The state's public universities could suffer minimal pain or double-digit cuts in 2012 depending on the fate of Gov. Steve Beshear's long-shot proposal for gambling.
University leaders didn't immediately leap Tuesday to support the governor's expanded-gambling plan, which faces a skeptical General Assembly.
Officials of the eight public universities and the Kentucky Community and Technical College System politely praised Beshear for what they called his commitment to preserve higher-education funding, then turned to lobbying the legislature.
University of Kentucky President Lee T. Todd Jr. said the presidents won't back any particular method for raising revenue.
"I firmly believe that the legislature and the governor want to help higher education if they have the resources," he said. "We'll leave it up to them to figure out where the revenue source comes from."
Beshear's plan largely aims to protect education.
The Support Education Excellence in Kentucky fund, the major source of money for K-12 schools, would be exempt from cuts for fiscal years 2011 and 2012 under the proposal. Beshear recommends preserving SEEK funds even if the gambling measure doesn't pass.
Universities would be spared cuts in the first year — thanks in part to leftover federal stimulus money— but would be cut 2 percent in 2012. If Beshear's bill for slot machines at racetracks doesn't pass, universities would face the same level of cuts in 2012 as other state agencies — 34 percent, said Mary Lassiter, state budget director and secretary of Beshear's cabinet.
The governor said "he believes strongly that supporting higher education is vital to the future of the state," said Robert L. King, president of the Council on Postsecondary Education.
That "puts us a lot further ahead than if the governor proposed cutting higher education, as we've seen in other states," he said.
Doug Whitlock, president of Eastern Kentucky University, said it's vital that state lawmakers find new revenue from somewhere.
He said it would be "impossible" for schools to make up for state cuts by increasing tuition.
Beshear also is recommending selling 20-year bonds to increase by 27 percent the amount the state can spend for need-based scholarships over the next two years. The move would accommodate 9,800 more scholarship and grant recipients, he said.
His proposal also includes $584 million in capital construction for universities that will be paid for with bonds.
State education agencies — the Council on Postsecondary Education and the Department of Education — would face the same levels of cuts as other agencies under the plan: 2 percent in 2011 and a flat-line budget in 2012. That is also contingent on passage of his gambling plan.
For students, Beshear's proposal calls for per-pupil spending to increase through the SEEK formula from $3,866 to $3,891 in 2011 and to $3,927 in 2012.
Other features of the K-12 education proposal include $21.9 million over the biennium to implement a bill that revamps the state's student-testing system and exempts the Teachers' Retirement System from budget cuts.
Robert Sexton, executive director of the Prichard Committee for Academic Excellence, said Tuesday that he was surprised Beshear would rely so heavily on the approval of expanded gambling.
Sexton said any ultimate solution to the state's financial problems must focus on reforming the state tax system and controlling health care costs.
Clark County School Superintendent Elaine Ferris said even a 2 percent reduction in education-department funding would affect her school district "and not in a good way."
"It would have a real impact on us because this school district depends more on state effort than it does on local effort," she said. "Any time there is a reduction in state effort, my district suffers."
Such cuts probably would hit family-resource centers in the Clark County system, she said, and it would affect personnel. Other districts like hers also could be affected, she said.