State budget cuts proposed by Gov. Pat Quinn in his budget address last week could have the largest impact on faculty salaries and benefits, University officials said.

Randy Kangas, associate vice president of the Office for Planning and Budgeting, said under Quinn’s proposal, which the Senate will review March 21, about $15 million would be cut from the approximately $238.3 million the state provides the Urbana campus. He said the funding currently generated by the University is $1.965 billion through tuition and student fees.

“This would lift the total amount of the reduction since about 2002 to about $214 million in direct appropriation,” he said. “With that said, the state provides us pensions and benefits through another agency, and that certainly helps the University a lot.”

Kangas was referring to the State Universities Retirement System, which funds pensions for University faculty, who have a “constitutional guarantee to that payment.”

If the pension system runs out of funds, Kangas said pensions would only become more expensive for the state because they would likely have to adopt a “pay as you go” system, which would be more expensive than the current system. 

He said he agreed with Quinn’s statements in the budget address about how the pension system must be fixed before the state’s fiscal situation can improve.

“The state clearly has a budget or revenue problem,” Kangas said. “Today the state has about $9 billion in unpaid vouchers. One major part of the budget is benefits and pensions; certainly the state is in a very critical period.” 

Quinn called for reform of the pension system’s $96.8 billion total unfunded liabilities during that budget address March 6.

“Our budget is being squeezed more than ever. And that will continue until we put a stop to it,” Quinn said.

In fiscal years 2010 and 2011, the state had to borrow to make its payments to the pension fund. From fiscal years 2011 to 2014, the state’s scheduled contribution increased by $1 billion each year. 

According to the Institute of Government and Public Affairs’ Illinois Report 2013, at this rate, including pension obligation bonds, state tax revenue will fund one-fourth of pension costs.

Quinn, in his address, said he is trying to avoid putting an extra burden on taxpayers.

“I know this issue requires a hard vote,” he said. “But you know that every day you wait to vote on this matter — the problem gets worse. It is costing taxpayers an additional $17 million a day. Illinois taxpayers are losing patience with your lack of action.”

And until a budget proposal is voted on, the effects of potential cuts are unknown and predictions are hard to make.

“I think it’s too early to tell what the impact will be until we get a little further down the road,” Kangas said. “Certainly the Illinois House and Illinois Senate are going to weigh in on their thoughts on the appropriation process and what the number is.”

Chrissy can be reached at [email protected].