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Sen. Laura Murphy

SPRINGFIELD – To ensure universities are using tuition and tax dollars in service of their students, State Senator Laura Murphy (D-Des Plaines) advanced legislation out of the Senate Friday to crack down on university administrators who continue to exploit loopholes in the law by receiving massive payouts, or “golden parachutes,” after leaving their positions.

Lawmakers passed the Government Severance Pay Act in 2018 to limit the amount paid in university severance packages. Murphy’s measure strengthens the act by expanding the definition of severance pay and defining limits on compensation.

“Students and taxpayers shouldn’t have to foot the bill for a retired administrator’s six-figure payouts,” Murphy said. “The Government Severance Pay Act was intended to ensure our institutions spend responsibly, with the campus community in mind—it’s time we hold them to that standard.”

Universities typically offer severance packages to end an employment agreement without litigation or arbitration. Upon resignation, many public university administrators are awarded severance packages that pay amounts equal or nearly equal to their entire salary, even in cases of declining university performance under their leadership.

Senate Bill 2240 expands the definition of severance pay to include employees who are transitioning to a new position within a unit of government. It also limits the compensation that employees may receive to the annual compensation of the highest paid employee in their department.

“Public universities in Illinois are already losing students to out-of-state schools with more affordable tuition. Limiting overhead costs is one way we can help keep our institutions cost-competitive,” Murphy said.

Senate Bill 2240 passed the Senate and now heads to the House.