To understand the wretched state of financial affairs at many of the nationâs public colleges and universities, one need look no further than The Prairie State.
Illinois is widely considered the worst-run state in the U.S. Crippling pension obligations, $150+ billion in debt and unpaid bills, deeply divided political leadership, the nationâs highest property taxes, all-time-high net out-migration population (105,217 in 2015), and, most alarming, a nearly two-year budget stalemate that has kept public and private businesses and institutions on edge. Sitting on $26 billion of outstanding general obligation bonds, Illinois claims the lowest credit rating among the statesâBBB (Fitch Ratings), just two notches above the junk levelâand, based on its present course, debt obligations are only going to worsen in the coming years.Â
The stateâs public universities and colleges have been among the hardest hit by the budget impasse, losing (temporarily) as much as a third of their operating budgetâall while dealing with flat or declining enrollment numbers. Illinoisâ political and fiscal mess has left these institutionsâespecially the smaller, regional schools that canât lean on private donors or sizable endowments to get byâgasping for air.Â
How can public institutions expect to survive and thrive in this turbulent environment? The answer, for one school anyways, is to think and act like entrepreneurs, to bypass the traditional funding and operational modelsâto escape forward.Â
Michael Amiridis, Chancellor of the University of Illinois at Chicagoâone of just four public universities in the state that has seen enrollment grow in recent yearsâcoined the term when describing the schoolâs strategies for growth. They include a mix of belt-tightening tacticsâincluding reorganizing internal operations to improve efficiencies and reduce costsâand creative public-private partnerships, not only for capital infrastructure, but also for vital operations areas, like international student recruiting and online degree program delivery. Â
âWe are using private capital to build the necessary infrastructure, whether it is human services, such as a global network of student recruiters, or capital projects, such as a new complex including dormitories and classrooms,â Amiridis wrote in a April 13 letter to Crainâs Chicago Business. He says the school is looking to create âreliable revenue streamsâ through infrastructure projects that offer a solid ROI and that will payoff for years to come. Â
 To be sure, not all public schools face such chaos. Illinois offers the most extreme case. But enterprising institutions like UIC offer a path forward during an era when state and local government budgets across the nation are under heavy scrutiny. Colleges and universities would be wise not to expect a windfall of public funds anytime soon. Escape forward!
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