1. 1 Fiscal Year 2005 IBHE Budget Recommendations House Appropriations – Higher Education Committee February 5, 2004

2. 2 Context for FY2005 Budget Development Ongoing economic/fiscal uncertainty FY 2005 deficit estimated at $1.5 to $2.0 billion All areas of state government are impacted Recognition of the need for careful and realistic planning within the higher education system Highest priority activities and initiatives must be protected

3. 3 FY2005 Operations and Grants Overview Emphasis placed on: Good stewardship of existing resources and enhanced accountability Re-directing limited financial aid resources to the most needy students Access and economic development Funding cut or eliminated for many important grant programs and initiatives to protect funding for the highest priority activities

4. 4 FY2005 Operations and Grants Overview (Continued) State General Funds $2.34 billion in total Decrease of $79.8 million, or 3.3% Decrease of $38.5 million, or 1.8% without SURS All Funds (appropriated and non-appropriated) $7.95 billion in total Increase of $159.1 million, or 2.0%

5. 5 Public Universities Recommendations: $1.30 billion Decrease of $41,500 Assumes internal reallocation of remaining administrative cost reductions to core mission activities ($27 million) Related Issues 25% administrative cost reduction over three years ($100.6 million) Enhanced fiscal accountability and transparency (e.g., line item budgeting)

6. 6 Use of Funds From Administrative Reductions

7. 7 Community Colleges/Adult and Career Education Community Colleges: $283.4 million Decrease of $8.0 million, or 2.8% Includes grant line reductions and reallocations to Formula Implementation Grants Recommended transfer of funding source for Deferred Maintenance Grants to Capital Development Fund Adult and Career Education: $45.3 million No change from FY2004

8. 8 Illinois Student Assistance Commission Recommendations: $389 million Decrease of $9.4 million, or 2.4% Includes level funding for MAP Elimination of Merit Recognition Scholarship, College Savings Bond Bonus Incentive Grants funding Related Issues MAP formula changes to maximize program resources for most needy students Partial shift of ISAC administrative costs to Student Loan Fund

9. 9 Grant Programs and Statewide Initiatives Access and Diversity: $10.1 million $967,000 increase, or 10.6% Funds included to open and operate new University Center of Lake County facilities coming on-line in FY2005 All other programs level-funded Recommended transfer of HECA funds to ISAC for Golden Apple program ($300,000)

10. 10 Grant Programs and Statewide Initiatives (Continued) Workforce & Economic Development: $14.3 million Decrease of $23.5 million, or 62.1% Includes $776,000 for Opportunity Returns initiatives Includes: Elimination of funding for 7 programs and initiatives Reduction of funding for Health Services Education Grants and State Matching Grants

11. 11 Higher Education Agencies IMSA: $15.8 million Increase of $1.5 million, or 10.3% Restoration of funding cut in FY2003 State Universities Civil Service System: $1.3 million No change from FY2004

12. 12 Higher Education Agencies (Continued) IBHE: $2.9 million No change from FY2004 SURS/Health Insurance: $272.6 million Decrease of $41.4 million or 13.2% Decreased requirement due to pension bond proceeds received in FY2004

13. 13 FY2005 Capital Improvements Overview Total Recommendation: $341.6 million Total requests: $1.38 billion Regular Capital: $301.6 million Supports 30 projects All but four projects were on the Boards FY2004 priority list

14. 14 FY2005 Capital Improvements Overview (Continued) Capital Renewal: $40 million Increases funding by $10 million, or 33% Provides funding to address deferred maintenance and other minor infrastructure needs Reflects Boards priority on addressing deferred maintenance needs across the system.