Setting a Context for Fiscal Year 2010 Budget Development Illinois Board of Higher Education August 2008

Overview Trends in higher education funding Illinois’ fiscal circumstances Budget issues the Board may want to consider in its FY 2010 recommendations

Trends in Higher Ed Funding FY 2009 state support for higher education is 6.4% higher than it was in FY 1994 after accounting for inflation. However . . . The increase in state funding has been uneven ISAC and SURS have experienced real gains Public Universities, community colleges (less adult ed), IBHE grants, and agencies have experienced real losses since fiscal year 1994

Trends in Educational and Related Revenues At public universities, students are contributing a much larger share of educational and related revenues in FY 2009 than they were in FY 1994 Students contributed 27.5% in FY 1994, 47.5% in FY 2009* At community colleges, students and property owners are paying a larger share in FY 2009 than they were in FY 1994 Student contributed 28.1% in FY 1994, 35.3% in FY 2008* Property taxes contributed 43.7% in FY 1994 and 45.6% in FY 2009* *FY 2009 student and property tax contributions are estimates

Recent Trends in State Funding FY08 to FY09 FY02 to FY09 Public U’s $36.5M -$109.3M CC’s (less adult ed) -$2.1M -$25.8M ISAC MAP $0.0M $13.6M ISAC All (inc. MAP+) $5.4M Grants -$24.1M -$89.9M SURS (inc. State Pension Fund) $81.0M $168.0M Total (inc. all other) $92.1M -$41.5M

Recent Trends in Capital Funding FY Request IBHE Rec Approp 2004 $1,214.0M $341.8M $111.7M 2005 $1,380.0M $341.6M $0 2006 $1,573.3M $349.9M $130.0M 2007 $1,630.5M $481.5M $2.0M 2008 $1,782.4M $607.7M 2009 $1,972.7M $805.8M ?

Illinois in a National Context Illinois’ experience over the past three years has been similar to its Midwestern neighbors Illinois’ experience has been worse than the nation over the past one, two, five, and eight years However, higher education funding in Illinois is better than several states in the current year State funding per public FTE has fallen since FY02, but remains above the national average Illinois is losing ground in affordability, as are most other states

State Revenues *Estimate based on March CGFA estimate and FY08 year-end revenues

Challenges Slow economy, rising unemployment Pension funds Medicaid Other Health Programs K-12 funding Transportation Capital Uncertainty caused by energy prices

FY 2009 Recap The Board adopted an investment-level budget that prioritized the following for FY 2009: Faculty and staff salaries for competitiveness and affordability Personal Services for Universities, utilities for Universities Base operating and equalization for Community Colleges Expanded Adult Education and CTE Affordability through MAP and Veterans Grants Capital renewal Data integration Expansion of nursing programs Student Success grants and Career and College Readiness Reducing costs of GED testing for students and testing entities

Budget Recommendations and the Public Agenda Important to align the Board’s budget recommendations with the Public Agenda Four Goals of the Public Agenda Institutional core capacity Funding focused on attaining specific outcomes More to follow – please attend the Public Agenda Task Force meeting this afternoon