Trustees approve University of Kentucky budget that brings 'gut-wrenching' change

dmoore@herald-leader.comJune 19, 2012 

A budget that brings "gut-wrenching" change to the University of Kentucky was approved Tuesday by a 17-2 vote of the UK Board of Trustees.

The $2.6 billion budget reflects drastic cuts in revenue, the likes of which are unprecedented, said Angie Martin, vice president of financial operations.

"It has been the first time I have ever seen such pressure on all our major revenue sources at the same time," Martin said. "Normally, there would be a release valve, if you will, that we could shift and we can move money. That's not the case this time."

Tuition increases of 6 percent for 2012-13 and 3 percent for 2013-14, coupled with anticipated enrollment growth, are expected to take care of about half of the $43 million deficit, caused by a $20 million cut in state funding and $23 million in increased costs. Program and personnel cuts will cover the rest.

President Eli Capilouto emphasized that the university took "measured steps" before making cuts, including laying off about 140 workers earlier this month and eliminating 164 vacant positions.

"Many people have characterized these as across-the-board cuts. They're not," Capilouto said. "They were planning targets. We thought it was simply unfair to spring on our faculty and staff a formulaic approach that had not been widely discussed."

Capilouto has called the cuts unavoidable to reach specific goals of improving undergraduate education, building new classrooms and paying employees more. Those priorities are funded with $69 million in new spending initiatives in the budget.

Finance Committee chairman James Stuckert praised the thoroughness and "candidness" of the budget proposal, which reflected "shifts" that might be difficult for some to accept, but he said UK needed to move forward.

Change "is gut-wrenching in some cases," Stuckert said. "We can't keep doing the same thing over and over. We've seen this budget represent a dramatic shift, the results of which will be very favorable to the university."

Trustee Pamela May said she had seen letters and emails from opponents of the budget proposals.

"I would ask that, going forward ... that monitoring continues to make sure we are not jeopardizing undergraduate education," May said.

Faculty trustee John Wilson and staff trustee Sheila Brothers voted against the budget.

Wilson said he wanted the faculty's concerns to be characterized correctly. They aren't resistant to budget cuts, he said, but they are disturbed by UK's layoff process and the size of the president's spending initiatives.

"We must do better moving forward," he said. "(We ask) for a degree of flexibility and compromise that, frankly, we haven't seen at this institution."

Brothers said she thought that the cuts were too deep and that some employees might have been subjected to favoritism among administrators who made layoff decisions. She's concerned, she said, that the layoffs amount to nothing more than "having numbers add up on a spreadsheet."

"Many employees were and are still willing to suffer a pay cut rather than see their colleagues leave," Brothers said.

Trustee Jo Curris voted for the proposal but agreed with Wilson and Brothers that the university's method of informing terminated employees needed to improve, citing claims that some were "literally walked out of the building" after an administrator fired them on the spot.

"It is the 'kindness' factor that I would simply ask we take into consideration as we go into the next round of cuts," Curris said.

Capilouto said he had listened to the "honest" worries about the cuts during the past weeks, but he insisted UK adhered to a standard of professionalism when executing them.

"We did not trivialize these difficult decisions as a spreadsheet exercise," he said. "There is a process here."

Stuckert said he has been forced to fire many people during his career and has seen the disruption to their lives. But the university would be "insane," he said, to keep doing the same budgeting measures over and over.

"I do feel sorry for anybody who is dislocated," Stuckert said. "Progress is not easy. But we must change our direction. We've got to do it."

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