A budgeting tool set to launch next year at Illinois State University builds in flexibility to respond to budget gaps in real time.
During a presentation Thursday, ISU Vice President for Finance and Planning Glen Nelson said the new framework allows university units to better anticipate needs and set goals to remain in the black.
“Prior to this year, the money simply comes into the university,” he said. “And then, after the fact, we look at it and say, ‘How much do we have?’ But we’ve already spent money."
Nelson and other administrators on the Resilience, Innovation, Sustainability and Excellence [RISE] task force presented their progress to faculty and staff during two town halls this week, unveiling how the budgeting approach could be used to project program revenue and costs and adapt to declining enrollment and any volatility in state and federal funding.
“We can roll that through the model to know where it will hit, what the impact on our budget or a particular college’s budget may be, so that key decision makers can start to react to that in a prospective way, rather than waiting until it happens,” Nelson said.
The new model itemizes revenue by credit hour and enrollment to be able to project gaps and set goals. Nelson said the model itself doesn't create new revenue, “but it provides incentives so that [college] deans and other decision makers can look for opportunities to create revenue for the institution.”
“If we had a college that hypothetically has half the students they had five years ago, they’re still being funded in today’s model as though they have that many students,” he said. “Now that we see what revenue that college is really generating, in that case, we would make the argument we have too many personnel dollars.”
In such a situation, Nelson said, trimming personnel dollars can be done over time, as opposed to a “knee-jerk reaction," by immediately cutting positions.
“If we see that there’s a need for a reduction, we would give a subsidy to that college over a period of, say, three years,” he said.
In essence, that reallocates money from colleges with a surplus in order to more gradually stabilize programs with a deficit. Nelson said such subsidies are intended to be temporary.
In her remarks at Thursday’s town hall, Provost Ani Yazedjian said it will require a collective spirit, rather than a competitive one, for the university to be successful long term.
“You may not like it, but you will at least understand the rationale behind why decisions are being made and things are being done,” she said.
Nelson said the budget framework is meant to be used for resource allocation; it is not designed to be the sole deciding factor in which programs to keep and which to cut.
The model is already in effect, officially launching next July. ISU President Aondover Tarhule has not been bashful over his concerns about funding pressures, raising the issue at his State of the University address last month and again in recent remarks to the Board of Trustees.
In March, Nelson told WGLT that ISU needed to find $7 million in the couch cushions this year, before inflation and salary increases. Since mid-2024, ISU has cut $12 million from its budget.
“Right now, we have to continue to operate like we did in the past nine months,” he said. “It’s really prudent management of what we have right now. That’s what we should be doing every day, whether we’re in a situation where money’s tight and funding is tight or suspect—or the couches have opened and we’ve found the dollars.”
