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

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


Dear Colleagues:

With the recent conclusion of this year's spring session of the Illinois 
General Assembly, we now have a much clearer picture of the challenges we 
face as we prepare the budget for fiscal year 2004.

The new executive and legislative leadership teams in the state capital 
were confronted with the most severe financial problems this state has 
experienced in several decades. Accordingly, the University of Illinois 
pledged to do all we could to shoulder responsibility for our share of 
this problem. It is, therefore, not surprising that the budget outcomes 
for the U of I included significant reductions in general fund 
appropriations in both FY 2003 and FY 2004.

Shortly after assuming office and with revenues declining and 
expenditures growing, Governor Rod Blagojevich asked public universities 
to return as much of their FY 2003 appropriations as possible without 
disrupting academic programs. The University of Illinois responded by 
returning $29 million in state appropriations in the fourth quarter of 
this year. This rescission followed a general fund reduction in FY 2003 
of $48.7 million from FY 2002. The actual loss of state appropriations 
going from FY 2002 to final FY 2003 appropriations totaled $77.7 million, 
or a reduction of nearly 10 percent. In addition, the university was 
required to absorb another $24.9 million payment in FY 2003 for health 
insurance costs, as it did in FY 2002.

The stage thus was set for the just-concluded legislative session, in 
which the governor and lawmakers set out to erase a projected $5 billion 
state budget deficit.

The operating budget appropriations for the state's public universities 
for FY 2004, which begins July 1, are largely those included in the 
governor's recommended budget. For the University of Illinois, the 
governor recommended, and the General Assembly passed, a general fund 
appropriation of $696.9 million--a $58 million reduction from the FY 2003 
original appropriation and $106.7 million less than the FY 2002 
appropriation.

The General Assembly passed capital appropriations at the governor's 
recommended levels for Repair & Renovation, providing a total of $10.7 
million for the three University of Illinois campuses. Notably, the 
General Assembly added $2 million that was not included in the governor's 
recommended budget for planning for the Lincoln Hall remodeling project 
at UIUC. Other good news includes the fact that reappropriations for 
continuing projects such as the College of Medicine research building at 
UIC, the Siebel engineering facility, the National Center for 
Supercomputing Applications, the Post Genomic Institute, the incubator 
building, Chemical Sciences at UIUC, the UIS classroom-office building, 
and the state survey projects were also included in the capital budget, 
allowing work already under way to continue to move to completion.

In summary, the extraordinarily severe financial problems facing the 
state resulted in operating and capital appropriations for the University 
of Illinois that were substantially lower than what we had hoped for as 
we prepared our budget request last summer. Nevertheless, the governor 
and legislature's tax-dollar support will enable the University of 
Illinois to continue to pursue our missions of education, research, 
service, and economic development. Further, we will strive to maintain 
the quality that has been the hallmark of the University of Illinois 
despite the diminution of state support.

High quality distinguishes our three campuses and makes the U of I one of 
the best universities in the nation. The challenge always is to keep our 
edge in the face of diminished resources, and we accomplish this through 
a dedicated faculty and staff and efficient management. I am confident 
our university has the leadership and spirit to persevere in these 
difficult times.


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

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