FY 2019 IBHE Budget Recommendations: By the Numbers Nyle Robinson Deputy Director for Fiscal Affairs & Budgeting

Impact of the Past: Budget Impasse and Since FY 2002 We strongly urge everyone to review the individual stories of universities coping with the budget impasse

HE $ Not What It Used to Be: 52.9%, 49.0%, 54.7% Funding for operations has declined since FY 2002 Inflation eroded the buying power of state funding, unfunded mandates cut into real, available funding even more FY 2018 appropriations are equal to only 52.9% of FY 2002 $ 49% for public universities 54.7% For community colleges Does not account for the FY 2016 partial budget

No Clear Enrollment Winners During the Budget Impasse Only UIUC & UIC saw enrollment gains during the impasse ISU essentially flat All other public universities collectively drop 13.2% Community colleges drop 7.5% Not-for-profit & for- profit privates experienced declines Funding stability needed to rebuild confidence in all sectors Illinois Fall Undergraduate Enrollment by Sector Number & % Change Fall Enrollment Enrollment 15-17 % 2015 2016 2017 15-17 Change Change All Public Univ. Enrollment 143,614 139,470 136,209 (7,405) -5.2% UIUC & UIC 50,943 51,854 53,403 2,460 4.8% Illinois State 18,427 18,643 18,330 (97) -0.5% All Other Public Univ. 74,244 68,973 64,476 (9,768) -13.2%   Community Colleges 317,192 303,896 293,533 (23,659) -7.5% Private Not-for-Profit 131,886 131,232 129,407 (2,479) -1.9% Private For-Profit 49,744 47,315 46,844 (2,900) -5.8%

Bond Ratings: 9-0 Record to 2-7 Prior to impasse all public universities had investment grade bond ratings During the impasse all universities saw ratings fall Only the U of I & ISU have investment grade ratings now Since the budget passed there have been some tentative rebounds Standard & Poor's University Credit Ratings Points in Time During Budget Impasse October 27, 2015 August 5, 2016 July 24, 2017 Syst. Rev. Outlook Rating Chicago State NR Eastern Illinois A- Negative BB B+ Stable Governors State BB+ Illinois State A+ A Northeastern Illinois Northern Illinois Southern Illinois BBB+ University of Illinois AA- Western Illinois A1 BBB- BB- Positive Moody's Rating Baa1 Baa3 Ba2

Less than Half a Loaf in FY 16: -$1.2 B, -$852 M, -$201 M FY 16 funding was generally less than 30% of FY 15 funding Overall that was a $1.2 B cut in higher education operations funding Public universities lost $852 M Community colleges lost $201 M Institutions could not cut that much & definitely not that quickly Most of the reductions had to be pulled out of cash balances, which like any business are needed to maintain health of the organization & educate students.

FY 2019 Higher Education Budget Recommendations

Additional General Revenue Requested Request Summary: $254.4 M Additional General Revenue Requested Item/Purpose $ 254,432,475 Maintain Buying Power $ 31,352,000 Monetary Award Program $ 100,000,000 Illinois Veterans Grants $ 19,921,300 Illinois National Guard Grants $ 11,343,700 SURS Pensions $ 67,558,000 Comm. College Health Insurance $ 257,475 ISAC FFELP Replacement $ 4,000,000 Emergency Capital Funding $ 20,000,000

Maintaining Buying Power: $31.4 M * In addition to direct reductions in funding since FY 2002, including a 10% cut for FY 2018, higher education buying power has been eroded by inflation Unfunded mandates have further reduced buying power Institutions have increased tuition to try to maintain services & quality Increasing price competition issues were worsened by the bad news about the budget impasse Public universities in particular cannot realistically raise tuition & fees to make up for continued dwindling state funding Buying power stability is critical if public universities and community colleges are to recover their reputation & gain back Illinois students * Distributed between public universities, community colleges, IBHE, IMSA, & SUCSS

