This story has the higher ed bubble and the big government bubble in one story.

Kellie Woodhouse reports at Inside Higher Ed.

Burdened by a Budget Impasse

Some universities in Illinois don’t know how they’re going to make payroll in a few months if the state’s politicians don’t pass a budget soon.

Now halfway through the fiscal year, Illinois’s Legislature and governor still have not agreed on a 2015-16 budget, forcing countless agencies and services — including the state’s multibillion-dollar public higher education sector — to find ways to fund operating costs and scholarships that would otherwise be covered by the state.

As a result, universities are dipping into reserves, laying off faculty members and even considering borrowing against future state appropriations to cover costs while they wait for a state budget. Officials characterize the landscape as a desperate one.

“We are making ourselves limp through month to month,” says Randy Dunn, president of the Southern Illinois University System, which has two campuses with a combined enrollment of about 31,000. SIU was expecting roughly $200 million in state appropriations this year, along with $18-20 million in funding to cover Monetary Award Program (MAP) grants, which are state-funded grants for low-income students.

In the summer, as the governor and Legislature were debating the budget (at the time, Republican Governor Bruce Rauner proposed a 31.5 percent cut to higher education, which the Legislature wanted to reduce to about 8.6 percent), Dunn never suspected Illinois would go into 2016 without a ratified budget. Even now, he and other university officials in the state aren’t sure when the governor and Legislature will successfully negotiate a new budget. Some who are optimistic are hoping for this month, but others predict that it will be sometime after the March primary elections. Those with the grimmest of outlooks are worried the state will skip setting the budget this year entirely and instead pass a two-year 2015-17 budget in the spring.