Illinois Payment Backlog
Tue January 29, 2013
State Is Late With $15 million for Area Community Colleges
The state of Illinois owes eight area community colleges more than $15 million.
According to data from the Illinois Community College Board (ICCB), only about 20 percent of state funding that was promised has actually been distributed to Waubonsee Community College, Sauk Valley Community College, Highland Community College, Illinois Valley Community College, Kishwaukee College, Elgin Community College, McHenry County College and Rock Valley College for this fiscal year.
Jill Janssen, vice president of administrative services at Highland Community College in Freeport, said the state, which is supposed to make most payments on a monthly basis, has been behind for years.
“For Highland’s last fiscal year, 2012, the state made the final payment owed to us in November 2012 -- five months after the due date. For the current fiscal year, 2013, we have received some June and July payments, but not all.”
-- Jill Janssen, HCC Vice President
Although on average the missing state funding only accounts for about 5 percent of the colleges’ annual operating budgets, the late payments do create challenges.
“We have to draw in reserves, basically,” said Rob Galick, vice president of finance and administration at Kishwaukee College in Malta, where the state has paid only about 12 percent of the money it promised.
Over time, Kishwaukee developed a surplus of funds which are kept in reserve for situations like this. Galick said so far they have not had to cut programs or raised tuition because of the state’s late payments, but administrators continue to have conversations about that possibility if the problem continues.
Sharon Konny, vice president of business and finance at Elgin Community College, said they also have reserves to draw from when the state falls behind on payments. It is their policy to keep at least four months of operating expenses in their fund balance, but they also are having conversations about what they’ll need to do if payments from Illinois continue to come late.
“We have options besides the fund balance,” she said. “One would be increasing tuition. We might have to reduce some of the sections or services that we offer. Those would be last resorts.”
Tuition hikes not due to tardy payments
At this point, these northern Illinois community colleges have not had to raise tuition specifically to make up for a lack of state funding. Galick said there have been tuition increases at Kishwaukee, but not because they need to offset the state’s late payments.
Rock Valley College’s Board of Trustees approved a $4 per credit hour tuition increase on Tuesday, but this hike is not due to a lack of state funding, either. The hike will pay for higher wages and benefits for union faculty, union campus police officers and non-union employees.
But Rock Valley may have to increase tuition in the future to receive state funding. A state law requires all Illinois community colleges to keep tuition rates within 85 percent of the state’s average cost per credit hour among community colleges. Currently, that average is $107.89. With the hike, Rock Valley charges $97 per credit hour, which keeps them above the threshold for now.
The purpose of this law is to ensure students throughout Illinois are offered basically the same opportunity to attend college. The downfall is that it does not reward colleges for being fiscally responsible. Although Rock Valley has no real need to raise tuition further, it will most likely have to increase tuition eventually in order to keep in accordance with the law and receive state funding.
Ellen Andres, chief financial officer of the ICCB, said some colleges have been paid a greater percentage of their promised funding than others this year.
“The differences in the percentage of funds received to date between the colleges is primarily because some of the colleges receive equalization grants and others don’t. No equalization grant funding has been paid this fiscal year.”
-- Ellen Andres, Illinois Community College Board
Andres said equalization grants are distributed to colleges below the statewide average of equalized assessed valuation per full time student, which means colleges in districts with limited local tax bases have funding to level the playing field with those colleges that meet the average. Kishwaukee, Rock Valley and Sauk Valley were supposed to receive bigger grants, but they haven’t seen any of that money yet.
The future of northern Illinois community colleges appears bleak by these numbers, but Konny remains optimistic that the problem will be solved.
“I think things will turn around,” she said. “We’ve had a number of years that they have paid on time, so we know they can do it.”
For students, faculty, staff and administrators, it is a question of when, and what will they have to sacrifice if their reserves run out.