Cash-starved Chicago State University has laid off nearly 400 employees since the beginning of the year — an astonishing 40 percent of staff.

The cost has been steep: $2.2 million, the bulk of it in severance pay mandated by a long-standing policy that amounts to a golden handshake for many employees at a school that can’t afford a tinfoil handshake.

So cue the outraged editorial? We admit that was our first reaction. But there’s a much larger point here, one that applies well beyond the Far South Side school.

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Chicago State’s generous severance policies aren’t much different from those of most other public universities in Illinois. That is, they’re an artifact of the profligate past in which this state’s universities raised tuition, added staff, resisted consolidation and spent extravagantly because … they could.

Spending, borrowing, debt, pensions, whatever.

CSU and other schools now must confront reality: The Springfield cash spigot threatens to run dry.

The state is dead broke, in hock to the tippy top of the Capitol dome. Public colleges in the state have been squeezed, like almost every institution that relies on state funding. Chicago State President Thomas Calhoun Jr. says CSU has slashed its budget for the coming school year by about 30 percent, to $70 million.

The university “has done much to shore itself up financially,” including the layoffs, Calhoun says. “We are confident that we are in good shape.”

Thousands of low-income and minority students who attend the school will be happy to hear that. But imagine how much better CSU’s financial condition would be if prior management regimes had planned more effectively to trim the top-heavy staff as enrollment has declined.

The school projects another enrollment drop, of about 20 percent, for the upcoming year. And imagine how much stronger CSU would be if it had instituted tighter policies so that terminated administrators weren’t in line for lavish farewells.

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Of that $2.2 million payout, nearly $1.6 million went for severance for about 50 administrators who received lump-sum payments in June, the Tribune’s Jodi S. Cohen reports. And imagine if someone had been held accountable for CSU’s long-running failure to help many of its students graduate.

Instead, the campus was a patronage and spending haven for Chicago Democratic politicians. The pols splurged on buildings, labs and equipment, not on boosting students’ academic outcomes.

We’ve heard from a parade of Illinois university officials that the state’s financial fiasco cripples their ability to recruit top faculty and stellar students. These leaders tell us they need fewer busy-work mandates from Springfield as well as reliable state funding.

We’ve been intrigued by a University of Illinois proposal under development to do just that. But part of the deal should be that universities spend smarter. In other words: No more lavish payouts for departing employees.

Many other public universities follow similar practices, including the University of Illinois, Illinois State, Southern Illinois and Eastern Illinois, Cohen reports. But outside of Illinois, college (or corporate) employees generally get less severance.

Ending this largesse can be one among many expense-side reforms. We’ve heard whispered confessions that the state’s budget mess has forced — helped — university officials to finally calculate, and confront, the inefficiencies of their operations and the flab on their payrolls.

Some Illinois schools have tightened payouts. At Western Illinois University, for instance, terminated administrators now are in line for a maximum of six months’ pay, half the previous maximum payout.

That change was made in 2014 to save the university money, increase flexibility and to bring WIU in line with corporate and university standards outside of Illinois, WIU interim vice president for administrative services Matthew Bierman tells us.

University presidents across Illinois, let’s see more changes like that. The Illinois Way? That’s history. Fail to retrench and some of your schools will be history, too.

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(c) 2016 the Chicago Tribune

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