U of I officials eye Medicaid and pension reform

By Jamey Dunn

University of Illinois officials say they are worried about more than just their line item in the state’s budget for next fiscal year.

U of I President Michael Hogan said that Gov. Pat Quinn’s recommendation for flat funding to the state’s universities is a positive development. “We are grateful for that recommendation.” But Hogan said flat funding levels do not ensure that the U of I is safe from cuts. He said university officials are closely watching the legislature’s actions, especially when it comes to Medicaid and pension reform.

He told a Senate budgeting committee Monday in Chicago that retirement benefits are “critical part of the overall compensation package” that must be competitive so the university can “recruit and retain” sought after faculty and staff. Hogan said that faculty members bring in millions of dollars of research funding. However, he said, “I understand there will be shared pain as we wrestle with this issue.” Legislative leaders and Quinn have tossed around the idea of asking universities to chip in on employee pensions. It is unclear how much cost would be shifted to universities under such a plan.

Walter Knorr, chief financial officer and vice president of U of I, said the possibility of Medicaid cuts “puts us at the edge of our seats.” He said that almost 40 percent of those seeking treatment at the university’s hospital in Chicago are Medicaid patients, and the hospital also administers about $42 million annually in charity not covered by Medicaid. Knorr said that Quinn’s call for legislators to cut more than $2 billion from Medicaid costs next fiscal year is “another uncertainty added to our list.” Hogan said the hospital serves many who otherwise would not have convenient access to health care. “There’s literally no other place for them to go that’s easily accessible to them.”

 Some lawmakers have targeted tuition waivers given to university employees as a potential area for savings. Knorr gave the breakdown for the cost of all the waivers the school gave out in Fiscal Year 2011. Mandatory waivers that the school must give included: $9 million for veterans, $4 million for faculty and staff who have been on the job for seven years and $9 million for General Assembly scholarships doled out by legislators. General Assembly scholarships have been the focus of controversy after some have been given to the children of big political donors and other politically connected individuals. Legislation to eliminate the program has failed to gain the needed support. However, many lawmakers now use independent panels to award the waivers, and some have stopped giving them out altogether.

The U of I also gave $20 million in discretionary waivers to undergraduate students and $175 million to graduate students, much of which is compensation for working as teaching and research assistants.

Sen. John Mulroe, a Chicago Democrat, said he is worried about the increasing costs for public education in the state. “[Tuition rates are] going up and up and up and up,” he said. “We have to find some ability to flatten them or to keep them flat so we don’t price out education for the average kid.”

In January, the U of I approved a 4.8 percent tuition increase for incoming freshman. Knorr said that under the increase, a semester at Urbana-Champaign campus would cost about $5,800, at the University of Illinois Chicago campus about $5,100 and at the University of Illinois Springfield about $4,500 for in-state students. Under state law, tuition rates for each year's class of incoming freshmen are guaranteed to remain the same for four years.