SPRINGFIELD - Gov. Rod Blagojevich is threatening to slash state funds for universities and other state agencies in order to plug portions of the state's budget deficit.

The result, said university presidents, could be employee layoffs and other "extreme" financial maneuvers.

On Thursday, the Illinois Senate approved a plan to permit the governor to transfer up to $530 million in funds that are set aside for special purposes, such as environmental clean-up and medical research. He would be able to use that money to help close a $750 million budget hole.

But, the proposal is meeting opposition from House Speaker Michael Madigan, D-Chicago.

To avoid cuts, the governor's budget office has instructed university presidents to lobby members of the House to approve the controversial transfer of money.

"If they don't do this fund sweep, we're going to lay people off. We don't have a choice," Southern Illinois University President Glenn Poshard said. "Where are we going to get $12 million?"

State universities are backed into a corner because the end result is a delay in state appropriations for higher education, said Southern Illinois University spokesman Dave Gross.

"They (state office of budget management) cannot cut our appropriations. That can be done only by an act of the General Assembly. But the result is, we cannot access our appropriations in time to cover what we pay out of our local income funds. So, technically, it is a cut. It creates a financial hardship on the university," Gross said.

If the cuts are executed in the spring or early summer, Illinois State University stands to lose nearly $7 million. Western Illinois University would receive $5 million less and Eastern Illinois University's budget would be cut by more than $4 million.

"The impact is unfathomable, mostly because most of our costs are wrapped up in personnel and we have to pay those salaries, we want to pay those salaries," said ISU President Al Bowman. "So it would create an extreme situation."

Specific details of how the potential cuts would affect universities were not available Thursday.

"It would be a huge hit," said EIU President William Perry. "We would look for expenditures we have around the university which might be programmatic ? but we're not going to make a change to the tuition."

Blagojevich spokeswoman Kelley Quinn said funding for other state programs, including the Department of Natural Resources, the Department of Agriculture and early childhood and secondary education programs, also could face cuts if the fund transfer concept isn't approved.

"It's not just higher education and state universities, but programs across the state," Quinn said.

It's not the first time the governor has threatened to cut programs during tough budget times. Last year he suggested laying off 90 percent of the state police force in hopes of getting his way on a budget vote in the General Assembly. Blagojevich did not follow through on the threat.

Madigan spokesman Steve Brown said the best way to start recovering revenue would be by collecting money doled out to Senate Democrats for their own projects in 2007.

The measure is House Bill 473.

- Scott Fitzgerald of The Southern contributed to this story. He can be reached at 351-5076 or via e-mail at scott.fitzgerald@thesouthern.com.

kartikay mehrotra@lee.net

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