SIU System President Glenn Poshard spoke to a large audience of faculty, staff and retirees Wednesday in Southern Illinois University Edwardsville’s Meridian Ballroom. The topic was tuition and fees, pension reform and the state’s budget woes.
Southern Illinois University President Glenn Poshard met with a nearly packed house in the SIU Edwardsville Meridian Ballroom on Wednesday to talk about the Edwardsville campus budget, the state pension plan and whether or not proposed tuition and fee changes for fiscal year 2014 will be approved next month.
For more than 2 hours, Poshard talked about the state’s budget woes, the uncertainty of the State University Retirement System’s future pension allocations, and whether a quorum will attend the May 9 board meeting, and whether that quorum will approve a pro-tem chairman and approve next year’s proposed tuition and fees.
According to Poshard, the top issues facing higher education in the state of Illinois, and SIUE, are:
- Declining student enrollment
- Higher tuition and fees for students and families
- A lack of cash flow from the state
- The state’s negative credit rating and need for pension reform
- An increased level of scrutiny by the state and federal government
- And greater competition for university housing.
“We not only have declining state appropriations over the last few years,” Poshard said. “We also have a cash flow problem. The state hasn’t paid the University on time. It is still owed 74 percent of state appropriations that have been delayed or promised. The amount is so severe that we need to figure out a contingency.”
Poshard noted the tension that exists between the SIU Board of Trustees and the governor’s office has made it a difficult time for the University to pursue ways to meet the financial challenges it faces.
About Governor Patrick Quinn, Poshard said, “He has refused since November to meet with myself or the Metro East delegation. We need to pass the tuition and fees at a minimum at this next board meeting. We’ve never been in a position where we couldn’t do business. The board either is going to have to agree to elect a pro-tem chair or the governor will have to have three new members appointed. I think there’s some progress being made here. The final arbitrator is the governor and we don’t know where he stands.”
A modest increase to tuition and fees would provide some of the relief the University needs to meet its budgetary obligations, Poshard said. He noted that while the Board of Trustees has asked for more, a 4-percent increase in tuition and fees alone would benefit the University substantially, while keeping the University’s tuition and fees at the lowest rate in the state for 4-year universities.
While state appropriations have been declining steadily during the past decade, SIUE’s consistent, strong enrollment growth has been a great asset, Poshard said. But during a time when 4-year universities across the board are seeing a decline in enrollment, SIUE must step up its efforts to attract and grow its enrollment base, he said.
“Our enrollment growth is no longer assured,” he said. “We need to provide additional scholarships and financial aid funding to enhance enrollment.”
During the town hall meeting, some attendees asked questions or made suggestions. Scott Belobrajdic, assistant vice chancellor for enrollment management, suggested the University make tuition and fee decisions earlier in the academic year to allow students and parents more time to make their academic decisions about the fall. This would allow SIUE to be more competitive with institutions such as Saint Louis University, the University of Illinois and others in attracting students to the schools of Engineering and Nursing.
Poshard addressed one faculty member’s question concerning rumors that all units within the institution are required to make a 25 percent reduction to their budgets over the next three years. He talked to the group about a plan introduced a few months ago by the governor’s budget office that called for such reductions, noting this would be a “worst-case scenario.” He added that as the University moves into the next three fiscal years, it faces some distinct challenges that it must meet head on.
“There may come a point when we have to consider layoffs. I’m not going to pull any punches here,” he said. “Some things will suffer here eventually. All universities are facing the same challenges. We are trying to offset these budgetary issues to keep from facing these realities. We will take all measures possible to ensure the quality of education offered here doesn’t suffer.”
With regard to the state’s current pension issues, Poshard touted a 6-point plan that has been supported by all presidents and chancellors of Illinois state universities. The proposal, published by the Institute of Government and Public Affairs (IGPA) of the University of Illinois calls for:
- Reducing the annual cost of living adjustment to be in line with the consumer price index
- Eliminating what the report called a “hidden subsidy,” which would adjust the value of the effective rate of interest
- Gradually shifting the pension contribution responsibility from the state to the colleges and universities
- Increasing the employee contribution to the pension plan by 2 percent
- Requiring the state to amortize the current SURS unfunded liability
- Providing a new “hybrid” or defined-benefit/defined-contribution plan for new employees.
Poshard talked about allowing individuals to take legal actions against the state to compel it to meet its contractual obligation.
He noted that it is the University’s responsibility to put a plan together that offers options that will allow employees to allocate their money in the way they want, and the University can match up to a four-percent level of the employee contribution.
“Under the new option, you could possibly stay with the defined contribution plan or you can opt into the managed plan. It reduces the state’s payments and the universities will have the flexibility to define the system to meet their own specific needs.”
Poshard noted that during the next several months, SIUE’s human resources and financial services areas, as well as the University Planning and Budget Council and the chancellor will have their work cut out for them in choosing options to fit SIUE employees’ needs.
“If we’re truly going to solve this problem, we’re not going to be able to cherry pick the things we want,” Poshard said. “We’ve done the best we can do at defining a plan that we believe in that addresses the unfunded liability, holds the state accountable year by year.
“Remember, this is a proposal we put together trying to bridge the gap. It’s a plan we think could work. We’re stuck with getting something that crosses the bridges and calls for some sacrifice. The hard choices have to be made or our system will not succeed.”
Poshard noted that any measure that might pass concerning pension reform would not likely take effect until 2015.