CHICAGO – Public universities are worried about making payroll and depleting their schools’ reserves as Illinois’ financial condition worsens because the state isn’t giving them the money they’ve been promised, officials said Tuesday.
The presidents and chancellors of 12 public university campuses have sent a letter to Gov. Pat Quinn and Comptroller Dan Hynes asking them to set a payment schedule so they can collect the more than $735 million in state payments owed them.
“I am worried from payroll period to payroll period, which is every two weeks, whether I’m going to make payroll,” Northern Illinois University President John Peters told reporters in Chicago.
The overdue payments are a result of a growing state deficit that likely will reach $13 billion this year. The state is limping through the fiscal year by borrowing money and leaving bills unpaid, including a backlog of unpaid state appropriations.
The schools said lawmakers approved a general revenue budget for the fiscal year that gave universities nearly $1.4 billion to pay for things such as salaries, libraries, utilities, maintenance, equipment and supplies. They say they have billed the state for nearly $1.1 billion of that but have collected only $335 million.
NIU, which is scheduled to get $107 million from the state this year, is still owed more than $60 million, Peters said. The DeKalb-based university is depleting its reserves at an “alarming rate” and living on money it collects in tuition, Peters said.
Hynes’ office, which issues the checks to pay the state’s bills, said the backlog of unpaid bills is $3.6 billion because revenues are lower than expected and the state spends more money than it brings in.
“We’ve tried to work with the universities to address payment emergencies as we have with those who provide goods and services across this state who are waiting months and months to be reimbursed,” Hynes spokeswoman Carol Knowles said in a statement.
A spokeswoman in Quinn’s budget office said they were working with the universities to “explore payment options,” including possibly borrowing money.
To cope with the lack of state funds NIU has frozen hiring, is putting off replacing equipment unless essential and postponing purchases until absolutely necessary, Peters told the Daily Chronicle.
Other universities have cut budgets, imposed furlough days or frozen salaries to conserve cash. At the University of Illinois, which is owed $431 million, employees have taken 4 percent pay cuts this year and Ikenberry has said tuition will likely be raised at least 9 percent this summer to help the school get by.
Peters said the presidents felt speaking in a collective, unanimous voice through the letter would bring attention to the issue. The presidents feel some sort of revenue enhancement is needed, Peters said, and will help the state craft and support whatever sort of tax increase is proposed by Springfield.
“That takes courage,” Peters said of proposing a tax increase, which he said needs to come sooner rather than later. “It takes bipartisanship, and it takes courage.”
Interim U of I President Stanley Ikenberry said an income tax increase was the most obvious remedy for the state’s financial problems, but even that won’t be enough.
“The hole that Illinois has managed to dig for itself is so deep that it’s not going to be able to cut its way or tax its way out of the hole,” Ikenberry said. “It’s going to take a combination of both.”
Quinn, a Democrat, has proposed raising the income tax rate but lawmakers were reluctant to support it before the Feb. 2 primary. He has predicted they will pass one later this year.
The two Republicans locked in a tight race to face off against Quinn have vowed to fight any effort to raise the income tax before the November election.
A slim margin of votes separated state Sens. Bill Brady of Bloomington and Kirk Dillard of Hinsdale after last Tuesday’s primary, and neither will declare victory or concede until all absentee and outstanding ballots are counted.
• Daily Chronicle News Editor Kate Schott contributed to this report.