SPRINGFIELD, Ill. — The University Board of Trustees proposed a $78.9 million increase for its fiscal year 2005 budget Thursday even as as administrators are grappling with $58 million less in state funds this year.

The state also approved the fiscal year 2004 budget.

The board approved the budget request for next year — including the 7 percent spending increase despite the dwindling state economy.

The lack of adequate funding has already led to the elimination of hundreds of classes as well as faculty members this semester.

"In terms of academic programs, everyone's heard us talk about the impact," said Chet Gardner, vice president of academic affairs. "We're asking for resources to add back some of those classes."

Additional funding will also be allocated in ways that emphasize salary competitiveness as a high priority, Gardner said.

The approved budget will be reviewed by the Illinois Board of Higher Education in January and after the proper amendments have been made, it will be sent to Gov. Rod Blagojevich. Next, the governor will read and adjust the budget as he sees fit and in February he will send it to legislature. The legislature will then act on the budget during May and June with the governor signing the finished budget in June or July.

The final budget should allow the University to replace some canceled classes, as well as maintain its ability to recruit top-notch faculty by increasing salaries. Faculty members did not receive a raise last year due to the state's dire economic situation, however, this year's budget allows for a 2.5 percent salary increase for faculty across all three campuses.

University President James Stukel acknowledged the need for an increase in faculty salaries, calling teachers "the lifeblood of this great University."

"As a large, comprehensive university, we have some flexibility in managing our way through the difficult fiscal terrain," Stukel said in a statement issued at the meeting. "But substantial spending cuts will only stretch so far, and we're left with a bumpy ride toward our goal of providing excellence for the state of Illinois."

Other items the Board addressed included:

• Ronald Yates was approved as the interim dean of the College of Communications.

• The board approved a contract to renovate and expand the Intramural-Physical Education Building and Campus Recreation Center East.

• The board also agreed to allocate funding needed to hire an engineer/architect for a new building in the College of Business.