1. Fiscal Year 2012 Budget Recommendations Presented to the Illinois Board of Higher Education February 15, 2011

2. FY12 Budget Context Investment or Step Level Approach Support the Goals of the Public Agenda State Finances: Unfunded Pension Liabilities & Backlog of Unpaid Bills Higher Education Jan. 31 st Cash-Flow GOMB 3-Year Projections Loss of ARRA funding in FY11 2

3. FY12 Budget Priorities 3 Increase Educational Attainment (Adult Education, DFI, STEM Diversity - CHAMP) Ensure College Affordability ( MAP, IVG, ING) Increase Number of Quality Degrees (Baccalaureate Completion Grants, Career & Tech Ed.) Integrate Educational, Research, and Innovation Assets (Matching Grants, IMSA, Work Study Grants) Multiple Goals: Quality, Affordability, Attainment Maintain Core Capacity: Public Universities & CC Base Operating and Equalization Grants

4. FY12 Step One 4 Flat or Level Budget $2.1 B total At community colleges Base Operating Grants are increased $430,000 due to the reallocation of small college grant funds and designated grants. Note: At Step One and all subsequent Steps, the recommendations include SURS funding at the certified amount ($984.8 M). An increase of $132.6 M. Step One

5. FY12 Step Two 5 Restoration Budget to FY10. Increase $112 M or 5.3% Includes $85.3 million for public universities to replace ARRA funding. Includes $13.4 million for community college Base Operating Grants and Equalization Grants. Includes increased funding for Adult Education, STEM Diversity grants, MAP, Illinois Veterans Grants, National Guard Grants, Baccalaureate Completion Grants, and Matching Grants. Step Two Step One

6. FY12 Step Three 6 Increase $158.1 M or 7.5% (2.2% Increase over Step 2) $12.5 M for1% increase in public university salaries. $19.8 M for CC Base Operating Grants & Equalization Grants. $24.9 M Monetary Award Program. $360k increase for DFI; $369k for STEM Diversity – CHAMP. Additional funding for Adult Education, Baccalaureate Completion Grants, and IMSA Outreach and Scientific Inquiry. Step Three Step Two Step One

7. FY12 Step Four 7 Increase $205.9 M or 9.7% $24.9 M for 2% increase in public university salaries. $26.2 M for CC Base Operating Grants and Equalization Grants. $3.8 M for adult education. $49.9 M for MAP. Additional funding for DFI, IMSA Outreach, Matching Grants, Career & Tech. Ed. & Completion Grants. Steps 3 and 4 include 2% increases for UCLC, IBHE, ICCB, and SUCSS. Step Four Step Three Step Two Step One

8. FY12 Capital Improvements 8 FY11 Board Action: Support Illinois Jobs Now! projects and 2011 Planning List. To date, $400 M in Illinois Jobs Now! higher education funds released; Illinois Court of Appeals Ruling. Projects on hold for now. Fall 2010, Deferred Maintenance Backlog $3.6 B.

9. FY12 Capital Improvements 9 FY12 recommendations total $1.5 Billion Support the Release of IJN! Projects. $340.0 M for Capital Renewal. $1.1 B for capital projects at public universities, IMSA, and community colleges (32 projects). $64.0 M for escalation and emergencies. Capital renewal funding provides critical support to protect the states capital investment. Improving campus facilities helps schools attract, recruit, and retain students. Support for library projects, and science labs, and other campus facilities address multiple goals of the Illinois Public Agenda.

10. FY12 Summary 10 FY12 Recommendations focus additional funding on the goals of the Public Agenda. The recommendations feature an investment level approach utilized since FY 2009. The recommendations offer realistic scenarios that are sensitive to the states uncertain fiscal environment.