The Illinois State Board of Higher Education has indicated that a 12.5 percent cut in state funding to state universities may be foreseeable in the next year, University spokesman Tom Hardy said.

“Nothing has been settled or determined yet,” Hardy said. “This is a possibility. It would have a broad impact if it happens, but it is important to say that it is very preliminary.”

The potential cut to the University’s funding would come as a result of the expiration of a temporary income tax increase that is set to end in January, Hardy said.

In Fiscal Year 2014, the University is set to receive $647 million from the state of Illinois, the same total as FY2013. With a $647 million appropriation, a 12.5 percent cut would mean the University would lose out on $80 million annually.

Over the past five years, the appropriation has dropped from $697 million to $647 million, a $50 million, or seven percent, decrease. Revenue from state appropriations accounts for 14.5 percent of the University’s overall budget.

In his address to the Urbana-Champaign Senate on Monday, Roy Campbell, Senate Executive Committee chairman, discussed steps senate leaders and administration will take to counter potential budgetary difficulties, specifically in regard to pension reform costs and cuts to state funding. Campbell emphasized the importance of shared governance in this process.

“It is not necessarily possible that we can give you our instant comments on this, because sometimes it can get very complicated, but those discussions do exist,” he said to faculty senators. 

Chancellor Phyllis Wise also addressed concerns about pension and state funding in her remarks to the senate.

“It is very important to consider in the face of the uncertainties related to the pension that the administration is working really hard to try and figure out ways that we can have fringe benefits that are very comparable and competitive with our peers,” Wise said. “The possible sun setting of the income tax that was supposed to happen at the end of 2014 is something that we have to plan for and make sure that we have accommodations to deal with that very substantial cut in our budget.”

The University will know whether the cut in state funding will be occur in May after the governor and state legislators decide whether to extend the temporary tax increase.

The State Board of Higher Education does not have a final say regarding the income tax but plays an advisory role in the decision.

“The State Board of Higher Education does planning and recommendations and develops budgetary parameters to the governor,” Hardy said.

MaryCate can be reached at [email protected].