August 3, 2017
Proposal aims to reverse damage done by two-year state budget impasse
(CHICAGO) In an analysis released today, the Civic Federation announced its support of the City Colleges of Chicago’s proposed FY2018 operating budget. The $442.6-million budget is a prudent plan to begin to stabilize the District’s finances following an unprecedented two-year State of Illinois budget impasse that severely impacted institutions of higher learning.
The District does not plan to increase tuition rates or its property tax levy in FY2018 to address the costs of erratic state funding in recent years. Instead, to secure its financial position, City Colleges will again rely on cost containment strategies along with a plan to sell central office headquarters and underutilized facilities that will reduce overhead and capital costs and help rebuild reserves.
“Following a time of brutal uncertainty for Illinois’ local governments, City Colleges continues to show restraint and thoughtful planning in order to balance its budget and ensure sustainability,” said Civic Federation President Laurence Msall. “However, the Federation remains concerned about the long-term impacts of financial practices that were necessarily implemented by the District in 2016 and 2017.”
City Colleges has been able to weather the financial storm because of strong reserves, shrewd planning and delayed capital projects. Over the last two years, the Civic Federation supported the District’s austerity measures and drawdown of reserves as a reasonable response to its funding emergency. However, the Federation warned that reserves were not infinite and cautioned that City Colleges’ financial stability could be damaged in the long-term.
Added Msall, “While we remain concerned about reduced liquidity and backlogged capital investments, we recognize that the 2018 budget is a strong first step to strengthen the District’s position and reestablish reserves.”
Further affecting City Colleges’ funding, student enrollment continues to decline, and Illinois’ FY2018 budget reduces spending on universities and community colleges by 10% from FY2015, the last year with a comprehensive state budget. The Federation also has concerns that deadlock in Springfield could continue into future fiscal years.
The Civic Federation recommends in its analysis that City Colleges develop a formal tuition and fee policy to avoid uneven impacts on students, improve its fund balance policy and institutionalize its long-term financial planning process. The Federation also urges the District to continue to advocate for the state to change the community college equalization formula to more fairly fund City Colleges and other community colleges located in counties subject to the Property Tax Extension Limitation Law.