May 07, 2010
Legislature passes public university borrowing bill
SPRINGFIELD, Ill. -- Legislation suggested by Southern Illinois University President Glenn Poshard to allow public universities to borrow working cash in anticipation of receiving delayed state reimbursements has passed the Illinois General Assembly.
SB642, sponsored by Sen. Bill Haine, D-Alton, and Rep. John Bradley, D-Marion, provides maximum borrowing limits based on the outstanding funds the state owes its universities. With that tab now exceeding $700 million, the legislation provides public four-year institutions of higher education an additional financial management tool during Illinois’ ongoing fiscal crisis.
"The idea of this legislation is to provide financial flexibility for the state’s public universities during these very difficult economic times," Bradley stated.
The public universities that sought this authority have balanced operating budgets based on the appropriation level approved by the state legislature; however, the majority of their unrestricted operating revenues are derived from state appropriations, making timely state payments absolutely critical to running these large and complex organizations.
“The students that attend Southern Illinois University Edwardsville and Southern Illinois University Carbondale need to know that the legislature supports their schools and that it has responded by providing the SIU board of trustees the financial tool it needs to stay strong during this budget crisis,” commented Haine.
This year’s appropriation levels for public universitiesfailed to be supported by the necessary revenues and the consequence has been a cash flow crisis for universities that has resulted in mid-year budget cuts, layoffs, furloughs and other cost saving measures.
“SB642 helps us confront this crisis by allowing our public universities to undertake emergency cash flow borrowing that, for the immediate future, will ensure that 15,000 student workers, graduate assistants, faculty and staff employed by SIU will be compensated in a timely manner,” Poshard commented.
“I truly appreciate the efforts of the bill’s sponsors, Sen. Bill Haine and Rep. John Bradley, and to all of our SIU legislators, including campus representatives Rep. Mike Bost, Rep. Jay Hoffman and Sen. Dave Luechtefeld for the strong support they extended to help pass this legislation,” Poshard added.
SB642 now awaits action by Gov. Pat Quinn.
(For more information, contact Dave Gross at 217/545/8080.)