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Fiscal Year 2005 IBHE Budget Recommendations

House Appropriations – Higher Education Committee

February 5, 2004

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Context for FY2005 Budget Development

Ongoing economic/fiscal uncertainty FY 2005 deficit estimated at $1.5 to $2.0 billion All areas of state government are impacted

Recognition of the need for careful and realistic planning within the higher education system Highest priority activities and initiatives must be

protected

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FY2005 Operations and Grants Overview

Emphasis placed on: Good stewardship of existing resources and

enhanced accountability Re-directing limited financial aid resources to the

most needy students Access and economic development

Funding cut or eliminated for many important grant programs and initiatives to protect funding for the highest priority activities

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FY2005 Operations and Grants Overview (Continued)

State General Funds $2.34 billion in total Decrease of $79.8 million, or 3.3% Decrease of $38.5 million, or 1.8% without SURS

All Funds (appropriated and non-appropriated) $7.95 billion in total Increase of $159.1 million, or 2.0%

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Public Universities Recommendations: $1.30 billion

Decrease of $41,500 Assumes internal reallocation of remaining

administrative cost reductions to core mission activities ($27 million)

Related Issues 25% administrative cost reduction over three

years ($100.6 million) Enhanced fiscal accountability and transparency

(e.g., line item budgeting)

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Use of Funds From Administrative Reductions

Funds Reallocated to

Non-Personal Services Items

36%

Funds Reallocated to Personal

Services Items16%

Funds Cut as Part of Reduction in

State GRF Support48%

Total Reductions Reported to Date: $73,995,300

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Community Colleges/Adult and Career Education

Community Colleges: $283.4 million Decrease of $8.0 million, or 2.8% Includes grant line reductions and reallocations

to Formula Implementation Grants Recommended transfer of funding source for

Deferred Maintenance Grants to Capital Development Fund

Adult and Career Education: $45.3 million No change from FY2004

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Illinois Student Assistance Commission

Recommendations: $389 million Decrease of $9.4 million, or 2.4% Includes level funding for MAP Elimination of Merit Recognition Scholarship, College

Savings Bond Bonus Incentive Grants funding

Related Issues MAP formula changes to maximize program

resources for most needy students Partial shift of ISAC administrative costs to Student

Loan Fund

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Grant Programs and Statewide Initiatives

Access and Diversity: $10.1 million $967,000 increase, or 10.6% Funds included to open and operate new

University Center of Lake County facilities coming on-line in FY2005

All other programs level-funded Recommended transfer of HECA funds to

ISAC for Golden Apple program ($300,000)

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Grant Programs and Statewide Initiatives (Continued)

Workforce & Economic Development: $14.3 million Decrease of $23.5 million, or 62.1% Includes $776,000 for Opportunity Returns

initiatives Includes:

Elimination of funding for 7 programs and initiatives

Reduction of funding for Health Services Education Grants and State Matching Grants

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Higher Education Agencies IMSA: $15.8 million

Increase of $1.5 million, or 10.3% Restoration of funding cut in FY2003

State Universities Civil Service System: $1.3 million No change from FY2004

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Higher Education Agencies (Continued)

IBHE: $2.9 million No change from FY2004

SURS/Health Insurance: $272.6 million Decrease of $41.4 million or 13.2% Decreased requirement due to pension

bond proceeds received in FY2004

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FY2005 Capital Improvements Overview

Total Recommendation: $341.6 million Total requests: $1.38 billion

Regular Capital: $301.6 million Supports 30 projects All but four projects were on the Board’s

FY2004 priority list

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FY2005 Capital Improvements Overview (Continued)

Capital Renewal: $40 million Increases funding by $10 million, or 33% Provides funding to address deferred

maintenance and other minor infrastructure needs

Reflects Board’s priority on addressing deferred maintenance needs across the system.