On Thursday, Gov. Pat Quinn signed into law a proposal that would
allow universities to borrow up to three-quarters of what the state
owes them in overdue bills.
The state has been unable to make
full, timely payments to universities and other vendors because of
the lack of money in the state's coffers.
Quinn emphasized that borrowing would help universities continue
to maintain education standards and contribute to the state's
"These universities like Southern Illinois University and the
University of Illinois are major corporations within our state.
They're major purchasers of goods and services; they're major
employers," he said.
Southern Illinois University President Glenn Poshard said the
state owes the university system $108 million and that the
university system would try to borrow the maximum allotted under the
new law, which would be about $81 million.
Poshard added that a major chunk of the borrowing amount would go
toward paying university employees.
"The borrowing bill is critical to getting us through July and
August payrolls. I talked to other (university) presidents around
the state; it's critical for them to get through July and August
payrolls," he said.
State Rep. Dan Brady, R-Bloomington, whose district includes
Illinois State University, said borrowing could help universities
avoid far worse options.
"It is not an option that I think people want to have to explore,
but an option (universities) need as a resource to be able to meet
payroll, to be able to do things within the operations of the
university. (It's so) that we don't have a terrible shutdown that
occurs because of the lack of state funding," he said.
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Under the new law, a state university's board of trustees would
have to approve of how much to borrow and the maximum amount of
interest to be paid.
The new law also mandates that the state comptroller would have
to sign off on any university borrowing and that within 15 days of
the borrowing, the university must provide a detailed account of how
borrowed funds are being used.
All borrowing would have to be repaid in one year or less.
University systems should then have received the amounts owed to
them by the state and could pay off the borrowed amounts, plus
Poshard said he was hopeful the state could reimburse the full
$108 million owed to SIU by the end of 2010.
State Sen. Gary Forby, D-Benton, said borrowing was not an ideal
funding route for the universities.
"It's a Band-Aid deal to help them to get through this session
and next time so we can come up with revenue. When the state starts
doing (its) job, start paying (its) bills and coming up with money,
then they won't have to borrow," he said.
Statehouse News; By KEVIN LEE]