UK President Capilouto sounds alarm about potential funding cuts in state budget
The University of Kentucky could see budget cuts over the next two years if the proposed state budget passes as written, UK President Eli Capilouto said Monday.
The proposed state budget — which passed in the House of Representatives last month and has been sent to the Senate — would cut funding for higher education across the state. UK, Kentucky’s largest university, would see cuts of 4% in 2026-27 and 3% in 2027-28.
“A proposed cut, even over two years, may directly affect our ability to provide the same level of support, education, research and other essential opportunities that are critical to the success of our students and the Commonwealth,” Capilouto said in an email sent to the campus on Monday evening. “Operating dollars help fund institutional financial aid, academic programs, advising and student services, and help support the salaries and benefits of the faculty and staff who uphold our sacred promise to our namesake.”
Aaron Thompson, president of the Council on Postsecondary Education, said in total, Kentucky’s public colleges and universities would see cuts of $42 million in 2026-27 and $73.5 million in 2027-28.
“At a time when enrollment is stabilizing, workforce demands are increasing, and campus costs continue to rise, these reductions will require institutions to make difficult decisions that could impact student services and operations,” Thompson said. “In the last seven years, Kentucky has seen very positive outcomes in postsecondary completion, retention and persistence. In addition, we have seen enrollment growth and student debt reductions, and have maintained small tuition increases by percentage. We must continue this momentum and not move backward.”
While UK’s budget is funded from a variety of sources, including UK HealthCare revenue and tuition, state dollars are “the critical first dollars into our budget,” Capilouto said. Capilouto spoke before a House budget committee in February.
Public universities have been in the crosshairs of Republicans at the state and federal level during the second administration of President Donald Trump. Federal changes to research funding have impacted universities, along with investigations into diversity, equity and inclusion efforts at universities.
In Kentucky, a new law banning spending on DEI has brought major changes and restructuring to state universities, and the performance funding model was restructured in recent years, changing how state funding is allocated.
UK is seemingly the first public university in Kentucky to raise concerns about the proposed cuts in the current proposed state budget, although several schools adjusted previous budgets amid earlier cuts by the state and federal government.
The university’s budget for 2025-2026 was $8.6 billion. While that’s the largest budget in the school’s history, it’s also a smaller year-over-year increase than in previous years. University administrators spoke about the uncertainty surrounding the budget before it was approved, saying there were many unknown factors as higher education undergoes significant changes, including state and federal policies.
“This budget was actually very difficult, very challenging, to put together because of so many unknowns,” Angie Martin, UK’s chief budget officer and vice president for financial planning, said last year.
In Kentucky, universities receive funding based on a performance funding model, which allocates money to schools based on a set of metrics. Those include graduation and retention rates, number of credentials and degrees awarded, and degrees in high-demand fields.
UK received $364 million in state appropriations for the 2025-26 fiscal year, according to university budget information.
“We know state leaders are working to balance many needs across the Commonwealth, and we appreciate their thoughtful stewardship,” Capilouto said. “There are two months left in the legislative session and many more steps remaining the process. Still, we want our community to know about these issues as we learn them to understand what such reductions would mean if they were enacted.”
This story was originally published March 3, 2026 at 10:36 AM.