ISAC State Legislative Update

Quinn Proposes FY11 Budget; No Cuts to ISAC's Total Budget, Shifts in Some Programs

On March 10, Governor Pat Quinn provided the General Assembly with his budget proposal for Fiscal Year 2011, which will begin on July 1, 2010. Along with cuts in funding for state government operations, local governments, and human services, the proposal includes a reduction of about $1.3 billion from the current fiscal year’s appropriation for education. Much of the reduction is due to the loss of federal stimulus money that has not been renewed for the coming fiscal year.

As an alternative to the cut to education, the Governor has proposed an increase of one percentage point in the State income tax rate. The revenues from what he describes as an income tax surcharge would be earmarked for education. 

Regardless of the outcome of the surcharge proposal, the Governor has proposed level funding for the Illinois Student Assistance Commission (ISAC) to distribute through scholarships and grants.  In particular, the proposal shifts dollars to the Monetary Award Program (MAP) and to the grant programs for dependents of police, fire, and corrections officers killed or disabled in the line of duty. This last allocation is expected to allow the program to keep pace with rising tuition costs. The proposal does not include funding for the Silas Purnell Illinois Incentive for Access (IIA) Program, which for FY10 provided awards only for the first term and only for half of eligible applicants, instead allocating those dollars to MAP.

To see details of the budget proposal, visit http://budget.illinois.gov/ and click on “Operating Budget”. A summary of the general funds recommendation for ISAC is below.

FY2011 General Funds Recommendation for ISAC Appropriation ($ thousands)

	Enacted	Recommended
Grant or Loan Repayment Program	FY2010	FY2011
Monetary Award Program (MAP)#	398,521.1	403,896.1
Silas Purnell Illinois Incentive for Access Progam (IIA)*	4,800.0	-
Illinois Veterans Grant Program (IVG)*****	5,750.0	6,000.0
Illinois National Guard Grant Program (ING)	4,400.0	4,400.0
College Savings Bond Grants (BIG)***	325.0	325.0
Dependents Grant Program**	875.0	950.0
Student to Student Grant Program	950.0	950.0
Veterans' Home Nurses' Loan Repayment Program	50.0	50.0
Minority Teacher Scholarship Program (MTI)	2,500.0	2,500.0
Illinois Future Teacher Corps Scholarship	2,000.0	2,000.0
Illinois Scholars (Pass-Through Funding)	3,160.0	3,160.0
Nurse Educator Loan Repayment Program	300.0	300.0
Nurse Educator Scholarship Program****	900.0	-
Teacher Loan Repayment Program	500.0	500.0
Total Grants and Loan Repayment Programs	425,031.1	425,031.1

# increased with funds from IIA, Nurse Ed Loan Repayment
*at $4.25 level less than half of eligibles receive half an award
**increase to cover increases in tuition and fees
***reinstated per legislative request to restore funds
****program ends in FY2010
*****covers summer only

The Governor’s proposal also maintains a separate $7.2 million line item for the Illinois Community College Board to reimburse community colleges for tuition and fees waived under the Illinois Veteran Grant (IVG) that are not reimbursed through ISAC.  (As in previous years, regardless of the IVG appropriation’s being split between ICCB and ISAC, it is still only necessary for schools to submit their IVG claims to ISAC. ISAC staff will continue to process IVG claims and to work in cooperation with ICCB to ensure their proper payment.)

Of course, the Governor’s budget address is an early step in the appropriations process, and the total funding for ISAC-administered programs, including MAP, will not be certain until the budget has been finalized.

Legislators are currently scheduled to adjourn on May 7th.  It is too early to tell whether the budget will in fact be completed by that time or whether the Governor's recommendation that ISAC receive level funding will remain intact in the final budget.

If you would like to comment on the Governor’s proposed appropriation for ISAC in FY11, you can identify your legislators and find their contact information at the General Assembly’s Web site, http://www.ilga.gov/.  Click on the “Legislator Lookup” link at the lower right side of the home page if you need to find out who represents you, or click on “Members” and the names of your State Senator and Representatives to find their contact information in Springfield.  

