Cut some perks for UK administrators

October 26, 2012 

In the grand scheme of the University of Kentucky's budget, the cushy extra retirement benefit afforded top administrators isn't a big deal.

But that's not the point. The point is the benefit establishes a special class within the university.

UK pays 15 percent of the salary for these top administrators — with annual salaries from $161,000 to President Eli Capilouto's $500,000 and UK hospital president Michael Karpf's $792,451 — into retirement accounts.

For other employees, the university matches a 5 percent retirement contribution with a 10 percent allocation.

Capilouto, who faces a nearly $50 million budget hole due largely to reduced state funding, has cut a number of administrative positions and eliminated this longtime perk for new hires.

The faculty Senate asked him to eliminate that benefit for current employees and cut salaries for the highest-paid administrators. He has rejected salary cuts.

Spokesman Jay Blanton said the president "believes strongly he shouldn't go back on incentives that were promised in the past."

The whole point of this budget-cutting exercise is that things aren't the same. Students face increasing tuition year after year, teachers worry they will carry heavier class loads and staff struggle to do their work with fewer resources. No one is getting the deal he or she anticipated from UK.

Creating a culture where everyone buys into a common goal is always important, but especially so in tough times. It will be hard for Capilouto to accomplish this unless he shows that his inner circle has more skin in this painful game.

There's a larger point about leadership here.

Lexington Mayor Jim Gray, for example, has cut his own $140,000 annual salary in half and required two-week unpaid furloughs of his commissioners and top-level staff.

Likewise, Gov. Steve Beshear, facing huge budget problems in 2008, announced that he and his top staff would take a voluntary 10 percent pay cut.

These were largely symbolic actions given the size of local and state budgets; but at least citizens, employees and others feeling the pain knew it was shared at the top.

UK's most important promise is to deliver an excellent education to its students. To accomplish this, everything needs to be on the table for consideration, including the extra retirement benefit for top administrators.

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