Illinois State University President Aondover Tarhule said the painful efforts to address a structural budget deficit has found about $12 million. That's enough to offer nonunion workers a 3.5% pay raise starting in October.
“It’s a tough year when you don’t give a raise, given the kind of inflationary environment that we live in. So, I am very mindful of the pain and the cost to the families and our staff that the lack of raise introduced last year,” said Tarhule.
The last raise was in January of 2024, also a 3.5% bump. The partial year Fiscal Year 2026 cost of the new merit-based salary increase is approximately $3.6 million, according to ISU. Annualized, the total cost is $4.8 million.
The change comes after extensive budget-cutting efforts and rescissions in the budget year that ended June 30. Board of Trustees Chair Kathryn Bohn said during Friday's quarterly trustees meeting the fact the newly approved $566 million budget is balanced should not make people complacent.
"We're not yet out of the woods, and we must continue to closely monitor the budget and implement all necessary strategies to ensure our fiscal resilience," said Bohn.
Bohn also thanked the campus for its "patience" during the rescission and budget reconsideration process.
The cost of the pay hike for nonunion workers added to the expense of pay hikes in recent union contracts would appear to significantly offset that $12 million in savings achieved through the campus budget exercise. That exercise was intended to address a structural deficit the administration projected could rise to $30 million after three years. Tarhule said the cuts have significantly affected that deficit projection.
"They build on each other. When you forgo a cost one year, you don't have those costs and the inflection and escalation associated with it the following year," said Tarhule.
The FY26 spending plan is about $20 million less than the prior year’s budget. That difference does not consider the mid-year rescissions ISU enacted. The budget math includes a cushion of about $900,000 in estimated revenue left after expenses, though it depends on the release of about $1.6 million in state support Gov. JB Pritzker has held back because of uncertainty at the federal level. That’s the remaining two-thirds of a 3% appropriation increase for ISU approved by lawmakers in the spring.
“A contingency plan is in place should the additional 2% appropriation not be released,” said documents prepared for trustees.
Another revenue assumption is a 5% increase in room and board rates approved by the board in February.
"Our unrestricted revenues are below what our expenses are, and even though there are resources that can be shifted from restricted funds, we still are spending more than we are taking in," said ISU Trustee Scott Jenkins.
The new budget also depends on a 2.6% increase in student enrollment this fall. ISU won't know whether it has hit that target until the 10th day of classes in the fall. The administration said so far new student deposits are up 1% and transfer students are up 3%. The enrollment increase last year was 2.7%.
“We need to continue to be very diligent and thoughtful about our costs including cost-cutting and initiatives that will generate additional revenues. We’ll continue to watch that very closely,” said Tarhule.
ISU will test drive its new budgeting process this fall and implement it next year. It will be based on projected revenues rather than estimated costs, as had been the case for decades.
“In August we will share with departments what their allocations would be under the new budget model,” said Tarhule.
That hypothetical exercise will allow departments to see how they might fare under the new process. The administration will use feedback to refine the model. Tarhule said that new budgeting process will likely result in reductions to some departments and slight increases for others.
“What we need to look at is who’s making more, who’s making less and why are those differences and are there levels we can optimize and pool such that maybe the allocation results in a slightly different part that is more optimal,” said Tarhule.
Fine arts building project
After decades of planning and waiting, trustees have approved major renovations to buildings in the Wonsook Kim College of Fine Arts. It includes renovation and construction of 277,000 square feet of space, the demolition of the Centennial West building, the construction of three building additions, and comprehensive renovations of the Center for Visual Arts. It includes space for music, theater, dance, visual arts, and classrooms.
The project has a long and winding history. Between the first time the state approved money for the fine arts complex and now the state has had two financial crises, a political budget standoff under then Governor Bruce Rauner, and a pandemic. Following many years of planning and requests for funding, the state in 2010 appropriated $54.3 million for the project. After design work, the state encountered financial difficulties, and the Capital Development Board put the project on indefinite hold in 2015. The project restarted in 2020 with a nearly $62 million re-appropriation. The Capital Development Board also changed the nature of the project from one done in phases to doing it all at once, which required ISU to spend $15 million to renovate temporary space for use during construction at the fine arts complex. The latest estimate puts the project at $82.7 million, and it is scaled back because of the rise in construction costs.
The original project called for renovation and construction of approximately 437,000 square feet. The latest iteration leaves about 160,000 square feet in its original state.
“Nearly 60% of what was originally envisioned is going to be completed. About 40% of that original project will not be completed,” said ISU Chief Financial Officer Glen Nelson.
Tarhule said there is a “a very long-term plan” to finish the renovation.
ISU paid for renovation of the temporary space. State money will pay for the fine arts construction project.
Bond refinancing
Trustees have approved re-funding of what was originally $36.9 million in bonds issued in 2020 for renovations of Watterson Towers, and a building on Main Street for the ISU Multicultural Center. $31 million of that debt remains outstanding. Trustees approved refinancing not to exceed $33 million and no more than 6% interest. The maturity date on the bonds will remain 2050.
Naming rights
Trustees have signed off on naming various campus facilities after donors to the institution. The Jay and Lori Bergman Field at Hancock Stadium is for Chicago suburban banker and oil company owner Jay Bergman and his late wife Lori, a bank chain purchasing and training director. Jay Bergman is also a former ISU trustee and distinguished alum.
A lecture hall in the new College of Engineering Building on GE Road in Bloomington is named for Archer Daniels Midland.
The student success suite in the College of Business building will carry the name of John Eymann, an alum who worked for BP Amoco and public radio and television stations in Houston. Eymann has also endowed two scholarships at ISU.
The Press Box at Duffy Bass Field is now named for former ISU baseball player Rich Olson.
Last fiscal year ISU had a record total in donations: $44.55 million.
“This exciting milestone suggests two things to me. First is the incredible generosity of our donors, friends, and alums. And second is the vote of confidence and commitment that our donors, friends and alums have in the future of Illinois State and our strategic priorities,” said Tarhule.
