Some uncertainty regarding the state’s budget appropriations has been removed as the Illinois General Assembly approved a $35.7 billion budget last week that provides $93,189,500 to NIU – a decrease of $223,100 (0.24 percent) from last year. The budget bill awaits the signature of Gov. Quinn. While this relatively flat appropriation offers a bit of a reprieve from the 21 percent state appropriation reduction NIU has undergone in the last dozen years, we still face significant fiscal challenges.
We are thankful for the operating support we get from Springfield; however, the state budget reductions in recent years have resulted in a budget that now depends on more than 55 percent of its revenue being generated by enrollment in terms of tuition, fees and room-and-board revenue. With rising tuition compensating for appropriation reductions, slow economic recovery and a variety of recruitment and retention factors, our enrollments have also declined over the last decade. For the coming academic year, we are projecting that those revenues could be down by as much as $20 million.
Last Thursday, at the NIU Board of Trustees meetings, NIU Interim Chief Financial Officer Nancy Suttenfield presented an overview of the current financial situation and preliminary fiscal year 2015 operating budget recommendations. In this presentation, she also laid out some options for an auxiliary capital budget using amounts borrowed previously that must be used exclusively for non-instructional facilities. As we endeavor to redesign the programs and activities of our university that are supported with a much-reduced operating budget, we have the good fortune to be positioned financially to address a long list of auxiliary facility modernization and improvement needs in our residence halls, Holmes Student Center and athletics facilities such as the Convocation Center. We are working on a prioritization process for these funds to allocate them to the highest areas of need and the areas most likely to generate return on investment through revenue generation.
To address the projected operating deficit and restore equilibrium to our fiscal position, we have been working throughout the last academic year to be cautious in our hiring. This spring, Executive Vice President and Provost Lisa Freeman and VP Suttenfield developed budget principles to help us better align and allocate our resources. These principles were reviewed by university leadership, the Academic Planning Council and the Resource, Budget and Planning committees of the University Council, which endorsed them. Our budget landscape was also presented in the Bold Futures Workshops to nearly 800 members of our community over the course of the last academic year.
After an extended hiring freeze and as a growing wave of retirements was taking place, each of the vice presidents and deans this spring reviewed potential hires in their respective areas. Excellent discussions were held to discover potential collaborations and cost savings.
The next step in this process will be for me to review the proposed hires within the context of the budget revenues that are emerging from our enrollment trends and the approved state budget. I will work with senior leadership and make final determinations on three categories of hires: those that are essential and need to be released for hire now, those that are clearly not going to be approved and a gray area where we need to hold positions for now while the last details to balance the budget emerge.
These steps will be followed by development of a budget process and model. The latter will be informed by an inclusive strategic planning effort being initiated this summer. The resultant plan will then become the basis for ongoing operating and capital budget allocations in the coming year.
I am confident that we can effectively work our way through these challenges and emerge as a stronger, growing, model 21st century university. We have many important assets upon which to draw, including a talented and committed faculty and staff who should be recognized for their accomplishments. Our students are hungry for a transformational learning experience to prepare them for life beyond graduation, and our large, proximate alumni base is dedicated to helping in that endeavor. We also have many potential partners in K-12 systems, community colleges and international institutions of higher education that can help us to enhance our enrollments and to provide students with access to the amazing NIU educational experience. We have the assets we need to transform and sustain our institution, if we work collectively toward our goals.