To: All Faculty & All Academic Professionals & All Civil Service Staff
           <everybody@illinois.edu> 
    From: "Chancellor Cantor and Provost Herman" <chancellor@uiuc.edu>

Reply-To: chancellor@uiuc.edu
 Subject: MASSMAIL - Budget Outlook

Dear Colleagues,

As you know there is much discussion nationally about mounting state 
deficits. In Illinois, the State is projecting a deficit of more than 
$4 billion.  We will not know what our State budget will be for next year 
until after the Governor presents his budget address on April 9, but we 
want to share with you what we do know at this point and what steps we are 
taking.  

In March and April, the General Assembly will hold hearings on next year's 
higher education appropriations.  In preparation for those hearings, we 
have been asked to consider how we would absorb cuts of 5% to 10% from 
this year's State appropriation.  Cuts of this magnitude would mean 
reductions to our campus of from $15 million to $30 million, not counting 
other needs.  In a letter to all Illinois public universities, the Chair 
of the House Appropriations Committee said, "While we hope reductions on 
this scale will not be necessary, we need to be prepared for this 
possibility."  

Some weeks ago we began the process of planning how to absorb further cuts 
while continuing to provide the services that make our campus uniquely 
valuable to the people of Illinois:  superb education for our students; 
the ability to produce major scientific and scholarly achievements; 
engagement with the economic advancement, cultural life, and societal 
issues of our State and nation.  We have asked each of the Vice 
Chancellors, Deans, and Directors to propose strategies that are 
consistent with this goal.  Their task will involve consultation with unit 
heads and with us as the campus strategy takes form over the next few 
weeks.

As we approach planning for next year, we need to recognize that all 
public universities and other state services are in the same 
circumstance.  We will all be asked to bear our share of the burden.  As 
we benefited from unprecedented levels of State support in 2000-01 and 
2001-02, so must we now deal with reduced State funds in ways that 
continue to support what is special about our university, the things that 
drew us here and lead students to seek admission in record numbers.

Coming on the heels of this year's budget cuts, the task will not be 
easy.  Nor will it be impossible.  Major economies will have to be made, 
and some of them will be painful.  We will identify areas where 
reorganization of activities or responsibilities can free resources to 
invest in our critical missions, our people, and our future.  The steps we 
ultimately take will be formulated in a responsible, principled way, and 
our institution will continue to be a university of which we and the 
people of Illinois will be proud.  

When we wrote to you last winter as we were preparing for this year's 
budget cuts, we indicated that budget reductions would be guided by 
institutional priorities and values.  In the departments, the colleges, 
and at the campus level we made difficult decisions which we believe 
served the institution well.  Thanks to the cooperativeness, dedication, 
and willingness to pitch in by all, this year has seen notable 
achievements.  Our research enterprise is more vital and productive than 
ever.  Annual expenditures on research and development now exceed $350 
million, and indirect cost recoveries generated by research grew during 
the last year by $4.5 million, or 7.3%.  This year we greeted an 
outstanding and diverse group of 180 new faculty colleagues, of whom 40% 
are women and 26% are members of underrepresented minorities.  The quality 
of education we provide to our students has continued, the number and 
qualifications of students who seek admission are higher than ever, and 
new scholarly initiatives have been pursued, several with the help of 
foundation funding.  Our commitment to core assets such as graduate 
fellowships and the library continues unabated.  In short, the principles 
that guided our strategies for absorbing this year's cuts served us well, 
and they will continue to do so. 

The unfolding financial prospects for FY2004 will present tough challenges 
for our stewardship of this great university. We have many aspirations and 
responsibilities.  Foremost among our needs is to find a way to provide a 
salary program for faculty and staff, who after all are the heart of the 
quality of education and intellectual contributions that come from this 
campus.  The process of consultation and planning our approach for next 
year has begun.  Your participation and support in planning with your unit 
heads will be essential to success again this year.  

We will of course keep you informed and involved as the State budget 
develops and our plans begin to take shape.

Cordially,

Nancy Cantor			
Chancellor

Richard Herman
Provost  
This mailing approved by:
The Office of the Chancellor

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