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'Nail in the Coffin' for Chicago State?

“I just wonder how long we can go,” one faculty member at the financially struggling public university says.

October 5, 2016
 
Chicago State University
Low enrollment totals have led to questions about Chicago State University's future.

A belligerent crowd greeted Chicago State University’s Board of Trustees last month as it prepared to part ways with President Thomas Calhoun Jr. after just nine months.

Audience members at a Sept. 16 board meeting jeered and hissed as the terms of a separation agreement were read aloud. They chanted “shame” as the board voted to name Vice President of Administration and Finance Cecil Lucy interim president.

The hostility of that meeting was palpable, even in audio recordings. But the crowd also reacted when the board heard a report stating that student head count this fall totaled 3,567.

That’s down 25 percent from 2015, when Chicago State enrolled 4,767 students. It’s almost 52 percent below the 2010 level, when the university enrolled 7,362 students.

More detailed reports emerged the next week, revealing the enrollment numbers had ticked up by nine to 3,578 students. That change was incidental, especially compared to another revelation: the university only enrolled 86 freshmen, including both full-time and part-time students.

In 2014 Chicago state enrolled 253 full-time, first-time freshmen. In 2010 it enrolled 523.

Any university would be challenged by such collapsing enrollment coupled with rapid leadership turnover. For Chicago State, however, the developments raise the question of how long a university beset by turmoil in recent years can continue to operate.

Chicago State declared financial exigency in February amid an ongoing Illinois budget stalemate that choked off funding to state colleges and universities. The loss of state money was felt at public institutions throughout Illinois, but it was particularly important at Chicago State. The university draws about $36 million annually in state appropriations, roughly 30 percent of its operating budget. It also receives $5 million in state Monetary Award Program grant funds and $1.6 million in state-funded merit scholarships.

Located on the south side of Chicago, the university serves mostly minority and nontraditional students. Its student body is 75 percent black, according to National Center for Education Statistics data. A quarter of its students are graduate students. About 70 percent are women. Many attend part time.

In the past, some have wondered whether Chicago State's identity as a minority-serving institution in the city of Chicago caused political leaders to avoid dedicating the time and resources necessary to truly fix its problems. Those race and class issues could very well have contributed to the path the university took to its current financial situation. But there is widespread agreement that the cause of the immediate crisis is the state budget situation.

Soon after Chicago State declared exigency, worries rose that it would be unable to meet payroll in the coming months. Chicago State wrote in documents for the state Legislature that the budget impasse caused “an unprecedented financial crisis” and that the university’s “cash flow is nearly depleted and at risk of closing the school.”

The university carried out cost-cutting measures including canceling spring break and ending the semester early. It moved to lay off a third of its 900 employees at the end of April, cuts estimated to save 40 percent of its payroll costs, or $2 million per month. The cuts contributed to the university's accrediting agency placing it on notice over its financial resources and planning.

Illinois did pass emergency appropriations that sent state money to universities. One round in April allotted $20.1 million to Chicago State. A six-month stopgap budget at the end of June included $12.6 million for the university. Together, the appropriations totaled $32.7 million, but they’re slated to cover an 18-month span dating to last year -- so the funding level is significantly below the $36 million Chicago State typically receives for a full year.

Facing that kind of crunch, universities can typically make their budgets work by cutting expenses, building enrollment, raising tuition or drawing on reserves. But the prospects for any of those strategies are questionable for Chicago State after it has talked so recently about closing its doors. The university may very well have lost the public and student support necessary for it to be salvaged.

“It’s sort of like we’ve been shot and we’re lying on the sidewalk and nobody’s calling an ambulance,” said Robert Bionaz, an associate professor of history and president of the Chicago State chapter of the University Professionals of Illinois Local 4100. “It’s sort of astounding to me that this is OK. What’s the rationale here? There’s nothing rational about this.”

