October 7, 2010
Consistent with the principle of transparency, we feel it is timely to provide you with another update on UIC's budget environment. We aim for candor in these messages, and it is hard to avoid conveying some concern about what the future will bring on the financial front. Nevertheless, we would be remiss if we did not start by pointing out certain very positive developments. We can take comfort in the fact that demand for our programs is very high, as student enrollment this Fall is at its highest level ever. The recently-released rankings of doctoral programs by the National Research Council reaffirms that UIC has many programs across a broad spectrum that are in high standing among our peers. And we have ranked among the top 200 universities world-wide in the QS World University rankings. The hard work being done by all of you in the UIC family is reflected in these and many other achievements.
Unfortunately, this work is being done in a very challenging financial environment, and we cannot pretend otherwise. The State of Illinois' finances continue to be in disarray, with no signs that a resolution to the State's problems is imminent. As of September 30, the State still owed the University $33 million in funding for its FY 2010 appropriation and $210 million for FY 2011, a total of $243 million in arrears. For FY 2011, the State's direct appropriation to the University of Illinois is $697 million, a $46 million (6.3%) reduction from FY 2010. Given the cash flow problems we have experienced to date, the reductions already imposed, and the clear gap that still remains in the State budget, we cannot be sure what net funding will be realized from the State. Consequently, we will have to continue to plan in a climate of uncertainty. With that in mind, President Hogan asked the campuses to develop plans for an additional 15% reduction in GRF, beyond the 6.3% reduction in FY 2010.
At UIC, deans and vice chancellors had already been instructed to implement additional cost reductions by the end of this fiscal year equal to 5% of current budgets. These cost reductions will allow units to address a significant part of the reductions that the President anticipates. There is no doubt that an additional reduction in our State appropriation – on top of what we have already absorbed – will have serious consequences on our already-stressed budget and underfunded programs. Nevertheless, prudence dictates that we prepare plans for that eventuality.
In keeping with our mission of providing access to excellence and success, we must strive to keep our costs of attendance as low as possible. While this is always a general goal, we will give it additional emphasis this year. Tuition and fee revenues cannot be anticipated to grow at recent rates in FY 2012.
With constraints on two major funding sources – tuition and GRF – the campus must examine its current base of activities to ensure they are conducted as efficiently and effectively as possible. Two separate efforts are underway. First, following on the work of the University-wide Administrative Review & Restructuring (ARR) committee, campus committees have been chartered to examine administrative functions at UIC. The goal here is to identify cost savings by streamlining and eliminating redundancies. Efforts are also underway to examine alternative organizational structures, again with the goal of realizing efficiencies and cost savings. The president and the Board of Trustees expect all campuses to embrace and implement the recommendations of the ARR report.
Second, given the magnitude of the reductions the State might impose and the fact that a majority of our expenses are connected with academic programs, the Academic Directions Task Force is reviewing all academic departments and several large interdisciplinary institutes and centers. For each academic unit, the Task Force will review its quality, its centrality, its impact, and its resource base. This process provides the opportunity to review the design of the academic enterprise and to achieve a sharpened focus to help us prepare for the decades ahead.
We have asked these groups to accelerate their work so that their findings and recommendations can be incorporated into FY 2012 budget planning. We will keep you all apprised of our progress and further planning activities in the coming months.
More information about budgeting at UIC can be found at: http://www.uic.edu/uic/about/leadership/budget.shtml. We encourage you all to contribute your own ideas about ways to address the budget challenges that we face at: http://www.uic.edu/index.html/budget_ideas.shtml. UIC and its special missions will endure. UIC has and will continue to manage its finances in such a way that it continues to thrive. We remain confident that by harnessing the talent and experience represented by the faculty, staff, and students here at UIC, we can emerge from these challenges, well focused and strong.
R. Michael Tanner
Provost and Vice Chancellor for Academic Affairs
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