STATE OF ILLINOIS

APPROVED FEBRUARY 6, 2018

STATE OF ILLINOIS BOARD OF HIGHER EDUCATION

FISCAL YEAR 2019 HIGHER EDUCATION BUDGET RECOMMENDATIONS OPERATIONS, GRANTS, AND CAPITAL IMPROVEMENTS

PRESENTED BY THE STAFF TO THE ILLINOIS BOARD OF HIGHER EDUCATION

February 2018

Printed by Authority of the State of Illinois 12/17-50

Fiscal Year 2019 Higher Education Budget Recommendations

TABLE OF CONTENTS

Major Highlights for Fiscal Year 2019 Budget Recommendations ...........................................3

History and Recommendations Summary Tables .......................................................................5 Table 1: Higher Education Operations and Grants, General Funds ................................................5 Table 2: Higher Education Operations and Grants, All Funds........................................................6 Table 3: higher Education Operations and Grants, Other Appropriated Funds...............................7

Justification for Requested Fiscal Year 2019 Funding Increases ..............................................9 Maintaining Buying Power: Stopping Long Decline in State Support and the Budget Impasse ....9 Monetary Award Program: Promoting Affordability, Equity, and Illinois Higher Education ......10 Illinois Veterans (IVG) and National Guard Grants (ING): Win-Win-Win..................................13 State Pension Funding: Increase for Past Liabilities, Not Current Employees .............................15 Emergency Capital: Minimal Funding to Address the Worst Emergencies..................................16 Illinois Student Assistance Commission Operations and Outreach: Maintaining Service............18

Sector and Agency History and Recommendation Tables........................................................21 Table 4: Universities Operations and Grants, General Funds .......................................................21 Table 5: Fiscal Year 2019 Performance Based Funding Set-Aside ..............................................22 Table 6: Community College Operations and Grants, Appropriated Funds .................................23 Table 7: Adult Education and Postsecondary Career and Technical Education ...........................24 Table 8: Illinois Student Assistance Commission .........................................................................25 Table 9: Illinois Mathematics and Science Academy ...................................................................26 Table 10: State Universities Civil Service System........................................................................27 Table 11: Illinois Board of Higher Education Operations.............................................................28 Table 12: Illinois Board of Higher Education Grants/Special Initiatives......................................29 Table 13: State Universities Retirement System ...........................................................................30

Recommendations Summary Narrative by Sector ....................................................................31 Public Universities .........................................................................................................................31 Community Colleges ......................................................................................................................32 Adult Education and Postsecondary Career and Technical Education...........................................33 Illinois Student Assistance Commission ........................................................................................33 Illinois Mathematics and Science Academy...................................................................................34 State Universities Civil Service System .........................................................................................35 Illinois Board of Higher Education Operations..............................................................................35 Illinois Board of Higher Education Grants/Special Initiatives .......................................................36 State Universities Retirement System ............................................................................................41

Capital Improvements .................................................................................................................43 Higher Education Capital, Deferred Maintenance, Renewal Needs ..............................................43 Table 14: Summary of Higher Education Capital Requests and Recommendations ....................49 Table 15: Higher Education Capital Improvement Priority List ...................................................50 Table 16: University & IMSA Emergency Critical Infrastructure & Life Safety Projects ...........52 Capital Improvement Projects: Institutional Detail .......................................................................53

Additional Supporting Information............................................................................................69 IBHE Statutory Requirements .......................................................................................................69

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Benefits from Investing in Higher Education ................................................................................69 Impact of the Budget Impasse and the Danger of a New Impasse .................................................70 Fiscal Year 2019 Recommendations and the Public Agenda ........................................................75 Appendix A: Performance Funding...........................................................................................77 Appendix B: Budget Impasse: Impact on Public Universities and Their Response.............81 Chicago State University................................................................................................................83 Eastern Illinois University..............................................................................................................86 Governors State University ............................................................................................................88 Illinois State University..................................................................................................................90 Northeastern Illinois University .....................................................................................................92 Northern Illinois University ...........................................................................................................94 Southern Illinois University ...........................................................................................................97 University of Illinois ....................................................................................................................106 Western Illinois University...........................................................................................................113 Appendix C: Glossary of Higher Education Terminology ....................................................117 Appendix D: Historical Illinois Higher Education Budget Data...........................................133 Table D-1: State General Funds Appropriations, 2000-2018......................................................135 Table D-2: Public University Undergraduate Tuition and Fees, 2009-2018...............................136 Table D-3: Public University Graduate Tuition and Fees, 2009-2018........................................139 Table D-4: Public University Professional Tuition and Fees, 2010-2018...................................142 Table D-5: FY 2018 Community College Tuition and Fees by District .....................................145 Table D-6: City Colleges of Chicago Tuition and Fee Rates ......................................................146 Table D-7: Monetary Award Program (MAP) Award Values, 1995-2017 .................................147 Table D-8: Monetary Award Program (MAP) Number of Awards, 1995-2017 .........................148 Appendix E: Illinois Jobs Now! Capital Projects ...................................................................149 Appendix F: Public University Deferred Maintenance and Capital Pictures......................157 Appendix G: Description of Bond Ratings..............................................................................163

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Item #II-1 February 6, 2018

FISCAL YEAR 2019 HIGHER EDUCATION BUDGET RECOMMENDATIONS FOR OPERATIONS, GRANTS, AND CAPITAL IMPROVEMENTS

Submitted for:

Action.

