To: All Faculty & All Academic Professionals & All Civil Service Staff
           <everybody@illinois.edu> 
    From: "President B. Joseph White" <presidentwhite@uillinois.edu>

Reply-To: presidentwhite@uillinois.edu
 Subject: University Budget Outlook and Actions

To:    University of Illinois Community
From:  President B. Joseph White 
       and Interim President-designate Stanley O. Ikenberry
Re:    University Budget Outlook and Actions


The University of Illinois has been dealing with budget reductions and 
uncertainties for some time. We can't wave these away. Like many other 
public and private research universities around the country, we continue 
to confront them. A deep national recession, a weak Illinois economy and 
serious state financial problems create the challenge. 

During the past decade, the University has been subject to multiple 
rescissions and cuts in our appropriation from the state. In fiscal year 
2002, the University's state general fund appropriation was $804 million. 
By fiscal 2009, that amount was down to $700 million after accounting for 
a $19 million rescission and a redirection of $24 million annually to 
cover part of our health care costs previously paid by the state. This is 
a reduction of 13%, excluding inflation, or 30% in real terms.

The University's net general fund appropriation from the state for the 
current fiscal year is $719 million, including $45 million of federal 
stimulus funds. As of November 2, 2009, the University has billed the 
State for $317 million of the current fiscal year 2010 appropriation. We 
have received very little of that amount. The result is significant cash 
flow problems that we continue to manage. 

Whether the Governor and General Assembly will make downward adjustments 
to our current budget is unknown and may not be known for several months. 
Given this possibility, however, we must take steps now to manage as 
prudently as possible. At the beginning of the year the University put 
funds in reserve centrally in anticipation of difficult budget challenges 
ahead. We must now make further contingency plans to sequester an 
additional 6%, or $45 million, of the fiscal 2010 general fund 
appropriation. 

We have asked Campus and University Administration leaders to develop the 
plans guided by these principles:

  > Safeguard academic and patient-care quality, serve students and 
maintain externally funded research programs. 

  > Identify organizational changes and consolidations that will yield 
longer-term savings.

We do not plan furlough days before the end of the calendar year and we 
hope they can be avoided completely. It will be necessary, however, for 
departments, colleges and administrative units to manage any  hiring on a 
critical needs, by exception basis for the remainder of the 2010 fiscal 
year that ends next June 30. Campus and UA leaders will determine the 
methods for managing personnel costs while reducing overall expenditures. 

Virtually every public university in America faces similar challenges. For 
Illinois, the state economy is expected to remain weak and state revenues 
may decline further. Federal stimulus funds that are an important part of 
the fiscal 2010 budget are not expected to recur in 2011.  

We face difficult choices to position the University for a genuine 
recovery down the road. We intend, for example, to implement a plan to 
reduce administrative costs at the campus and UA levels by a total of $15 
million over the next three years. Other organizational and program 
changes across the University will be analyzed and considered.

We know that living with uncertainty is not easy. Yet it is far from clear 
when state policymakers will craft a plan to address the state's fiscal 
crisis and what the implications of the plan will be for state programs 
and services, including higher education. Securing a stable and high 
quality future for the University of Illinois is our top priority and a 
challenge we all share. We appreciate your understanding, cooperation and 
support during these difficult times.



This mailing approved by:
The Office of the President

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