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MATTOON -- State Comptroller Susana Mendoza toured Eastern Illinois University's campus on Thursday and discussed the recent release of $5.6 million in funding to EIU following the end of the state budget impasse last week.

Mendoza said her office is encouraging EIU and other recipients of delayed state funding to be judicious in their spending of this money. She said the new budget will halt the deficit spending that occurred during the impasse, but the state continues to face severe financial challenges such as paying down a $15-billion backlog of unpaid bills.

"We want to temper people's expectations," Mendoza said.

Regarding EIU, Mendoza said the state also has released $6.4 million in Monetary Award Program grant funding to the university. She said the availability of this financial aid will help with recruiting students.

Mendoza said the two-year budget impasse reduced EIU's state funding, necessitating that the university increase tuition and defer needed improvements for aging academic facilities, in addition to laying off employees. She said the impasse's consequences have hindered student recruitment efforts.

"(EIU) is an economic driver for all of Central Illinois. It's unconscionable that we got to this point," Mendoza said of the impasse.

The comptroller said the recently released funding will help meet EIU's financial needs in August, including debt service payments if needed. Mendoza said she is hopeful that EIU will receive additional state funding in September.

Paul McCann, vice president for business affairs at EIU, said the university would have made its bond payments on two fixed bonds, EIU's Auxiliary Facilities System Revenue Bond and the Certificates of Participation.

McCann said the university was more worried about operating expenses over the summer, specifically payroll. EIU President David Glassman placed a hard freeze on purchases a couple of weeks before the impasse was resolved.

This was a stronger stance by EIU officials on purchasing. Last year, there was a freeze implemented on many purchases at the university, including things like travel expenses and non-instructional capital equipment purchases. The university also had a halt on most hiring.

Even though money is flowing with more promised on the way, McCann said EIU's budget-tightening measures will continue for now. He said freezes on purchasing will likely stay in effect until the fall.

Also, EIU will probably not be quick to hire back all of the employees whom the university lost because of budget tightening. McCann said there currently is not a plan to "bring everybody back." He said they plan to remain "strategic" when hiring for positions and plan to take each scenario on a case-by-case basis, considering the continued unreliability of the state funding.

McCann said because of what EIU dealt with during the past two years, the university will stay cautious.

"We don’t know when money will be coming in," McCann said. He added he is thankful for Mendoza's work to release funds recently to assist EIU.

The comptroller said Illinois' backlog of overdue bills includes owing $5.5 million to Sarah Bush Lincoln Health Center, $1.34 million to Mattoon's school district, and $1.04 million to Charleston's district. Mendoza said she wants to start paying these bills as soon as possible to provide relief for these organizations.

Mendoza said she hopes that the state will be able to start paying off this backlog by issuing $3 billion or more in bonds at an interest rate of 4-5 percent. She said the state is paying a 12-percent interest rate on unpaid bills, which totals approximately $2 million per day in interest payments.

The comptroller said the new budget, which will increase the personal income tax rate from 3.75 percent to 4.95 percent, will help prevent further deficit spending. Mendoza said rank-and-file legislators joined together to approve a budget when their party leaders could not. In particular, she thanked Republicans state Sen. Dale Righter of Mattoon and state Rep. Reggie Phillips of Charleston for approving a budget that helps EIU.

Despite the state's financial challenges, Mendoza said she is still proud call Illinois home. Mendoza said she is optimistic that Illinois and its people can meet these challenges if they work together.

"I am not going to give up. I am not going to throw the towel in," Mendoza said as she asked Illinois residents to have faith. "We have done better. We will do better."


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