ISU Board of Trustees Authorizes Short-Term Borrowing

Illinois State University's Board of Trustees today approved the potential for short-term borrowing to meet salary and other expenses.

Because of a possible delay in appropriated moneys from the state, the Board authorized establishment of a line of credit not to exceed $25 million.  The borrowed moneys will be repaid within 12 months and shall be used for no purpose other than payment of salaries and other expenses authorized in the University's state appropriation. 

Due to the state's financial crisis, reimbursements of appropriated revenues to Illinois State have become delinquent and unpredictable, and the state has not provided a timeline for payments.  The General Assembly has proposed legislation to authorize universities to use short-term borrowing to cover cash shortfalls. 

Illinois State University will issue a request for proposal to secure a line of credit with a financial institution to provide for maximum flexibility in meeting the University's obligations. The University will likely negotiate a contract for two or more years in case the state's fiscal crisis and authorizing legislation is extended.