Higher education in Illinois is approaching afunding crisis. By scal year 2013, the state isset to appropriate more to public university pensions and other retirement costs than it will to support all other higher educationprograms. Illinois’ state pensions, whichrequire a signicant increase in state con-tributions in coming years, are set to drownout spending on core services. When statespending on higher education retirementssurpasses all other aid to public higher edu-cation institutions, education funding will beturned upside down.In November 2011, this problem was putinto focus when the State Universities Re-tirement System, or SURS, released updatedprojections of the state’s annual statutory pension contributions through 2045.
Thenumbers were adjusted after the pensionsystem made changes to their actuarial as-sumptions. The changes increased the state’sstatutory payment for scal year 2013 to$1.40 billion from the previous projectionof $1.06 billion.
This nearly $350 millionjump in payments will almost certainlycause higher education retirement ex- penditures to eclipse other higher edu-cation support next year.
As decades of scal irresponsibility catchup to Illinois’ budget, individual programs
is a Senior Budget and Tax Policy Analyst with the Illinois Policy Institute.
College funding and tuition aid can’t compete with retirement spending
T a x & B u d g e t
B r i e f
J a n u a r y 4 , 2 0 1 2
Source: Commission on Government Forecasting and Accountability, State Universi-ties Retirement System and Illinois Policy Institute calculations. Assumes 3 percent retiree health care spending growth. See appendix for more information.
Graphic 1. Projected higher education retirementspending vs. other higher education support
(Assumes total education spending grows at 1 percent annually)