Other Budget Proposals

Meanwhile, individual legislators have made their own proposals that include amending the State Constitution to allow for a progressive income tax structure, instituting “pay as you go” requirements for new programs, and making an across-the-board cut of 10% to each state budget line (a proposal voiced by gubernatorial candidate State Senator Bill Brady and others). With respect to higher education, this last concept is embodied in Senate Amendment #2 to Senate Bill (SB) 1237 (Trotter), as described below.

Never put to a vote in either chamber was House Bill (HB) 4622 (Pritchard), a proposal to establish a tax amnesty period during which those who owe state taxes could repay them without penalties or interest. If approved, that plan could have brought in a projected $104.9 million in back taxes, the entirety of which would be put towards funding MAP for the second half of the 2009-2010 academic year.  This infusion of cash would have been a bit more than half of the amount needed to fund spring term MAP claims. Testimony from the Department of Revenue indicated that, because many of these taxes would be collected eventually and the state would forego penalties ordinarily due on the late payments, the net outcome of an amnesty could be small or even be a loss. The House Revenue and Finance Committee did not vote to send the bill to the full House before that chamber’s deadline for committee action.

Committee Deadlines Pass

As ISAC continues its daily work of program administration and attempting to make college accessible and affordable for all Illinois students, legislators have introduced a variety of other measures that would affect higher education affordability. The bills listed below have made it through the first major procedural hurdle of the legislative process: obtaining a majority vote in a standing committee of the Senate or House (e.g., the Senate Higher Education Committee in the case of most Senate Bills discussed here, or the House Higher Education Committee in the case of most House Bills). As a general rule, bills that will make it entirely through the process must have been heard in committee by the chambers’ internal deadlines, which both passed on March 12th.

For the most up-to-date information on the status of pending legislation, you may refer to the General Assembly’s Legislative Information Service, which maintains records of legislative activity online at http://www.ilga.gov/. Questions regarding state legislative activities may also be directed to Trena Sabo at 217-782-6920 or tsabo@isac.org or to Katharine Gricevich at 217-785-9278 or kgricevich@isac.org. 

Budget/Appropriations

SB 1237 (Trotter), if amended by Senate Amendment #2, would institute a 10% across-the-board cut in the appropriation for state agencies for the current fiscal year, FY10.  Because the majority of ISAC’s general funds budget is in the Monetary Award Program, such a cut would most likely mean cutting the size of second term MAP awards by about 22%, or a total of $546 for a student receiving a maximum award—forcing most schools to seek the amount of the reduction from needy students.  In addition to the immediate financial burden that such a cut would place on students and the additional cash flow problems that would be created for schools, reducing awards for the current term would also impose a significant administrative burden for school offices of financial aid and student financial services.  A 10% cut in the current fiscal year would also require ISAC to seek the return of grant dollars paid from sources other than the General Revenue Fund (GRF).  Funds have already been distributed to students through the Optometric Education Scholarship Program and the Higher Education License Plate Program and would have to be collected from them.

If a 10% cut were imposed for FY11, ISAC would be able to serve about 15,740 fewer students than received awards in the current year, in which well over 100,000 eligible applicants were already suspended.

• SAs #1,2, and 3 referred to Senate Appropriations II Committee (not voted upon as of 3/12/10)
• Senate 3rd Reading (without amendments) (awaiting full Senate vote)

CHANGES TO EXISTING PROGRAMS:

College Illinois!® 529 Prepaid Tuition Program

HB 6206 (McCarthy) would expand school eligibility for the College Illinois!® 529 Prepaid Tuition Program.  Currently, a school within Illinois must be eligible to participate in the Monetary Award Program (MAP) in order to qualify for use of College Illinois! benefits, and no proprietary school based outside of Illinois may ever qualify.  By changing the definition of “eligible institution” such that it matches the definition of an “institution of higher learning” found in the Higher Education Student Assistance Act, however, this bill would provide criteria against which the Commission could judge out-of-state and for-profit schools to ensure that they qualify as long as they meet standards—such as accreditation and maintenance of degree-granting programs—that are substantially equivalent to those for an eligible institution located in Illinois.  The proposal would have no impact on the General Revenue Fund and a minimal impact on the liabilities of the Prepaid Tuition Trust Fund.  If enacted, the change would become effective July 1, 2010.