MAP: $100 M ($501 M Total Request) MAP covers much less than it once did MAP covered 100% of public university weighted T & F in FY 2002 MAP 32% of public university T & F in FY 2018, 66% for community colleges & 13% for private C & U ISAC projects MAP will only cover 43.7% of eligible applicants in FY 2018 College is more expensive & students are more likely to be low income and need additional financial aid Increased MAP is critical to luring Illinois students back to Illinois colleges & universities

Illinois National Guard Grants: $11. 3 M Illinois Veterans Grants: $19 Illinois National Guard Grants: $11.3 M Illinois Veterans Grants: $19.9 M Public universities & community colleges are required to waive tuition & fees for Illinois National Guard members & qualified veterans ISAC once was allocated money to reimburse them but since FY 2012 it has been an unfunded mandate The burden on schools has grown as state funding has declined ICCB has funding to help some colleges for whom this presents the greatest burden The burden falls most heavily on schools hit by enrollment declines Many veterans can also access a federal post-9/11 benefit Returning to ISAC funding would help both schools & veterans & would be a tool to help draw students back to state schools

ISAC Operations: $4 M ISAC has long funded state operations from the proceeds of its federal loan servicing business In 2010 the program changed to direct loans & ISAC only services existing loans, which have been declining sharply, thus so have revenues An important fee also was cut by 60% The federal government could take their remaining loans back at any time Revenues will fall by more than half between FY 2017 & FY 2019 ISAC needs funding to continue their state mandated responsibilities ISAC also has requested funding to cover their Outreach programs ($4 M)

Emergency Capital: $20 M With no capital funding in most years since FY 2004 & declining state support, the deferred maintenance backlog has ballooned Schools now struggle to even address emergencies Special funding is needed to help address health & safety emergencies & to avoid the need to interrupt services $20 M will not fully address the identified areas of concern

State University Retirement System: $67.8 M SURS spending is dictated by state law for both pension fund contributions (+$67.6 M) & community college health insurance (+$257,475) FY 2018 pension fund contributions will be higher than the appropriation by state law because the certified amount for FY 2018 is higher * 74.9% of pension contributions go for unfunded past liabilities & increase in that area for FY 2018 exceed the total increase for the year Contributions for current employees (normal costs) actually are declining Distribution of State Certified SURS Pension Contributions $ in Thousands   Normal Costs State Total Net % Past FY Total Employee State Expenses Certified Past Liability Liability 2017 $ 703,138 $ 283,520 $ 419,618 $ 16,087 $ 1,651,426 $ 1,215,721 73.6% 2018 $ 689,456 $ 285,632 $ 403,824 $ 16,690 $ 1,629,308 * $ 1,208,794 74.2% 2019 $ 676,719 $ 278,992 $ 397,727 $ 17,316 $ 1,655,543 $ 1,240,500 74.9%

Capital Request: $1.5 B FY 19 Capital Facility Replacement Cost Chicago State $ 469,890,847 Eastern Illinois $ 976,221,241 Governors State $ 265,091,804 Illinois State $ 1,653,080,712 Northeastern Illinois $ 442,425,062 Northern Illinois $ 4,320,958,145 Southern - Carbondale $ 2,077,485,749 Southern - Edwardsville $ 1,036,630,331 Southern - Medical School $ 260,195,734 U of I - Chicago $ 5,628,108,992 U of I - Springfield $ 443,884,069 U of I - Urbana-Champaign $ 7,750,801,501 Western Illinois $ 754,144,909 Public University Total $ 26,078,919,096 Illinois Math & Science Acad. $ 192,413,200 Univ. Center of Lake Co. $ 31,553,678 Grand Total $ 26,302,885,974 Given the long drought in capital funding, a $1.5 B request would be a modest investment in maintaining the states $26.3 B public higher education infrastructure $1.5 B will only partially address the $5.5 B in deferred maintenance Includes $475 M for capital renewal Community Colleges - $132 M Public Universities - $334 M IMSA - $8 M Includes $1,034 M for regular capital Public University - $979 M IMSA - $7 M Escalations & Emergencies - $48 M Does not include Community Colleges