Illinois shorts higher ed by nearly $530M compared to 15 years ago
Illinois’ institutions of higher education will get nearly $530 million less from lawmakers to run this year than they did in fiscal year 2009, adjusted for inflation. Coupled with rapidly rising pensions, students and their families can expect ever-higher tuition costs.
Illinois’ public universities will receive nearly $530 million less in real terms from the state for operations in fiscal year 2024 than they received 15 years ago, according to the state budget.
An Illinois Policy Institute analysis found the state’s public universities will collect 17.3% less to fund operations in this fiscal year than in FY 2009 from state general funds, adjusted for inflation. University pension payments increased nearly eight-fold during the period, likely aggravating that drop.
A 2009 budget summary shows just over 7 cents of each higher education dollar from state general funds went to pay for faculty pensions rather than supporting instructors and students in the classroom.
But growing pension contributions to the State Universities Retirement System have forced Illinois’ higher education institutions to divert more dollars away from improving services and accessibility, driving up total costs and driving down operational spending.
Starting July 1, 2023, those pension payments to the SURS consumed 43 cents of every higher education dollar from state general funds.
While eating nearly eight times as many education dollars, SURS carries nearly $27.8 billion in unfunded liabilities in the latest report and only 45 cents saved for every dollar needed to fund university workers’ retirements. That $27.8 billion pension debt has grown by nearly one-third since FY 2009, when adjusted for inflation.
Underfunding and over-generous benefits are both driving up costs. The system’s top 100 pensioners alone received $34.7 million in combined retirement income in FY 2023, according to a Freedom of Information Act request.
The FY 2024 Illinois state budget signed by Gov. J.B. Pritzker allots $2.5 billion in general funds specifically to higher institutions’ operations compared to $2.2 billion in 2023, marking the largest nominal increase in higher education funding in the past two decades.
But even with this historic investment, Illinois’ colleges and universities will have fewer inflation-adjusted general fund dollars this year to allocate toward construction, technology and student services than 15 years ago.
Illinois’ institution of higher learning also received 6% less funding from non-general fund sources, such as special state and federal funds, in fiscal year 2024 than they received in fiscal year 2009, adjusted for inflation.
To make fiscal ends meet, 11 out of 12 of Illinois’ 4-year public institutions of higher learning have raised tuition prices and fees since fiscal year 2009, adjusted for inflation. That forces students and their families to bear the rising costs, driven by pensions.
A Illinois Board of Higher Education report found as SURS payments increased, universities were forced to become more reliant on raising tuition and fees on students to maintain operational budgets.
A corroborating Center for Tax and Budget Accountability report determined more than two-thirds of the revenue collected by state universities in FY 2021 came from tuition and fees compared to just 28% less than two decades earlier.
The report also found the average weighted price of tuition and fees at Illinois public four-year universities increased from $8,553 in FY 2009 to $16,539 in FY 2023, marking a near-doubling of tuition prices, adjusted for inflation.
The average price of in-state tuition and fees at Illinois’ public universities is now the fourth highest in the nation.
Amid the skyrocketing tuition costs, Illinois is also losing college-bound high school graduates at the second-highest rate in the nation. According to the most recent data from the National Center for Education Statistics, Illinois in 2020 had the second-largest net loss of degree-seeking undergraduate students in the U.S.
Without long-term structural reforms, Illinois’ $27.8 billion university pension debt will continue to grow. Illinois college students will continue to see tuition rise and the state’s investment in higher education will remain below what it was 15 years ago.
Correction: A previous version of this report included unrelated funds in the education operational appropriation calculation for FY 2009.