Baker Report: Budget Update

When I last wrote to you April 4 about our budget deliberations, I promised to communicate again before the end of the month where we were in the process.  This note will serve to deliver on this commitment.

Yesterday my cabinet and I sought feedback from the university’s Resource, Space, and Budget Committee and Academic Planning Council regarding our FY18 budget proposals, which include strategies that strive to meet the differential spending reduction goals that I set for each division.  These reductions, amounting to approximately $15 million, will enable us to meet the $35 million goal to maintain a modest working capital reserve throughout Fiscal 2018. The remaining $20 million is expected to come from increases in central revenue generation and expense reductions.

Our Division of Research and Innovation Partnerships (RIPS) was the only area not asked to make any cuts; however, division leadership still found places to trim, and will reinvest those savings back into additional research activities.  The preservation of our RIPS budget underscores our commitment to the success of our faculty and their pursuit of excellence in all aspects of our academic mission, particularly research, scholarship, artistry and innovation.  Key to our budgeting process was adherence to our core prioritization principles, which include academic and operational excellence and, of course, Student Career Success.

A number of themes emerged from the proposals of our other divisions, including my own. I see a continuing commitment to improving process efficiency, reviewing contracts to identify opportunities for savings, deferring purchases and maintenance, setting tighter cost controls, engaging in long-range planning and finding potential areas to create synergy and reduce redundancy through increased consolidation and collaboration. We are optimistic about opportunities that may result from these organizational changes.

Unfortunately, as we have previously discussed, there are personnel implications. As I wrote April 4, NIU no longer can rely on attrition alone to relieve our personnel cost pressures. However, because leadership worked diligently to find additional cuts in non-personnel areas, staff reductions will not be deep or as widespread as we initially anticipated.  Some of our colleagues already know about the impact of the reductions on their individual employment. Others will hear about the status of their jobs in May.

Regrettably, the last three weeks have brought us little in the way of clarity from Springfield, where I traveled Tuesday to testify before the Senate Appropriations II Committee.

Lawmakers again assured me that they understand our plight and that they want to help us, as well as the rest of public higher education. However, they tell me that they remain handcuffed by the current political climate in Illinois.

Legislative stopgap measures, such as the one that provided us with some financial relief in Fiscal 2016, are in discussion. Meanwhile, other legislators continue to talk about the so-called “Grand Bargain” proposed by the majority and minority leaders in the Illinois Senate.

Given this murky picture, we must continue to plan for adequate working capital without the likelihood of getting sufficient dollars from the state this year, and be prepared to make additional budget adjustments throughout the coming fiscal year should it be necessary.

I will continue to update you and provide more details as our planning solidifies in the coming weeks.  As always, I appreciate your patience and commitment to NIU.

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