To: All Faculty & All Academic Professionals & All Civil Service Staff &
           All Undergrad Students & All Grad Students <everybody@illinois.edu> 
    From: "uipres@uillinois.edu" <uipres@uillinois.edu>

Reply-To: uipres@uillinois.edu
 Subject: MASSMAIL - presmail

January 22, 2002


Dear Colleague:

As you learn more about the financial difficulties we face as a nation, as 
a state, and as a university, I hope you will keep in mind that we are 
rich in the most important resource needed to help us weather this tough 
time:  our superb faculty and staff. And so it is to you that I turn today.

Our resilience is great. We have managed our way through cuts, recessions, 
and rescissions before.  This is not to understate the seriousness of a 
midyear cut of some $34 million (about 4 percent) into the existing 
state-supported part of our budget; it is our deepest cut in more than 25 
years. Nor should we understate the negative impact of that cut carrying 
into the FY03 fiscal year plus having to pay for "unavoidables"--such as 
Medicare, hikes in property and liability insurance, operations and 
maintenance for new space, and utility-price increases. Our calculation of 
the FY03 problem today--assuming our cuts are permanent--tops $40 million, 
or about 5 percent of our state appropriation. And the Illinois economy 
has not yet turned around.

We discussed these issues at length with our Board of Trustees last week 
and talked with them about how we will manage. We said then that we believe
that our students, who gain so much in earning power and other benefits 
from a University of Illinois education, should pay one-fourth of the loss 
and that painful internal reallocation will cover the remaining
three-fourths.

I am sharing with you today a statement of principles that will guide the 
chancellors, provosts, and other leaders as they approach the wise 
management of spending reductions for both this year and next. Two 
concepts, "quality" and "local control," are central to how we will 
accomplish what we must. You have my assurance that, as with all important 
matters, collegiality and consensus will prevail, but all will be held 
accountable.

Here is how we will approach difficult choices that must and will be made.

We will reexamine what is most central to the mission of this university, 
what must be protected, and where investments should be made.  The 
decisions will be made carefully in consultation with campus leaders and 
faculty. They will be based on our shared values and collective vision. We 
cannot afford to cut spending across the board or declare a moratorium on 
new-program development and initiatives. We must continue to move forward 
by capitalizing on new opportunities and ideas in ways that have played 
such an important role in making our university the great institution it 
is today. And we will.

But we also must be realistic.  To address these serious budget cuts we 
will have to reduce faculty and staff numbers through attrition, reduce 
some services, curtail some remodeling, reduce facility maintenance, and 
scale back or delay important academic program expansions. Inevitably this 
will lead to increased class sizes and may result in loss of momentum in 
significant new initiatives such as those in economic development, 
genomics, nanotechnology, and information technology. But that is the 
reality of the environment we face.

The following guiding principles will help the chancellors and other 
University of Illinois leaders manage the spending reductions for both this
year and next:

(1) The university will maintain its fiduciary responsibilities where laws,
rules, or regulations require. Examples: auxiliary operations where bond 
covenants exist; the hospital and clinics where Medicare/Medicaid and 
third-party payor requirements apply; research funded by federal, state, 
or industry contracts; and gifts restricted by donors.

(2) Quality will drive all decisions.

(3) We will insulate services to our primary clients, namely our students 
and patients. Our highest priority is to protect the quality of our 
undergraduate education programs. In particular, we will ensure that 
undergraduates can schedule classes so they can graduate on time.

(4) The university will plan for FY03 by anticipating a second difficult 
budget year. I want to be certain that we have sufficient resources to 
meet unavoidable spending increases for insurance, utilities price 
increases, and key academic programs such as the UIS Capital Scholars 
Program.

(5) We will protect the university's highest priorities, over time, 
although some key projects may be delayed in the short term.

(6) And once the Board of Trustees has approved the general boundaries for 
addressing these serious budget challenges, we will support decentralized 
decision-making that permits the chancellors, provosts, deans, and 
department heads to make the appropriate local judgments to best meet our 
education, research, and outreach objectives.

These principles are important guideposts, but the hard work of 
restructuring both this year's and next year's budgets requires good will 
and forbearance among the University of Illinois family.  We are important 
citizens in a strong state and so have to work through our share of 
Illinois's difficulty. This is not an easy task, but we surely are up to 
it.

Thank you for your help.

James J. Stukel
President
uipres@uillinois.edu
This mailing approved by:
The Office of the President

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