Springfield, IL – To ensure critical funding for universities and community colleges, and students who receive Monetary Award Program (MAP) grants, State Sen. Chapin Rose (R-Mahomet) and State Sen. Dale Righter (R-Mattoon) are pushing a comprehensive, affordable proposal that is paid for and will direct much-needed funding to schools and the MAP program, which have gone without funding during the state’s ongoing budget impasse.
“It’s a sad reality, but a budget deal does not appear on the horizon,” Rose said. “Several of our universities are going to be forced to lay off people, make drastic cuts, and some students who were promised their MAP grants, are now not attending school because their colleges can’t foot the bill. But rather than the half-measures that the Legislature just passed, our legislation helps all sectors of higher education and is responsible to the taxpayers at the same time.”
“The time to act is now,” Righter said. “Our students deserve this. Our community colleges and our universities deserve this. Without it, some may have to close their doors. The game-playing from House Speaker Michael Madigan has to stop. This legislation is a real solution.”
The lawmakers said that recent Democrat proposals portrayed as funding higher education amount to empty promises, lacking the funding stream needed to pay for the proposed spending, pitting the state’s community colleges and universities against each other, and leaving both students and schools in the lurch.
In contrast, Rose and Righter’s proposal would direct nearly $1.7 billion to the state’s higher education system by tying higher education funding to procurement reform (Senate Bill 2360) offered by Gov. Bruce Rauner, which is estimated to save taxpayers approximately $500 million every year.
Their proposal would allow for:
Four-year colleges/universities to be funded at 80% of 2015 funding levels;
Two-year community colleges to be funded at 90% of 2015 funding levels;
MAP grants to be funded at 100% of 2015 funding levels.
Procurement reform has the ancillary benefit of providing direct financial relief to the universities and community colleges to cushion the cuts and get them to a figure closer to the Senate Democrats proposed cuts for universities.
Importantly, the financial benefit from procurement reform will transcend any single fiscal year and benefit students and their parents for years to come – long after this budget crisis is resolved.
“Our plan is a thoughtful and methodical way to solve this problem,” Rose said.
Rose stressed the higher education funding proposals from Democrats are not real legislation:
SB 2226 (Sen. Scott Bennett, D-Champaign): Fails to fund MAP grants and no way to pay for it.
SB 2043 (Sen. Donne Trotter, D-Chicago): Fails to fund four-year universities, pits higher education against each other, and no way to pay for it.
“Under Senator Bennett’s plan, the students are left high and dry without MAP grants,” Rose said. “Under the other proposal that the Democrats passed January 28, four-year universities are left high and dry. Neither plan makes a dent in our state’s extreme fiscal situation. Either way, their plans fail on all counts. Our comprehensive package helps universities, community colleges, students, and is a major step forward in solving the financial crisis for the taxpayers. Most importantly, while the Governor will veto the Democrats’ proposal that leave our universities without funding, as he should, the Governor has said he will sign our proposal.”
The procurement process governs how public bodies obtain or buy goods and services. Rose points to several examples where Illinois’ procurement law cost public universities and taxpayers.
University of Illinois:
In March 2015, former U of I President Bob Easter testified at a legislative hearing that the procurement code could cost the U of I as much as $70 million a year.
A 2013 purchase of a steam kettle cost more than $15,000 higher than budgeted simply because of delays in the bid process.
The University lost a bid renewal for the purchase of laboratory animals due to the deadline for a disclosure form and miscommunication between the vendor and purchasing. This resulted in the entire bid process having to be repeated. The contracted pricing was then lost in this process, and the end result was a costlier product.
Illinois State University:
In response to a Request for Proposal (RFP) for Computer Aided Facilities Management System, ISU received six proposals. Due to technical restrictions, ISU had to reject five of the six proposals. The only vendor they could accept a bid from was $150,000 to $240,000 more than the three lowest-priced vendors who had otherwise-valid proposals.
