How Does a State College Survive, and Thrive, on Emergency Funding?

After Gov. Bruce V. Rauner of Illinois signed into law a temporary budget, on Thursday, to keep state institutions afloat for another six months, public colleges and universities may have exhaled a sigh of relief. But, before long, they’re likely to be holding their breath again.

Illinois’ public institutions have gone without permanent state funding for almost a year, a result of a legislative deadlock. And though the second wave of temporary money — legislators approved $600 million in emergency funds in April — will help carry the colleges through the next academic year, the fact that the cash comes in another stopgap spending bill doesn’t exactly bode well for the future.

Thomas L. Harnisch, director of state relations and policy analysis at the American Association of State Colleges and Universities, said the continued short-term funding makes it difficult for a college to set any long-term plans. Goals like performing maintenance, recruiting star researchers, and increasing enrollment are put on hold until colleges can figure out how to pay their bills, he said.

“The roller-coaster state budgets for higher education and Band-Aid fixes create an atmosphere of uncertainty,” Mr. Harnisch said. “Long-term planning requires a long-term commitment from the state.”

In those kinds of environments, colleges are forced to freeze salaries, leave open positions unfilled, and plug budget holes with reserve funds, he said.

To offset the cuts Chicago State University told its 900 employees in February that they might not have jobs unless they were individually “recalled.” Western Illinois University laid off 110 staff members and 40 faculty members, none of whom had tenure.

The Uncertainty Factor

Budget battles like this one also don’t bode well for parents and students shopping for colleges, said Matt Hamill, senior vice president for advocacy and issue analysis at the National Association of College and University Business Officers.

Students are bound to look at the situation at the State Capitol and wonder what will happen to tuition, Mr. Hamill said.

“That uncertainty has to be a factor in at least some number of families’ decisions about where their children will go to college,” he said.

And when students do enroll in a college or university in the midst of a budget stalemate, the institution still must provide financial aid, with or without state funding.

During the past academic year, Illinois’ four-year public colleges fronted the money for financial aid with hopes the state would reimburse them after a budget compromise was reached. But that is a realistic solution for only a few semesters, if a university can even afford that, Mr. Harnisch said. Colleges could raise tuition, but even that step has its limits.

“Universities might be able to float students money for financial aid in the short term, but they can’t do that in the long term,” he said. “Financial aid is an integral part of college affordability that requires state funding.”

Regional public colleges and universities are often on the short end of most fights over state budgets, and their financial aid is hit the hardest, Mr. Harnisch said. Those institutions don’t have many out-of-state students who pay higher tuition. They also lack large endowments and research funds to draw money from, and they serve more first-generation and low-income students, who need the most financial support.

Even when public colleges finally get public funding, the effects of a budget impasse still linger, Mr. Harnisch said. The state government becomes used to the reduced higher-education funding, he said, and negative public perceptions loom, making recruiting top-tier faculty members and researchers more of a challenge.

However, it doesn’t look as if budget standoffs as dire as the one in Illinois will crop up anytime soon in other states, Mr. Hamill said. Trends show that most states have enough tax revenue to maintain higher-education needs, he said.

Mr. Harnisch said he is a bit more wary of such predictions, citing increased polarization in state governments. “They need sufficient and sustained and predictable state support,” he said.

Fernanda Zamudio-Suaréz is a web writer. Follow her on Twitter @FernandaZamudio, or email her at fzamudiosuarez@chronicle.com.