Campus Update: Crafting our final FY2018 budget

As promised, I am closing the loop on our discussion of the Fiscal Year 2018 budget and the steps we are taking to increase revenues and decrease expenditures to ensure that we have appropriate working capital reserves to support our operations in FY18.

Last month, I laid out a goal of creating a modest reserve of $35 million. Approximately $20 million of that amount will come from central adjustments such as increased support from the NIU Foundation and the reexamination of all university operating budgets. The remaining $15 million will come from revenue enhancements and expense reductions in other divisions.

These actions were required by the extraordinary financial circumstances in which we have been forced to operate. Over the course of the past three fiscal years, we have experienced a $125 million shortfall in funding from the State of Illinois, which has put extreme pressure on our financial sustainability and has already resulted in significant reductions in operating budgets. This latest budget exercise was based on the assumption that we will receive no further funding (or MAP money) during this fiscal year, and that we will face continued uncertainty regarding future state funding.

Despite these unfavorable circumstances, I am pleased to note that we have been able to achieve our reduction goal while preserving anywhere from 89 percent to 100 percent of our divisional budgets.

I appreciate the hard work that has been undertaken to identify opportunities for revenue enhancement, as well as areas of cost-cutting, in a manner that sustains and furthers our mission of teaching, research, artistry and outreach. The spirit of teamwork and collaboration demonstrated across the institution has impressed me. My thanks go out to our entire staff and faculty who, despite laboring in the midst of persistent uncertainty, continue to provide transformative learning experiences for our students every day while creating and sharing new knowledge.

I believe that it is important to note that most of the $15 million in budget adjustments came from categories other than staff reductions. Many of these adjustments were made through deferral of projects, reduction or elimination of purchased services, and finding synergies among operations and functions. Such efforts have been a hallmark of our budget reduction activities over the past two fiscal years.

As a result, while we are reducing total staff positions by more than 150, most of these reductions will again be achieved through attrition, retirements and either deferral or elimination of open positions.

About 30 of the position eliminations will affect current employees. Of that number, about 23 are civil service employees, many of whom will transition to open positions across the university or exercise their civil service employment rights within their classifications. The remainder are Supportive Professional Staff whose contracts will not be renewed. In each instance, the university is following all personnel procedures and contractual obligations regarding minimum notice of non-reappointment, bumping rights and other applicable requirements.

As of today, most, if not all, of these employees have been notified. We are committed to assisting and supporting those individuals as they search for other positions to further their careers. A full list of resources is available on the human resources website.

Going forward, our senior leaders will continue to manage their divisions prudently and make further adjustments as dictated by prevailing circumstances that might emerge from factors such as the state budget situation and enrollment.

I deeply regret the impact our decisions are having on those individuals whose positions are being eliminated. The individuals affected are members of our NIU family, and we are grateful for their service. Unfortunately, the dramatic decline in state support over the last three years forces us to make these difficult choices.

We believe these actions are measured and appropriate given the continued uncertainty in Springfield and our enrollment challenges. We are hopeful that a resolution in Springfield will come, and we will be spared the need for further actions. However, because of the severity of our current circumstances, and the uncertainty of our fiscal future, it is unlikely that any last-minute legislative action will mitigate the need for the changes outlined here.

Doug Baker
President

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