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Legislative update: New report expects state’s unpaid bills could climb to $35B in five years

February 6, 2012
Lori Clark

Lori Clark

In Springfield …

On January 30, 2012, the Institute for Illinois’ Financial Sustainability at the Civic Federation issued a report, “State of Illinois FY2013 Budget Roadmap: State of Illinois Budget Overview, Projections and Recommendations for the Governor and General Assembly.”

The report states that, “given rising Medicaid and pension costs and the scheduled partial sunset of the income tax increase, the Civic Federation’s analysis shows that Illinois’ unpaid bills could rise to $34.8 billion by the end of FY2017.”

This has very real consequences for everyone at NIU.

Our budget and pensions website tracks the state’s unpaid obligations to NIU, and you should check this site regularly for updates. This report has received considerable media attention, and it has also captured the attention of the members of the Illinois General Assembly. We expect that it will receive considerable attention as we begin the state’s appropriations process for FY2013.

Gov. Pat Quinn delivered his State of the State message Wednesday, Feb. 1, to the Illinois General Assembly. Despite the release of the Civic Federation’s report, Quinn called for more state spending when he outlined his Illinois Jobs Agenda for 2012.

This agenda calls for three targeted tax cuts:

  • to permanently abolish Illinois’ natural gas utility tax (anticipated cost of $164 million annually);
  •  to establish a child tax credit for parents raising children (approximately $100 per family of four, or approximately $130 million annually); and,
  • an employer tax credit for hiring returning veterans.

Quinn also called for a significant increase in Monetary Assistance Program funding so more students can pursue a college education, as well as for a major investment in our classrooms so they can have modern labs, smart technology, digital books, high-speed Internet access and 21st century efficiency and investing more funds in early childhood education programs.

He praised Lt. Gov. Sheila Simon’s recent report, including reform recommendations, and called on the General Assembly to implement these reforms in the coming year. There was only a passing reference to the need for Medicaid and pension reform, but he said that those needed to be done this year.

There was widespread concern among members of the General Assembly and the media around not the substance of the speech, but how the State of Illinois, given its precarious fiscal condition and backlog of unpaid bills, would be able to afford new programs that would require additional state investments.

The governor’s Budget Address to the General Assembly is scheduled for Wednesday, Feb. 22, and we will carefully analyze how he proposes to pay for the Jobs Agenda he proposed in his State of the State speech.

House Bill 3873, introduced by Rep. Luis Arroyo, has been scheduled for hearing Tuesday, Feb. 7, before the House Committee on Higher Education.

This bill repeals the provisions that permit the children of employees of a state university who have been employed by any one or more than one state university for an aggregate period of at least seven years to receive a 50 percent tuition waiver. I will attend this hearing on behalf of NIU and will register our opposition to this bill. An update on the status of this bill will be provided next week.

On Saturday, Feb. 4, the governor appointed seven members to the Illinois DREAM Fund Commission. This commission was created by legislation signed into law last year. A not-for-profit entity will be created to raise private funds to establish a scholarship program for immigrant students.

In Washington, D.C. …

Several federal agencies are beginning to schedule briefings on their FY2013 budget requests, including the Department of Energy, the National Science Foundation, the U.S. Geological Service and the National Oceanic and Atmospheric Administration. The APLU Council on Government Affairs is sending representatives to these briefings and will provide us with updates which we will share with our campus community.

Photo of signs in an airportAs promised in his State of the Union message, President Obama is beginning to propose a series of administrative changes designed to implement policies that have been stalled in Congress.

As part of the Startup America Initiative, he has proposed changes in the immigration system in an attempt to attract and retain more highly skilled global talent.

Proposed changes include:

  • Expanding eligibility for 17-month extension of optional practical training (OPT) for F-1 international students to include students with a prior degree in Science, Technology, Engineering and Mathematics (STEM);
  • Allowing additional part-time study for spouses of F-1 students and expand the number of Designated School Officials at schools certified by the Department of Homeland Security to enroll international students;
  • Providing work authorization for spouses of certain H-1B holders;
  • Allowing outstanding professors and researchers to present a broader scope of evidence of academic achievement; and,
  • Launching Entrepreneurs in Residence initiative.

President Obama also has been talking more about his thoughts on college costs in recent speeches, expanding on his State of the Union address.

Several of our national membership organizations, including APLU, have been trying to follow this issue and speak on behalf of higher education about some of the concerns with the president’s recommendations – notably how difficult it is for institutions to contain net tuition increases when state governments provide insufficient appropriations.

Clearly, higher education affordability and access will be key issues in the upcoming election, and while it is unlikely that any new legislation will be passed before the election, we will be keeping a careful eye on this discussion.

The Voices section of NIU Today features opinions and perspectives from across campus. Lori Clark is director of State and Federal Relations for NIU.