• Passed House Higher Education Committee 7-0-0
• House 2nd Reading (awaiting full House vote)

Extension of truth-in-tuition to a fifth year

Students entering public universities in Illinois as freshmen are guaranteed the same tuition rate for four years under the existing Truth-in-Tuition law. SB 3222 (Sandoval), in its current form, would extend that guarantee to a fifth year.  However, the sponsor has filed a further amendment, SA #3 (currently in the Senate Assignments Committee).  With the adoption of SA #3, the bill would instead mandate that, for a student who takes longer than four years to complete his or her degree, the tuition rate for a fifth and, if needed, sixth year would not rise beyond what is charged to students who enrolled in the academic year following that in which the student enrolled.

• Passed Senate Higher Education Committee with SA #2   6-4-0
• Senate 3rd Reading (awaiting full Senate vote)

Community College Equalization Grants

SB 2538 (Maloney/W. Davis) provides that as of July 1, 2011, a community college district must maintain a minimum required combined in-district tuition and universal fee rate per semester credit hour equal to 70% of the State-average combined rate, as determined by the State Board, or the total revenue received by the community college district from combined in-district tuition and universal fees must be at least 30% of the total revenue received by the community college district, as determined by the State Board, for equalization funding. Effective July 1, 2010.

• Passed Senate 56-0-0
• House Rules Committee (awaiting assignment to standing committee)

General Assembly Scholarships

The General Assembly scholarship exempts the recipient from payment of tuition and fees at a public university within Illinois. The schools receive no reimbursement from the State for implementing these waivers.  No standard criteria or processes exist by which a legislator may nominate a G.A. Scholarship recipient, and as a result, procedures vary widely from district to district. SB 365 (Cullerton/Flider), as amended by SA #1, makes changes to eligibility criteria for the General Assembly Scholarship, most notably by prohibiting scholarships for students whose families have donated to a member’s campaign during the five preceding years and by prohibiting contributions from a scholarship recipient or his immediate family during the subsequent five years.  The scholarship is also revoked if the recipient moves outside the district, and the recipient must have already been accepted to the relevant university before being designated a GA Scholarship nominee.

• Passed Senate 54-0-0
• Passed House 85-22-1
• Passed Both Houses, Sent to Governor

HB 4865 (Walker/Trotter) would prohibit the award of new General Assembly Scholarships (see SB 365, above) as of June 2010.

• Passed House 80-36-0
• Senate Committee on Assignments (awaiting assignment to standing committee)

Expansions of MIA/POW and Illinois Veteran Grants

HB 5824 (Bost) would allow a veteran who is eligible for the Illinois Veteran Grant (IVG) program to transfer his or her state educational benefit to a dependent spouse or child rather than using it himself or herself.  A veteran would not be eligible to transfer this benefit if he or she is using a comparable federal benefit such as the benefits offered through the new federal Post-9/11 GI Bill.

• Passed House Higher Education Committee 5-1-0
• House 2nd Reading (awaiting full House vote)

SB 3630 (J. Sullivan) provides that an "eligible veteran or serviceperson" includes a veteran or serviceperson who (i) was an Illinois resident within 6 months after entering the service or (ii) became an Illinois resident within 6 months after leaving the service and can establish at least 30 years of continuous residency in the State of Illinois. If approved, the change would become effective July 1, 2010.

• Passed Senate Higher Education Committee 6-3-0
• Senate 3rd Reading (awaiting full Senate vote)

P-20 Longitudinal Data System

HB 6092 (McCarthy) amends the P-20 Longitudinal Education Data System Act to add information from non-public graduate and professional institutions to the state’s P-20 Longitudinal Data System.  (Non-public institutions that participate in MAP were already scheduled to begin providing data to the system by July 1, 2012.)  The bill allows non-public, non-profit colleges and universities, as individual institutions or as members of a consortium, to prohibit their data from being included in any interstate data-sharing agreements with other states unless consortium participants agree to allow interstate data sharing. Finally, the bill directs the Illinois Board of Higher Education (IBHE) to seek grant funding to support a consortium of non-public institutions to provide assistance in the development of a data collection system. If approved, the bill would become effective July 1, 2010.

