Report: Most of Illinois universities' state funds go toward pensions
This past academic year has been nothing short of trying for Illinois’ state universities, which rely heavily on the state for funding.
The lack of a state budget for an entire year caused delays in funding and forced school administrators to lay off workers and cancel classes. But the real financial strain crippling Illinois' public universities is funding pensions and professors’ salaries.
A 2014 analysis of higher education funding by the Illinois Department of Insurance revealed that all of the money public universities get from the state essentially goes toward funding university retiree pensions.
The report said $6.9 billion in tax-based funding has subsidized university pensions over the past decade, with $1.51 billion spent in 2014 alone.
Since state universities received $1.24 billion in general state aid that year, the pension subsidy shortfall of $270 million was covered by students through their tuition.
The state’s contributions to the State University Retirement System (SURS) on behalf of the state’s 69,436 university employees in 2014 was $21,644 per employee – five times higher than the $4,077 university employees contributed to their own pensions.
“The pension contribution is increasing at an alarming rate,” Martin Blumenthal, Republican candidate for the District 58 State House seat, told the Lake County Gazette. “It has more than tripled since 2009 and nearly doubled since 2011.”
Despite exorbitant state contributions toward university employee pensions, as of June 30, 2014, SURS had a $20.04 billion deficit – a 186 percent growth over the past decade due to an increase in the number of retirees, state auditors said.
Back in 2005, 39,800 university retirees were receiving benefits from SURS. By 2014, that number had grown to 59,406, with 1,443 retirees collecting over $100,000 in pension benefits and 55 collecting more than $200,000, the Better Government Association said.
Not only are university employees well taken care of upon retirement, but professors in Chicago earn more than the national average.
According to website Glassdoor, Chicago professors take home $120,167 annually on average, compared with the $114,134 national professor salary average.
“At this rate, I do not see how tuition costs can be contained,” Blumenthal said. “Students are heavily in debt with student loans, with no chance of paying them back unless they have a degree that employers want.”
As tuition costs rise to cover pensions and salaries, students will suffer, Blumenthal said.
"Higher education is vital to produce physicians, engineers and researchers that Illinois needs to prosper. The costs of higher education will be the only thing that stands in the way of a lot of intelligent high school students from pursuing their dreams," Blumenthal said.