UK President Eli Capilouto defends layoffs, apologizes for confusion

lblackford@herald-leader.comJune 13, 2012 

  • More about the layoffs

    The average age of laid-off employees is 48.5, with an average of 10.7 years of service. Tenured faculty were spared any cuts; some lecturers might lose their positions next year.

    The layoffs were spread fairly evenly across staff ranks: 1.7 percent came from the executive and managerial administration, 1.4 percent from professional staff, 1.4 percent from secretarial/clerical and 1.5 percent from technical and paraprofessional staff. Six people were laid off from service and maintenance, about 0.5 percent of that staff. Nine employees were laid off within one year of retirement .

    Of employees who identified an ethnicity, 104 were white, 10 were black and two were Asian.

A week after the University of Kentucky laid off 1 percent of its employees, President Eli Capilouto called the cuts an unavoidable part of moving the university forward with goals to improve undergraduate education, build new classrooms and pay employees more.

"We deeply regret — deeply regret — the loss of any jobs here, but we know and feel very confident that we have the workforce, the expertise and the excellence to provide a student the best education they can find anywhere," Capilouto said Wednesday in an interview with the Lexington Herald-Leader.

In a campus-wide e-mail Wednesday afternoon, Capilouto released many more details about the need for layoffs, and apologized for campus-wide confusion over the layoffs.

"Since I became president nearly one year ago, I have put a premium on transparency and candor," Capilouto said in the e-mail. "In that spirit, I apologize for any confusion created by how we have recently been communicating the changes taking place on our campus."

Last week, UK officials announced that 140 people, about 1 percent of UK's 14,000 employees, would lose their jobs in the first major layoffs in recent memory. An additional 164 positions will not be filled. Current faculty have not been affected, but some lecturers may be let go next year.

According to the e-mail, there were about 65 layoffs in 18 colleges, not including 38 people let go from UK Healthcare. An additional 27 people worked in administrative and support units such as IT, human resources, the art museum and institutional diversity. Information on the last 10 people was not available, Capilouto said.

He said the budget process has hewn closely to the three priorities recommended from a university review committee he convened last fall: an enhanced focus on undergraduate education, new residential and classroom buildings, and better compensation for faculty. Those priorities — $69 million in spending — will be seen in the $2.6 billion budget the Board of Trustees votes on Tuesday.

UK will get $47 million from tuition increases — 6 percent in 2012 and 3 percent in 2013 — but that will be partially offset by $20 million in state funding cuts. The resulting $43 million hole over two years will be taken care of by both layoffs and program cuts.

"I think you could call it a rebalancing," Capilouto said. "We have grown faculty ranks in preparation for enrollment growth, we have got to have facilities where people are educated, and where discoveries take place, and then we have got to provide competitive salaries.

"Cutting the salaries of 14,000 people does not get one ahead, they're extremely demoralizing, they don't solve your problems permanently."

The budget will reflect those goals with several new initiatives over two years:

 $15 million to pay the debt on $200 million in bonding for classroom space, yet to be approved by the General Assembly;

 $19.5 million to scholarship cost increases created by the tuition increases and expansions of Singletary Scholarships and the honors program;

 $21 million for a 5 percent merit pool raise for faculty and staff for 2013-2014 fiscal year;

 $2 million for a deferred maintenance fund for UK's aging buildings;

 $9.1 million in strategic initiatives that reward academic units for increased teaching, returning a percentage of tuition dollars back to those departments;

 $2.5 million in increased utility costs.

UK was helped in the last two years by $38.5 million in federal stimulus funds that everyone thought would grow the economy. Capilouto said it would be "foolhardy" to wait until the economy bounces back.

"In other words, should we hunker down and try and patch the holes in our budget with short-term approaches or one-time only in hopes that things will improve enough in coming months?" he wrote in the email. "Hunkering down is not a strategy ... . It's avoidance.

"We must find a way now to move forward, building a long-term sustainable budget, one that gives us a higher probability of revenue growth.

"That means understanding what size employee base we can sustain with today's dollars, while making investments that will allow us to pay competitively and build for the future."

Outlook at other schools

However, a more cautious approach appears to be rewarding Kentucky's other public universities. With the exception of the University of Louisville, which is laying off fewer than two dozen employees, no other university will shed staff.

Although budget constraints at Murray State are "concerning," spokeswoman Catherine Sivills said Tuesday, the university has avoided the layoff route.

This next year the president will appoint a committee to look at programs and different departments in order to save dollars," Sivills said, referring to an "intricate review" President Randy Dunn has proposed to the board. "The way Dr. Dunn had managed it — we've been very conservative."

Mike Walters, chief financial officer and vice president for administration at Morehead State, said the university focused on vacant positions, of which 23 will be eliminated next year.

"Sometimes it's a matter of your strategy and a matter of timing," Walters said. "We were fortunate that we had positions that we could eliminate that didn't have individuals currently in them."

Walters said every institution is different, however, and while a 6.4 percent cut for Morehead State means $2.8 million, it means nearly $20 million for UK.

"I'm sure that they've taken a very strategic approach as well," he said. "The budget hole is just on a much larger scale."

The Kentucky Community and Technical College system will vote on next year's budget Friday. The system is proposing a 3.7 percent increase in tuition ($135 to $140 for in-state students) and 2.5 percent salary increase for full-time employees.

On Tuesday, two UK faculty trustees on the board of trustees — Irina Voro and John Wilson — sent a letter asking for faculty to ask the administration to spend less on new initiatives in order to save jobs.

Voro and Wilson say cuts have fallen disproportionately on staff and administration. Another round of reductions is supposed to take place by January.

In a phone interview Wednesday, Wilson said new initiatives, such as salary increases, are good, but "we just think the dosage is way too much. It's causing cutbacks that are fairly massive."

But Stephen Voss, a UK political science professor who has researched education policy, said faculty members send an "ironic mixed message" when it comes to university personnel decisions.

"A few months ago, faculty representatives were criticizing the increasing imbalance away from faculty, away from investment in the classroom, and toward staff and administration," Voss said. "Now that we're seeing a reorganization, with staff being thinned out relative to faculty, we're hearing complaints about a shift in the opposite direction. It makes us sound as though we want it both ways.

"I think what we're seeing here is blowback because what used to be an abstraction has become real, with real people being hurt."

Uncertainty for next year

The pain may not be over yet, as Capilouto has asked campus to prepare for the second year of the biennium's cuts by next January.

Sheila Brothers, the staff trustee on the board, said there's a lot of "uncertainty and fear" on campus right now.

"Part of the uncertainty and fear is we know we have cuts we have to accommodate, but we don't know what cuts are going to mean," she said.

Capilouto wouldn't comment on whether more layoffs were coming, saying he wouldn't talk about hypotheticals.

It's possible UK's revenue picture could change. Increased enrollment, plus better retention, could result in bigger revenues that could change the $23 million hole in the second year of the biennium.

"If those happen, we could have a whole different picture," he said.

Linda Blackford: (859) 231-1359Twitter: @lbblackfordStaff writer Daniel Moore contributed to this story.

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