Summary:

This item recommends approval of the Fiscal Year 2019 Budget Recommendations for higher education operations, grants, and capital improvements. The Fiscal Year 2019 Budget Recommendation is utilizing last year's basic format providing one comprehensive proposal to the Board.

Action Requested:

That the Illinois Board of Higher Education approve the Fiscal Year 2019 Budget Recommendations for operations, grants, and capital improvements.

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Item #II-1 February 6, 2018

FISCAL YEAR 2019 HIGHER EDUCATION BUDGET RECOMMENDATIONS FOR OPERATIONS, GRANTS, AND CAPITAL IMPROVEMENTS

Major Highlights for Fiscal Year 2019 Budget Recommendations

SUMMARY: The Illinois Board of Higher Education (IBHE) acknowledges the state's fiscal difficulties but also recognizes its obligation to promote a state budget that facilitates a strong higher education system in Illinois that helps promote the four goals of the Illinois Public Agenda for College and Career Success. Therefore, these recommendations request a modest increase of $254.4 million to assure public higher education can maintain their current buying power as well as a small number of targeted increases. Even with the recommended increases the total general fund request is still lower than the total funding provided to the higher education system for Fiscal Years 2015 and 2017.

Maintain Buying Power, $31.4 Million ? Higher education is the only major sector of the state budget that received less funding in Fiscal Year 2018 than it did in Fiscal Year 2002. Accounting for inflation and unfunded mandates added since Fiscal Year 2002, higher education operations Fiscal Year 2018 buying power is only 52.9 percent of what it was in Fiscal Year 2002 dollars. For public universities it is only 49.0 percent. This request is to provide the higher education system at least enough funding to be able to maintain their Fiscal Year 2018 level of buying power. This will help public universities and community colleges rebuild their programs and repair reputational damage caused by the budget impasse.

Monetary Award Program (MAP), $100 Million ? MAP was the only program of the higher education budget that received additional funding for Fiscal Year 2018. However, by historic standards MAP funding remains low, covering fewer students and less of their tuition and fee costs than it did historically. The requested increase will help improve educational attainment by reducing accessibility gaps by socioeconomic status and improve college affordability, particularly for underrepresented groups. Increased MAP funds appropriated in a timely manner will help draw students back to Illinois college campuses.

Illinois Veterans Grant (IVG), $19.9 Million and Illinois National Guard Grants (ING), $11.3 Million ? Until Fiscal Year 2010 funding was provided to the Illinois Student Assistance Commission (ISAC) to reimburse public universities and community colleges for waivers of tuition and fees for Illinois Veterans and National Guard members as required by law. Partial funding was provided in Fiscal Years 2011 and 2012 to certain community colleges, but none since then. This is an unfunded mandate on universities and community colleges at a time when other state funding has been declining. Fewer veterans have been availing themselves of this benefit because of a similar federal program passed in the wake of 9/11. Restoring funding to these programs would help universities and community colleges recover from the steep cuts in state funding and also make it more financially advantageous to them to aggressively recruit veterans, which also will draw in more federal funding.

ISAC Program Operations, $4.0 Million ? ISAC operations and support programs have long been supported by federal loan management revenues but the federal program changed in 2010 and ISAC no longer services new loans. They have continued to service old loans but federal revenues have fallen sharply. ISAC netted $30 million in Fiscal Year 2017 and that is expected

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to be just $14 million in Fiscal Year 2019. There also is the possibility that the federal government could pull back the remaining loans entirely at any time. ISAC has warned for years that there would be a time when federal funding would no longer be available to cover agency costs. It appears that time has come. Without this funding ISAC would not be able to adequately manage its state mandates. Emergency Capital Funding for Institutions, $20 Million ? Public universities and community colleges' deferred maintenance needs have ballooned to over $5.5 billion. The steady decline in state operations funding has limited the capacity of institutions to even address emergencies. The budget impasse resulted in a sharp decline in the bond rating of public institutions. This makes bonding for repair costs prohibitive. The cost to address already identified health and safety projects at public universities alone exceeds even this request. State University Retirement System (SURS) Pension Contributions, $67.6 Million ? This increase in appropriation is to match the $1,655,543,000 certified state contribution as required by state law. The increase actually is only $26.3 million because the certified contribution for Fiscal Year 2018, which the law mandates be paid, is $41.3 million higher than the appropriations included in Public Act 100-0021. Community College Retiree Health Insurance, $257,500 ? This increase in funding to the State University Retirement system is required under the State Employee Group Insurance Act of 1971.

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