UK President Eli Capilouto
University of Kentucky President Eli Capilouto said budget cuts proposed by Gov. Matt Bevin would negatively affect every area of the state’s flagship university.
“We can’t easily absorb cuts of this magnitude,” he told the House Postsecondary Education Budget Subcommittee on Thursday. “We can’t protect any part of our campus in the face of these draconian cuts.”
Bevin has proposed a 4.5 percent cut during the second half of this fiscal year and then a 9 percent cut in fiscal 2017. In 2018, Bevin’s plan would put a third of state funding into a performance-based model that doles out money depending on criteria such as graduation rates. However, Bevin has not said what criteria he thinks should be used.
By 2020, 100 percent of state funding for higher education would be based on performance.
Capilouto, along with other higher education officials, has expressed concern about the uncertainty of the formula.
But House Minority Whip Jim DeCesare, R-Bowling Green, said Thursday that part of the plan may be pushed back because of so many concerns from legislators and experts. He said that the Bevin administration faced a “learning curve” on higher education.
“I don’t think all the nuances of postsecondary education are understood,” he told Capilouto at the committee meeting. “Safe to say, the performance-based funding is off the table.”
Bevin has said he wants to work with university presidents on creating a funding model after the legislative session concludes in April, but it’s not clear how that would affect a two-year budget document that’s supposed to be finalized by April 15.
“I can’t in good conscience provide base funding on a ‘will come’ basis,” DeCesare said. After the meeting, DeCesare said he was speaking for himself because of concerns he’s heard from legislators in both parties.
On Thursday, Bevin agreed the plan will take more time. That might mean the two-year higher education budget would have to be amended in 2017.
Bevin said he wanted over the next 18 months “to come up with a truly thoughtful, outcomes-based funding formula that invites input from each and every one of our presidents, that will be effective, and to make that effective starting in FY18.”
But university presidents have said that it’s hard to plan for the future if a major chunk of funding could be taken away in two years.
For example, Capilouto pointed out that UK has lost $55 million in state funding since 2008. UK’s $3.4 billion budget mostly comes from hospital revenue, but the $280 million UK gets from the state’s General Fund is an important driver of academics. Bevin’s proposed budget would cut $13 million in the fiscal year that ends June 30 and $25 million the following year. As much as $85 million could be affected by the proposed performance-based funding in fiscal 2018.
Bevin has also said he wanted performance-based funding to encourage universities to graduate more students in fields that lead directly to jobs instead of liberal arts.
Capilouto said that is already happening at UK. Since 2009, UK has seen a 38 percent increase in the number of engineering graduates, a 15 percent increase in medicine, 11 percent increase in health sciences, 10 percent in nursing, 18 percent in business, and a 22 percent rise in the other science and technology disciplines.
Capilouto also noted concern about large tuition increases that have come after previous state budget cuts. He noted there would be “pressure” on tuition if lawmakers approve Bevin’s proposed budget, but Capilouto declined to provide any specifics or to say if the cuts might lead to layoffs.
He noted that UK’s tuition revenue has increased $221 million since 2008. Of that, $128 million came from a 15 percent increase in undergraduate enrollment and $93 million came from allowing more out-of-state students, who pay double state tuition.
Of that, $56 million paid for more scholarships and financial aid. An additional $110 million paid for counselors, more security, more teachers and other help to the academic enterprise.
“I don’t apologize for not standing still” in the face of declining state support, he said.
After the meeting, Capilouto said he’s been pleased by Bevin’s willingness to listen to the universities and their points of view. Bevin said last week that he would give universities flexibility on the timing of cuts, allowing them to cut less immediately and more later.