NIU president John Peters told area business leaders Thursday that further state budget cuts for higher education likely will damage the area’s economy.

Peters used data from a new study conducted by NIU’s Center for Governmental Studies examining the economic impact of NIU on DeKalb County. Results from the study have not been released publicly, but general results from the impact study were given to him for his annual roundtable speech to the DeKalb County Economic Development Corporation.

“The total direct and indirect sales and revenues NIU brought into DeKalb last year approached $385 million, up 50 percent from a decade ago,” Peters said.

That increase was with a mere 15 percent increase in state funding during the same time period, he said.

Further, Peters offered a warning to the area business leaders.

“For every $1 million reduction in state funding, the community stands to lose $1.5 million in activity,” Peters said, using data from the new study.

Peters also warned that the actions he most wanted to avoid, layoffs, furloughs and salary reductions, may become a reality at NIU.

The president quoted a study used by the state legislature that found NIU to have the lowest administrative cost of any public university in Illinois, and said 70 percent of the school’s budget goes toward academic programs, with the remaining 30 percent used for administration, student and community services, the physical plant and maintenance.

Peters also discussed increasing enrollment at NIU. He said tuition only covers about 40 percent of a student’s total costs, and with 1,100 new students accepted for the fall 2002 semester, amidst continued budget cutbacks, NIU soon will have to examine reducing the number of incoming students, and possibly place an enrollment cap on upcoming admissions. Peters said he didn’t think the university could take on more than 25,000 students unless the state can supply more money to NIU.

Even though NIU has taken steps to cut spending, Peters said no one was prepared for the state’s request for public universities to place 8 percent of the remaining budget on reserve. The request came three-quarters of the way through the fiscal year, meaning public universities must find a way to save 8 percent, or in NIU’s case, $8.66 million of its remaining budget for the fiscal year 2003.

“I’ve spent the last three weeks trying to figure out how to save the fiscal year 2003 budget without even talking about ’04,” he said.

Not everything in the economic future for DeKalb County is bleak, however.

The study found that students are spending an increasing amount of money in the area, especially as entertainment venues and retail outlets continue to open in DeKalb.

“Students are bringing more people to DeKalb, whether it’s their parents or friends, now that there’s something to do,” he said.