PUBLICATIONS Inside Illinois Vol. 26, No. 19, May 3, 2007

Senate discusses underfunding of state workers’ pensions

By Sharita Forrest, Assistant Editor
217-244-1072; slforres@uiuc.edu

The Urbana-Champaign Senate is urging faculty and staff members and students to contact Illinois legislators to tell them that their failure to adequately fund pension programs for state workers is unacceptable.

At the senate’s April 30 meeting, senators unanimously endorsed a resolution presented by Barclay Jones, chair of the Senate Committee on Faculty Benefits, which said:

“The state of Illinois has significantly underfunded its pension systems by legislative decisions from fiscal year 1981 through FY1995 and FY06-FY07, creating an unfunded liability of over $40 billion, the largest dollar amount in the nation.
“The State of Illinois has lagged behind the dates for payments owed to the State Universities Retirement System resulting in the loss of interest on those payments. Furthermore, SURS has been forced to divert resources to fund the state’s responsibility for self-managed pension plans at the time required.”

The state’s five pension plans provide pensions for state workers, teachers, university employees and judges. In an effort to decrease the state’s multibillion-dollar budget deficit, Illinois began a five-year plan of reduced appropriations to SURS and its four other retirement plans under a law enacted in 2005. In FY06 and FY07, the state’s “pension holiday” reduced contributions to the retirement programs by $1.2 billion each year.

The resolution also said that there is a “significant likelihood that there will be a failure to address pension underfunding the current legislative session.”

Gov. Rod Blagojevich proposed a plan for bolstering the state’s pension system in his March 2007 budget address that involved leasing out the Illinois Lottery for $10 billion, refinancing the pension system debt by issuing $16 billion in pension obligation bonds, and obtaining additional funding through passage of a controversial $6 billion tax on business gross revenues called the Tax Fairness Plan.

The Illinois Legislature has yet to approve a state budget for FY08, which begins July 1. However, Chancellor Richard Herman said that it appears the UI may receive a 1.5 – 1.9 percent increase in its appropriations next fiscal year. The budget proposed by Blagojevich included a 1.9 percent increase – to $721.5 million – in the UI’s general funds appropriation, a $99.8 million capital budget, plus an additional $119.4 million for capital projects from the state’s Opportunity Returns economic development program.

A tuition increase is being considered for the 2007-2008 academic year, and could be proposed when the UI Board of Trustees meets May 17 in Chicago, Herman told the senate.

Other business

• Herman and Provost Linda Katehi are organizing an E-learning Committee that will provide guidance on the role of online learning at the UI’s Urbana campus. Herman said he expects the committee to become a standing committee that will provide leadership for academic units and faculty members as they develop, implement and sustain e-learningin existing and new degree programs, coursework and other academic programming, and pioneer e-learning pedagogies.
  
  “It seems to me that the nature of the university may change over a period of time, but the idea of forgoing the great American invention of the residential university is something that I don’t want to give up and I don’t see any reason why e-learning should force that on us,” Herman said.
  
• Ilya Kapovich, liberal arts and sciences, expressed concern about possible plans to disband the Research Board or reduce the funding it provides, which Kapovich said would have deleterious effects on the mathematics department and other units. “I have two National Science Foundation grants at the moment and I still need extra money from the Research Board,” Kapovich said. “If this is axed, all the strategic planning effort that we had last year will be severely compromised.”
  Herman responded that he expects the debate about the Research Board budget “will end in a good place. There is an effort (on the part of the Federal government) to double the NSF budget, which hopefully will help all of us. I think that the discussion at the March 26 senate meeting got to the essential nature of the Research Board.”
  
  In a March 27 e-mail message to faculty members, Charles Zukoski, vice chancellor for research, said that he was seeking the advice of the Research Policy Committee about a possible restructuring of the board and its funding plans for FY08.
  
  
• The senate approved an addendum to publication agreements for authors from universities such as the UI who are members of the Committee on Institutional Cooperation. The addendum would give authors and their institutions more control over the use and distribution of published works, such as archiving of their work in open access repositories. Use of the addenda by Urbana faculty members would facilitate the development of the Illinois Digital Environment for Access to Learning and Scholarship (IDEALS), an open access institutional repository of creative works produced by faculty members from the Urbana campus sponsored by the Office of the Provost and offered through the University Library and Campus Information Technologies and Educational Services.

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