There is major concern on campus about the institution’s future, said Bionaz, who frequently writes for a blog highly critical of Chicago State’s administration that was the subject of a lawsuit after it drew the university’s attention. Enrollment has consistently been declining for years, Bionaz said. Traditionally it would drop in the spring and bounce back up in the fall -- but that has stopped happening.

Chicago State faced headwinds even before the Illinois budget situation came to a head. A series of scandals eroded faith in the institution, Bionaz said.

He pointed to controversial hires under the university’s former president, Wayne Watson. Chicago State also lost a lawsuit in 2014 brought by James Crowley, its general counsel, who turned into a whistle-blower. A jury awarded Crowley $2.5 million after he alleged Watson threatened him over the disclosure of public records. Additionally, a state ethics investigation found early this year that Watson violated university policy by making false allegations against two board members who were trying to push him out of office in 2013.

“I don’t see a lot of prospects for the enrollment to increase,” Bionaz said. “The whole enrollment-management section is in shambles, and we’re already the smallest state institution. I just wonder how long we can go.”

Purchasing, library and advising operations have been decimated by the cuts imposed under financial exigency, Bionaz said. The cafeteria was closed. A dormitory didn’t have hot water for weeks. Students were showering at the gym.

Student trustee Paris Griffin brought up the state of campus at the Sept. 16 meeting where Calhoun was released.

“We are disheartened by the state of our campus,” she said. “The cafeteria has been closed for more than two weeks.”

In addition, the library was operating from 9 a.m. to 5 p.m. Monday to Friday for a time, Bionaz said. The hours were troubling for a campus that has a high number of students who work.

“The place is literally falling apart,” Bionaz said. “This is going to require immediate intervention, or it’s going to be beyond your capacity to fix. Because at what point do we become nonviable? Is it when we get to 2,000 [students]? When we get to 2,500? That’s a year away. Maybe a year and a half.”

Bionaz isn’t as pessimistic on short-term survival, though. He pointed out that the institution found money to pay employees laid off this spring -- $2.2 million. It paid Calhoun $600,000 when it parted ways with him as president. Even though Chicago State said it was close to missing payroll earlier this year, Bionaz said he’s inclined to question the numbers.

It’s difficult to evaluate the current fiscal situation because the university has not produced an up-to-date budget book since 2015. But that budget showed money in reserves, Bionaz said.

Bionaz does not want the current Board of Trustees to conduct a search for a new president. There is much anger on campus about how the last president was ousted, and four trustees have terms that end in January, he said.

Frustration regarding Calhoun’s departure extends beyond campus. The change prompted Chicago’s two major newspapers to pen editorials calling for shake-ups to Chicago State’s Board of Trustees. The Sun-Times wrote that Illinois Governor Bruce Rauner should fire any board members who do not cooperate in providing an explanation for Calhoun’s ouster. The Tribune said it is time to clean house among trustees. The Tribune specifically called out the size of Calhoun's buyout in light of the tight financial situation at Chicago State.

“That $600,000 is money that won't be used to improve classroom instruction at Chicago State, already in deep academic trouble,” the editorial said. “It won't be used to shore up the school's wobbly finances after spending an unfortunate $2.2 million, most of it in severance for nearly 400 employees laid off since the beginning of the year. This is a school hemorrhaging cash, failing its students and now drained of its last ounce of credibility.”

The governor’s office wants to do a thorough search for new board members, Rauner said during a Sept. 29 press conference. He said he wants to turn around the institution.

But he also said it’s difficult to get a handle on the situation.

“We’re still trying to get our hands around what is happening at Chicago State, because there is a lot of movement and a lot of things being done without informing our administration or outside folks,” Rauner said. “It’s very troubling. The level of transparency at Chicago State is atrocious.”

Board of Trustees Chairman Anthony Young declined comment when reached by phone. Chicago State’s communications department did not return several requests for interviews and information. Lucy, Chicago State’s interim president, did not return an email seeking comment. The Illinois Board of Higher Education referred requests for comment to the governor’s office, which pointed to Rauner’s Sept. 29 press conference.

