University Revenue Diversified, Unlike Chicago State
February 11, 2016
Chicago State University students and faculty protested the lack of a state budget on Monday in downtown Chicago’s Loop.
According to the Chicago State Office of Budget and Resource Planning, the university receives approximately one-third of their funding from the state. Without the state funds that are usually allocated into their budget, the university is facing a financial crisis.
When speaking to the Illinois Student Senate on Feb. 3, State Senator Scott Bennett, D-52, stressed the difficulties higher education institutions are facing in Illinois.
“Chicago State is about two weeks from not making payroll, and Eastern (Illinois University) is a few weeks behind that,” Bennett said.
Several reports predict Chicago State will run into a financial roadblock by March, meaning the school may shut down without state support.
“I think it’s absolutely atrocious,” said Illinois Student Body President Mitch Dickey. “It’s been eight months since the state has had a budget, and we’re seeing that problem translate to the students and to the people of Illinois.”
While President Timothy Killeen said the lack of a budget is causing reputational and operational damage to the University of Illinois, smaller schools like Chicago State University cannot operate much longer without state funds.
According to the 2015 University of Illinois annual report, the University had an operating budget of $5.64 billion.
Sandy Street, director of budget planning at the University, said the state funds about 32 percent of the University’s budget, combining the direct appropriation given for operating expenditures, as well as funds directed at the total budget.
However, unlike Chicago State, the University has a broader revenue base.
“We are a much different school,” Street said. “We’re a ‘Research I’ institution. We have a very diversified portfolio. Our diversity of revenues is much greater than a place like Eastern or Chicago State.”
A university that is classified as a “Research I” institution receives $40 million or more in federal support annually, and makes research a priority.
The University also has a pool of large endowments to lean on if public dollars continue to be scarce.
Endowments represent money or other financial assets that are donated to universities and then invested.
According the University of Illinois Foundation website, the current combined endowment of the University of Illinois is $3.3 billion.
Killeen continues to promote an agreement with the state where the University would receive a three-year budget, as long as the University meets certain metrics, such as graduation and retention rates.
However, Dickey said the University may need to find a strategy that ensures financial stability while relying less on the state.
“Students are doing what they need to do,” Dickey said. “They’re going to school, they’re studying — and our legislators can’t do their job and pass the budget.”