Fiscal Year 2010 Budget Recommendations Presented to the Illinois Board of Higher Education January 27, 2009

FY10 Budget Context  FY09 Revenue Forecast  State Deficit and Backlog of Bills  Pension Requirements  Federal Stimulus Bill Proposals 2

FY10 Investment Budget  Alignment with the Public Agenda  Six investment levels demonstrate how the State can achieve its higher education goals at different levels of state funding  Recognition of the declining health of the international economy and its effects on state revenues and other State priorities 3

FY10 Budget Priorities 4 Increase Educational Attainment Ensure College Affordability Increase Number of Quality Degrees Integrate Educational, Research, and Innovation Assets Maintain Core Capacity

FY10 Operations & Grants 5 Maintain Core Capacity Public Universities Faculty and Staff Salaries Deferred Maintenance Utility Costs Community Colleges Base Operating Grants Equalization Grants Illinois Mathematics and Science Academy Faculty Salary Initiative Utility Costs

FY10 Operations & Grants 6 Increase Educational Attainment Community Colleges College and Career Readiness P-16 Grants Adult Education Adult Ed GED Testing Career and Tech Ed Institutional Grants/Initiatives Diversifying Faculty in Illinois Baccalaureate Completion Grants University Center of Lake County P-20 Initiatives Longitudinal Data System P-20 Council IMSA Expansion to New Areas

FY10 Operations & Grants 7 Improving College Affordability Public Universities Reallocations Maintain Core Capacity Community Colleges Reallocations Maintain Core Capacity ISAC Reallocations MAP IIA Dependent Grants

FY10 Operations & Grants 8 Increase Number of Quality Degrees Public Universities Core Capacity Community Colleges/Adult Education Core Capacity Institutional Grants/Initiatives u.Select Baccalaureate Completion Grants UCLC

FY10 Operations & Grants 9 Integrate Educational, Research, and Innovation Assets Public Universities Core Capacity Community Colleges/Adult Ed Core Capacity Workforce Development Grants Career and Tech Ed Institutional Grants/Initiatives Nursing School Grants Nurse Educator Fellowships State Matching Grants Health Education Cooperative Work Study

FY10 Step One 10  2.5% decrease: -$55 million  Reduction consistent with FY09 reserves, but includes student aid programs  Reallocation of $9.5 million add-ons  Reduced state support for universities and community colleges  Reduced support for adult education  Slight increase for MAP due to IVG  No Workforce Development Grants  Diminishes state support for all aspects of the Public Agenda  Does not reflect increase for SURS ($250 million) Step One

FY10 Step Two 11  1.0 % decrease: -$22.1 m  $9 million increase for MAP  Decrease for university operations  Increase for CC Base Operating Grants  No Workforce Development Grants  Diminished state support for all aspects of the Public Agenda  Does not reflect increase for SURS ($250 million) Step Two Step One

FY10 Step Three 12  0% increase  Reallocation of add-ons  Community college Base Operating Grants increase 1% by reallocation  ICCB Workforce Development Grants funded  MAP increases by $13.2 million, thus covering changes in cost resulting from federal actions Step Three Step Two Step One

FY10 Step Four 13  1.1% Increase: $24.1m  Faculty and Staff Salaries  Base Operating Grants  MAP -- $17.5m over FY09  u.Select, data systems  Baccalaureate Completion Grants  IMSA salaries and utilities Step Four Step Three Step Two Step One

FY10 Step Five 14  2.7% Increase: $59.5m  Faculty and Staff Salaries  Deferred Maintenance  Base Operating & Equalization  P-16 Grants  College and Career Readiness  Adult Ed  MAP -- $20.9m  IIA -- $3.0m  Matching Grants  u.Select, Data, P-20 Council  Baccalaureate Completion Grants  High-Need Health  IMSA Deferred Maintenance Step Five Step Four Step Three Step Two Step One

FY10 Step Six 15  5.5% Increase: $120.7m  Faculty and Staff Salaries  Utility Costs  Deferred Maintenance  Base Operating & Equalization  P-16 Grants  College and Career Readiness  Adult Ed  MAP -- $29.7m; IIA -- $6.0m  Matching Grants; High-Need Health  u.Select, Data, P-20 Council  Baccalaureate Completion Grants  IMSA salaries, utilities, new sites Step Six Step Five Step Four Step Three Step Two Step One

FY10 Capital Improvements 16  $890.7 Million Recommended  Requests Total $2.3 billion  Capital Renewal: $90.0 million  Highest priority  Regular Capital: $567.1 million  34 projects; all have appeared in previous IBHE recommendations  $233.6 million Opportunity Returns projects  6 projects with some funding already released

FY10 Summary 17  Focus on the highest priorities developed in the Public Agenda  Reallocate to higher priorities  Investment levels  Sensitive to uncertain state fiscal environment