Senate Executive Committee meets to hear budget
February 4, 2014
Mike Sandretto, chair of the Urbana-Champaign Senate’s budget committee, conveyed the state of Illinois’s contribution to the University’s budget at the Senate Executive Committee meeting Monday.
“There is not a chance the state can pay this off,” Sandretto said. “We have no insurance. The courts may say you can change the (pension) plan — it doesn’t matter. There is no money. It is going to zero.”
Sandretto was referring to the increase in unfunded pension liabilities for the University. With University assets increasing at a much slower rate than the decreasing funds from the state, the amount underfunded will continue to grow. In 2013, only 41.5 percent was funded, which left the amount unfunded at just over $20 billion.
“With the new pension rules, that $20 billion will go down to $12 billion,” Sandretto said.
Senate members called this diagnosis “sobering,” nervously laughing about alternatives that might aid the situation. When Executive Committee Member Matthew Wheeler suggested selling off state assets, Sandretto said that the only asset they have left to sell is the University itself.
“We’ll buy it,” Educational Committee Policy Chair Gay Miller joked.
“The state has changed the pension plan, which reduces what we have to pay out to people, so the liability is going to go down,” Sandretto said. “You can argue it is a moral obligation, but the money just isn’t there.”
The state, however, has increased the amount that it paid back to the University in the past year. By Feb. 3 last year, the state had left $500 million unpaid, but by Feb. 3 this year, the state left $355 million unpaid. But Sandretto pointed out that state finances continue to hurt the University.
“Our financial statements will probably be the weakest of any major research university in the country,” Sandretto said. “So the pension is a disaster, basically.”
Based on the length of time that the committee felt should be dedicated to the budget, SEC members moved for the discussion to be postponed until a later full senate meeting instead of the February 10 meeting for which it had originally been scheduled. The resolutions and reports scheduled to go through the full senate on February 10 were thought to take up too much time.
Some of the issues on the agenda include nominations for membership on standing committee in the senate, nominations for honorary degrees, discussion of campus safety and a number of other proposals. The SEC also approved the movement to move the revision to the Election Rules for the Student Electorate to a later meeting, at Student Body President Damani Bolden’s request.
“We are moving kind of fast from the academic student standpoint,” Bolden said. “We are still trying to figure out the best way of replacing student senators because we don’t want USSP to have any say in who our senators are, and that is a notion we are trying to figure out and a notion that was just brought to me.”
The meeting ended with further elaboration on law suits being filed against pension legislation. John Kindt, Chair of the Senate Committee on Faculty and Academic Staff Benefits, mentioned that it was legally possible for these law suits to help overturn pension legislation.
“Anything can happen,” Kindt said. “If the bill is declared unconstitutional, then we are right back under the old system. They could, however, give the opinion itself in dicta — where they think the bill failed.”
Without directly overturning the bill, the legislature would have the ability to make adaptations on the bill and move forward with new legislation.
MaryCate can be reached at [email protected] and @marycate_most.