The lawyer representing Calhoun, Raymond Cotton, declined to discuss the terms of his departure other than to say Chicago State honored its contract.

“The board honored its commitment that it made in writing to the president,” Cotton said. “When they asked him to depart and he agreed to do it, they honored the contract, the binding contract that they had with him.”

The information void has been filled by speculation.

Sun-Times gossip columnist Michael Sneed quoted an unnamed source asserting that Calhoun painted over a mural on the ceiling of the master bedroom of the university’s president’s home. The unnamed source also said Calhoun had assembled an expensive inaugural budget.

Several sources dismissed that account in interviews with Inside Higher Ed. Instead, they pointed to a four-person management action committee neutralizing the president’s power.

Some observers simply said the relationship between Calhoun and the university appeared to not be functioning. Donne Trotter is a Democratic state senator whose district includes Chicago State.

“How long do you have to stay in a bad relationship before you say it’s not working?” Trotter said. “I’ve used the analogy before that they didn’t see him as the right general in this war for survival.”

On the broader question of Chicago State’s future as a going concern, Trotter said the state budget situation is putting all Illinois universities at risk.

Some of the state’s other universities have felt enrollment declines. Eastern Illinois University reported total head count enrollment of 7,415 this fall, down almost 13 percent from 8,520 a year ago.

Chicago State is in a more vulnerable situation than others, according to Trotter. It did not have as much tuition funding to fall back upon or as large a reserve of funds, he said.

“They’re hanging on edge,” Trotter said. “They’re next to fall off that cliff.”

Still, Trotter didn’t talk about a state budget fix being possible until January. He acknowledged that the much-publicized talk about financial troubles is likely dissuading students from attending Chicago State.

“They knew it would have a large impact on getting people to come there,” Trotter said.

Other state political observers think it could be longer before the budget situation changes significantly. Even after the fall election, the state will have a Republican governor with two years left in his term and who has shown no interest in changing his budget positions. It will still have Democratic legislative leaders opposing him.

It’s not even clear at this point that the political will exists to save a university beset by trouble.

“I don’t think people care,” said Edward Maloney, a Democratic former member of the State Senate who chaired its Higher Education Committee and now lobbies on higher education issues. “I think the people who are immediately impacted by it care, but beyond the immediate area, you talk to any other member of the General Assembly, they don’t care if it closes. They really don’t.”

Chicago State hasn’t shown the ability to recruit students who can graduate successfully. Its six-year undergraduate graduation rate recently fell to 11 percent.

“This could be the nail in the coffin,” said Maloney, who earned his master’s degree at Chicago State. “The only thing that may save them is being a traditionally black institution. The black caucus is pretty powerful in the Illinois General Assembly.”

Many continue to hold Chicago State up as a four-year university serving a local population that can’t travel to attend another institution. Its closure would take away jobs and the realistic chance to attend a university from a large chunk of Chicago’s population.

Some have suggested Chicago State could be merged with another Chicago-area university, like Northeastern Illinois University on the city’s northwest side or the City Colleges of Chicago. Those are just whispers, though. The prospects and pitfalls of such a move remain unclear.

Chicago State Trustee Spencer Leak did not want to comment on the possibility of the university closing. He said it would be appalling.

Leak also declined to comment on the presidential change. But he did say the lower enrollment numbers hurt the university.

“The enrollment problem exacerbates the budgetary problems,” he said. “You can’t justify the need for finances for the university without students.”

Leak closed a telephone interview by making a point of saying that he is praying for Chicago State. He seeks a higher authority when faced with challenges, and the university is faced with challenges now, he said.

“I’m praying for our university,” Leak said. “That may not mean a lot to a lot of people. It may be simplistic. But I’m certainly praying for the university and the faculty and the students.”

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