Gov. Pat Quinn says he will sit down with legislative leaders today to discuss major changes in the state’s pension system that will affect SIU employees and the university’s budget.
The Legislature adjourned last week without voting on the contentious issue.
SIU President Glenn Poshard said legislators debated the transfer of pension costs from the state to individual universities.
Twenty percent of university employees’ salary goes to their pensions. The state pays 12 percent and the individual pays 8 percent out of his or her payroll, but now the state might transfer the 12 percent payment to the universities.
Poshard said the university would have to take the money out of its regular budget, which would diminish it by millions per year.
Duane Stucky, vice president for finance and administrative affairs, said pension costs for the university would total $46 million, with sports and academic programs accounting for $30 million of that. Stucky said if the university absorbed the pension costs, it would cut an additional 14 percent from the operations budget.
SIU’s budget for fiscal 2013 has already been cut by 6.14 percent from $217 million to $203 million, and the state still owes the university $74 million for fiscal 2012, which likely won’t be paid until Dec. 31 of this year, or halfway through the fiscal year.
“They (the state) have continuously lowered our appropriations, and even with the lower appropriations they’re falling behind in paying us,” Poshard said.
If the pension costs are transferred to the university, Stucky said, it’s likely there will be a substantial increase in residence hall fees and unions fees. Tuition would probably go up again, too, he said.
The SIU Board of Trustees voted May 10 to raise tuition by 4.8 percent, which is expected to bring in $3.3 million in revenue.
“In the university’s case, we have no other place to go but increase our tuition, and that would affect the middle and low-income families trying to get their kids to college,” Poshard said.
Chancellor Rita Cheng said there were many proposals for pension reform, so she can’t predict which one will pass.
She said one proposal included moving pension payments to universities by 1 percentage point each year for the next six years and then by 0.5 percentage points a year until the universities absorbed the full cost.
Cheng said that would still be a significant blow to SIU’s budget each year.
One positive, Poshard said, is that the governor’s proposal to raise the retirement age from 65 to 67 failed. Legislators also discussed raising individual employee contributions to 11 percent of salary, but that also failed.
The date isn’t set yet for legislators to come to a decision on pension reform, but Quinn told reporters after the legislative session Thursday that it’s important the issue is solved quickly.
“We must forge an agreement,” he said. “I think we have the elements. We’re very close, but we’re not there yet.”