caucuses and the governor: thus, demands for guarantees of no tampering by the governor with the funds allocated.  There is no assurance there will be a capital bill this year!

Andrew Davis, ISSAC Director, began by referencing Poshard’s remarks saying “We are sunk if we don’t get that program.”  Politics in this state are at a nadir—never seen a worse climate.  “What you read in the papers is sugar-coated.”  He said higher ed has strong bipartisan support in legislature as contrasted to many other areas.

ISSAC is 51 years old and a large national player.  It administers MAP, a $400M need-based program.  Given recent legislative action, ISAAC is focusing on supporting students attending in-state.  He is concerned that private companies are making significant profits on student loans given national policy.  He stressed Pell grants need to be enhanced.  Too many of the aid programs are merit and not need based and so tend to help the wealthy the most. Programs such as those in Georgia and Indiana have yet to generate data to show they work.  Prepaid tuition programs are mostly bought by the wealthy.

MAP is a great program but needs more funding. Not only does the program cap need to be raised but also MAP runs out of money to be awarded by mid-August historically.  It is likely to run out by August 1 this year. The less economically advantaged suffer most since they are relatively the latest to apply.  ISSAC has begun a senior capstone program to provide funds for students nearing graduation who otherwise would drop out. Loans are much more likely to be repaid by those who graduate—much less so for dropouts.

Mike Lawrence, Director of the Paul Simon Public Policy Institute was the final presenter. He said the state is in the worst financial state he has seen:  huge structural deficit; the $1.5B of unpaid bill is just the tip of the iceberg.  We cling to a revenue structure of the 1960s; then a heavy manufacturing economy, now a service economy ever more so.  The governor shows a disdain for higher education. We miss the great legislative leader suppo0rt of the past. Currently the public universities lack a power base as most of their representatives are Republicans. He blames the college presidents for their failure to speak out forcefully about the needs of higher education and to oppose the governor.  It is time to mobilize alumni students and their families, and the corporate section on behalf of higher education.  We must address affordability—particularly for first generation college students.  He noted the grinding poverty in many areas about SIU.  Higher education is failing to fulfill its purpose.

In the business session, a statement on communication with legislators was adopted to be put on the website. The bylaws were modified to retain two community college members beyond the normal 3 year rotation to provide greater continuity within the limit of 12 community college members.  John Bennett, Lakeland Community College, was elected chair; Les Hyder, EIU, vice-chair; and Steve Rock, WIU, secretary.

An IBHE proposal to seek legislation allowing it to charge for profit and out-of state schools fees for processing various program applications was endorsed in principle with a request for further specifics.  The FAC endorsed the Hastert/Poshard proposal to fund capital projects with specifics of the endorsement to be developed through an email exchange. Concerns included the reliance on gambling revenues and the failure of the state to recognize the necessity of an income tax increase.  

The next meeting will be at Concordia College on June 20.

Ken Andersen
UIUC Senate FAC Representative