House Democratic leaders unveiled a compromise state budget plan Friday that would cut higher education 2 percent in the next fiscal year, but university presidents said they will accept larger cuts.
Late Friday afternoon, Gov. Matt Bevin released a letter signed by seven of eight university presidents to him and Senate President Robert Stivers and House Speaker Greg Stumbo in which they said they could manage “the governor’s final offer” of a 2 percent cut in the ongoing fiscal year “if it is determined by the courts to be permissible,” and a 4.5 percent cut in the following two years.
“We make this difficult decision based on our trust that you have committed to making new investments in higher education in the following biennium, investments that will enhance our state’s economy and the health and well-being of Kentuckians,” the presidents said.
The letter also was signed by the president of the Kentucky Community and Technical College System. It was not signed by Kentucky State University President Raymond Burse.
House and Senate leaders are scurrying to reach an agreement on a two-year, $21 billion state budget that all lawmakers could vote on Tuesday, the final day of this year’s law-making session. Stivers said there are no meetings currently scheduled between the House and Senate but his staff has alerted House staff “of our ability to sit down for a discussion this weekend.”
If no agreement is reached, a costly special session would be needed. If there is no new state budget by July 1, a partial shutdown of state government would go in effect. Under it, the governor could only spend money on constitutionally required services and federal mandates, such as Medicaid.
The university presidents said failure to approve a state budget could do “substantial damage” to their institutions.
Their reference to a 2 percent cut this year was in response to Bevin’s March 31 order to cut higher education 4.5 percent this fiscal year. Attorney General Andy Beshear is expected to decide Monday whether to file a lawsuit in Franklin Circuit Court challenging the legality of Bevin’s order.
In addition to the current-year cut, Bevin had proposed 9 percent cuts to universities and many other state agencies in each of the next two fiscal years to shore up the state’s ailing public pension systems. They have a combined unfunded liability of more than $30 billion.
Under the latest House plan, higher education would be cut by 2 percent during the first year of the biennium, and that funding level would be maintained in the second year. All proposed cuts to K-12 education would be eliminated.
“We have worked hard at finding a middle ground since budget talks first began, and we have not gotten much back in return,” House leaders said in a statement. “However, our university presidents have been put in a position that is unfair and unwise. We still think that postsecondary education should not be cut, but if it is, our plan is the one that should be followed.”
Stivers, R-Manchester, said he appreciates “that the House has agreed that some level of participation is needed from our postsecondary institutions in order to address our state’s ailing pension systems.”
But he noted that university presidents “are willing to go along with the Senate’s middle-ground compromise of a 4.5 percent reduction over the next two fiscal years.”
The House plan also calls for funding the “Work Ready” scholarship program, which would pay tuition for new high school graduates going to community college after existing state scholarship aid programs have been used. That proposal would cost $13 million in the first year of the budget and $20 million the following year.
“This proposal maintains the Kentucky House Democratic Caucus’s commitment to public education while attempting to move the budget process forward,” House leaders said Friday.
They also said the legality of Bevin’s decision to cut universities in the ongoing fiscal year should be reviewed by the courts.
“As for current-year cuts, those are being reviewed by the attorney general, and we continue to believe the governor does not have the authority to take this step,” they said. “We believe that matter should be left up to the courts.”
Beshear, the son of former Gov. Steve Beshear, has said that the legislature has exclusive authority over the budget and that a governor cannot make any budget cuts unless there is a declared shortfall in revenue.