4.11.09

MORE CASH FLOW GAMES. The state's propensity to allocate money but not to spend it is ubiquitous. The capital bill includes funding to renovate the Stevens Building and remodel Cole Hall, but the expenditures have not yet been authorized. The state's revenue enhancers include planned increases in taxes on cigarettes and video poker machines, an illustration of the inverse-elasticitity principle for reducing excess burden conflicting with the Pigouvian principle for offsetting externalities. At Urbana, the cash flow games have encouraged doomsday planning.

The University of Illinois has received only a small fraction of the $317 million it is owed by the state for this fiscal year and has effectively frozen many open positions.

University spokesman Tom Hardy says the state's government has paid the school only $400,000 so far as it wrestles with a budget
deficit.

Hardy says open positions that normally would have quickly been filled now require approval from a high-ranking administrator.

Outgoing university President B. Joseph White says furloughs are becoming an increasingly likely possibility for employees. The university set up a plan last summer to furlough workers if needed.

I'm on a search committee again, and I'd better buy trip cancellation insurance along with my 'plane tickets.

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