Southern Illinois University:
SIU’s President has testified that the procurement code costs his University millions, as well.
For the purchase of a chemical storage building, the lowest bidder was not registered with the Secretary of State. The next bid was more than $144,000 higher. The project is now in the process of a re-bid. The final contract amount is unknown.
For the purchase of bakery products, the vendor was slow to respond to the financial disclosure requirement. That required an extra $8,000 in spending with another vendor.
Eastern Illinois University:
Simply put, EIU says the increase in paperwork has led to costly delays in procuring goods and services.
The University says they are losing vendors due to paperwork levels.
During a legislative hearing on June 23, 2015 in Springfield, Sen. Rose asked Illinois’ Chief Procurement Officer, Matt Brown, about the bidding process the state used to select a $3 billion contract for the procurement of prescription drugs for state employees and retirees. The exchange revealed how the complexity and rules regarding Illinois’ procurement code sometimes results in the lowest bid being thrown out.
Here was one of those exchanges during the hearing:
Rose: “Of these non-curable events in the first round, all three bidders were disqualified, and who were they again?”
Brown: “Catamaran PBM, Caremark PCS, and Express Scripts.”
Rose: “So these are major national companies.”
Rose: “Who would have regulatory compliance legal staffs, things of that nature?”
Brown: “I would presume so, yes.”
Rose: “But they couldn’t figure out how to bid successfully in Illinois under our current procurement code?”
Brown: “That’s right.”
In reference to whether the current procurement code got the best deal for taxpayers on this $3 billion contract, Brown said during another exchange at the hearing, “Absolutely, we don’t know.”
Similar problems could be found in the 2011 process of procuring a State health insurance provider, which cost the taxpayers millions of dollars over the course of the contract by not taking the lowest bid.
In 2011, Health Alliance and Humana “violated the procurement code” and therefore, lost out in their protest of the state’s decision to award new state employee health insurance options to other companies.
Health Alliance said of this decision that they were: “not surprised by this ruling, since the chief procurement officer has been singularly focused on the procurement process and not the results.”
Illinois former Auditor General William Holland’s office later concluded, “Given the serious deficiencies in the procurement activities, we are unable to conclude whether the state’s best interests were achieved by the department for the awards for the state health insurance procurements.”
“If procurement reform is done properly, colleges and universities could better manage their future and make better headway on their bottom line by cutting costs,” Rose said. “Colleges and universities for years have been demanding procurement reform. Taxpayers have as well. It’s a win-win.”
“Illinois’ procurement law requirements are so out of whack,” Righter said. “In many costly scenarios, our public universities are forced to go with a higher-priced vendor for something they need to purchase, simply because our procurement law is too complicated to allow the lowest bidder. That’s wrong. It’s hurting our universities, our taxpayers, and our students. It is beyond time to put forward a responsible plan for higher education that funds all of higher education – the universities, community colleges, and most importantly, the students. The Democrats’ plan they passed Jan. 28 gave zero to the universities.”
Sen. Rose says even the bill’s sponsor admitted the plan wasn’t real. During debate on the Senate floor Jan. 28, the sponsor of Senate Bill 2043, Sen. Donne Trotter, commented during his closing remarks, “…if nothing else, let this be the start of real action being taken in this chamber.”
“If their legislation is a starting point, then we offer this in response: It should be common sense for members of both parties. Let’s work together to get this done,” Rose said.
Earlier this week, Sen. Righter introduced legislation that would fund higher education and MAP grants (Senate Bill 2349) that is tied to another piece of legislation, called the Unbalanced Budget Response Act (Senate Bill 2338). This legislation gives Governor Rauner expanded authority and more flexibility to address the budget deficit by allowing the Governor to move more money around to plug budget holes.
“We are doing everything we can to meet the Democrats half-way,” Righter said. “Both of these are options. We trying to do something the Democrats will agree to so we can get this done. If Speaker Madigan and the Democrats don’t like these options, we are waiting to hear their ideas.”