• Passed House Higher Education Committee 7-0-0 
• House 2nd Reading (awaiting full House vote)

PROPOSED NEW PROGRAMS:

Workforce incentives

SB 3697 (Crotty), as amended by SA #1, would create the Nurse Educator Student Loan Forgiveness Act to attract and retain nurse educators. At present, the bill includes no provisions regarding the structure of the program.

Similar programs currently in law include a Nurse Educator Loan Repayment Program (which helps nurses who have already graduated and accumulated student loan debt, a Nurse Educator Scholarship Program (which is targeted at nurses who have not yet completed their graduate degrees, but which is sunsetting at the end of fiscal year 2010), and a similarly structured Nursing Education Scholarship Program administered by the Illinois Department of Public Health with money from the Nursing Dedicated and Professional Fund.

• Passed Senate Public Health Committee with SA #1 9-0-0
• Senate - 2nd Reading (awaiting full Senate vote)

SB 3699 (Bond) is currently what is referred to as a “vehicle” or “shell,” a bill that makes no concrete changes but that the sponsor intends to amend in order to add substantive language.  The sponsor is considering an amendment that would create a new program to offer a $1000 scholarship to a student who transfers from an Illinois community college to a public or private, baccalaureate-granting institution in Illinois.

• Passed Senate Higher Education Committee 6-3-0
• Senate – 3rd Reading (awaiting full Senate vote)

SB 3700 (Maloney) is currently what is referred to as a “vehicle” or “shell,” a bill that makes no concrete changes but that the sponsor intends to amend in order to add substantive language.

• Passed Senate Higher Education Committee 6-1-1
• Senate – 3rd Reading (awaiting full Senate vote)

RESOLUTIONS:

HJR 103 (McCarthy) extends the reporting deadline for a study conducted by the Illinois Board of Higher Education (IBHE) regarding the efficiency and efficacy of the Monetary Award Program. The study was originally due on February 28, 2010, but would be due on March 21, 2010, if this resolution is approved.

• Passed House Higher Education Committee 6-0-0
• House calendar – order of resolutions (awaiting adoption by full House)

SJR 88 (Maloney) creates a committee to study higher education finance and issue a report on the topic by December 1, 2010.  Four legislators and seven members selected by IBHE to represent a cross-section of the higher education sector are to examine (1) the history and means of higher education funding in the state, (2) the productivity of Illinois higher education institutions compared to peer institutions in other states, (3) “best practices” established in other states to create incentives for degree completion for institutions and for students, (4) tuition and financial aid policies, and (5) alternative funding mechanisms.

• Passed Senate 57-0-0
• House calendar – order of resolutions (awaiting adoption by full House)

HJR 93 (Crespo) would direct IBHE, ICCB, and ISAC to study performance-based funding for higher education and report to the General Assembly on their findings by June 1, 2010.

• Assigned to House Higher Education Committee (awaiting consideration by the committee)

HR 918 (Pritchard) establishes a Blue Ribbon Committee on Higher Education Mandates within the Board of Higher Education to review State mandates on public universities and report to the GA by August 1, 2010. The committee is directed to determine whether existing mandates (1) are necessary for the health and safety of students, (2) are essential to the academic integrity of public university systems, (3) exceed federal requirements, or (4) are superfluous to the core academic programs of public universities.  The Committee shall consist of members from organizations representing the interests of university administrators, university governing board members, university faculty and staff, and the business community, along with Board of Higher Education personnel and others as deemed necessary by the Committee.  The resolution also declares a moratorium on the passage of new unfunded mandates for public universities during the remainder of the 96th General Assembly, which will be concluded next January.

• Passed House Higher Education Committee 7-0-0
• House calendar – order of resolutions (awaiting adoption by full House)

HR 920 (Bost) directs the IBHE to study the feasibility of implementing a two-year budgeting cycle for public institutions of higher education and to report to the General Assembly before June 30, 2010.

• Assigned to House Higher Education Committee (awaiting consideration by the committee)

HR 955 (Rose) directs the IBHE to prepare to implement a rural campus designation program to allow Illinois schools to qualify for federal funds under a program currently under development within the U.S. Department of Education’s (ED’s) Fund for the Improvement of Postsecondary Education (FIPSE).

• Passed House Higher Education Committee 7-0-0
• House calendar – order of resolutions (awaiting adoption by full House)
  

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