Illinois Colleges Besieged by Cuts as Budget Fight Trickles Down

  • Six-month plan doesn’t make up for nearly a year without aid
  • Several schools have bonds downgraded; students leaving state

For Illinois’s colleges and universities, the end of a record-long political fight over the budget isn’t bringing the financial consequences to a close.

Southern Illinois University, with about 17,000 students, is eliminating a quarter of its graduate teaching assistant jobs when classes resume next month and is letting 50 faculty positions go unfilled at its main campus. At Chicago State University, enrollment is projected to tumble after the lack of state funds pushed it to the brink of closing this year. And just as Governor Bruce Rauner enacted a six-month spending plan last month, Moody’s Investors Service downgraded more than $600 million of bonds sold by six public universities because of the lingering uncertainty.

“The politics in Illinois are interfering with a lot of our opportunities,” said Moosa Kamran, a 19-year-old biomedical major who quit his research job at Southern’s campus in Carbondale because it couldn’t guarantee he’d be paid. “I’m really worried about it.”

Colleges and universities are among the hardest hit by the clash between the Republican governor and the Democrat-controlled legislature, which has drawn a line against curbs on labor unions, property taxes and workers-compensation laws that Rauner has sought to pass along with the budget. Contending with deficits left when temporary tax increases expired, the two sides remained mired in an impasse until late last month, when they agreed on a temporary spending plan to carry the government through half of the year.

While the measure provided $1 billion for higher education, college presidents say they’re using that to pay bills left over from the last school year, when they had to manage for months without any state funds at all. As a result, the stop-gap deal effectively leaves them with little left when students return.

Steve Brown, a spokesman for House Speaker Michael Madigan, a Democrat, defended the agreement, saying it providing more for higher education than earlier proposals from the governor. Catherine Kelly, a Rauner spokeswoman, blamed Democrats for years of failing to fund colleges and universities adequately, adding that economic growth is needed to provide the support they deserve.

“The situation is tremendously frustrating,” said Randy Dunn, president of Southern, who faults state politics for the decline in enrollment in the coming school year. He said rivals in states including Missouri, Kentucky, Indiana and Tennessee as seeing an influx of Illinois students. “To some degree, this budget crisis in the state does cut our legs out from under us.”

Southern’s main campus in Carbondale, about 332 miles (534 kilometers) south of Chicago, is expecting the number of students to drop as much as 5 percent, compared to recent losses of about 2 percent to 3 percent, according to Dunn. Its Edwardsville campus projects more students but at a slower rate: about a 1 percent increase, compared to a 3 percent to 5 percent jump in recent years, he said.

“Every week, every month we go without a budget is a missed opportunity to attract graduate students,” said Johnathan Flowers, a doctoral candidate at Southern and president of the graduate student union. “A lot of graduate students are in a situation where they don’t know if they’ll be able to afford continuing their education in the spring or the fall because they don’t know if they’ll actually have a job.”

Chicago State University, which declared financial exigency in February to allow for emergency budget cuts, has already eliminated more than 300 jobs and is bracing for enrollment to drop by about 20 percent this year, according to the Chicago Tribune. Because of its financial strains, the Higher Learning Commission, which accredits universities in the central U.S., put the school on notice last month that its certification may be revoked. Sabrina Land, a university spokeswoman, wasn’t available to comment.

The toll is tarnishing other schools’ standing on Wall Street. On June 30, the same day Rauner enacted the budget, Moody’s cut Eastern Illinois, Governors State and Northeastern Illinois universities, all of which have junk ratings. It also downgraded debt issued by Southern, Illinois State and Northern Illinois. All six -- as well as the University of Illinois -- have negative outlooks from Moody’s, indicating more cuts may follow.

On Tuesday, S&P Global Ratings lowered Western Illinois University two steps to BBB-, one step above junk, citing “severe challenges” because of lower state funding.

“We still would be very concerned about the overall fiscal and financial picture for most of the universities in the state,” said Dan Heckman, a senior fixed-income strategist in Kansas City at U.S. Bank Wealth Management. “Enrollment from what we’ve heard has been hurt by this financial indecision at the state level and the lack of financial funding and support from the state.”

Beyond students, the crisis has made recruiting and retaining faculty more difficult. Northeastern Illinois estimates it’s lost about twice as many employees as usual in the past year. Sharon Hahs, who is retiring as president of the university in September, said she wants the board to postpone a national search for her permanent replacement for fear that the budget crisis would scare off top-notch candidates.

“You have a lack of stability,” said Hahs. “You have the message that Illinois does not value public higher education, and doesn’t see its future in educating its citizenry. Folks don’t want to come.”

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