Kentuckians who've been paying attention are acutely aware of the deep erosion in state support for higher education. Still, it was painful to see it stated so starkly in a recent report by Moody's, the credit ratings agency.
Campuses can't keep raising tuition to make up for lost state support, Moody's observed, because of "Kentucky's weak socioeconomic profile."
Kentucky has "posted persistently lower wealth levels, and a large percentage of its population is below the poverty rate compared to national averages."
And there's the vicious circle: Kentucky can't pull itself out of poverty and compete in a global economy without educating more of its people.
Even as other states restored higher education funding after the Great Recession, Kentucky has kept cutting. A 21 percent drop in state funding — or a loss of $190 million — from 2008 to 2017 has cost jobs and programs at campuses across the state and caused tuition to soar. Tuition revenue increased 50 percent on average from 2008 to 2013 and by an additional 13 percent from 2013 to 2017.
Undergraduate tuition for a Kentucky resident at the University of Kentucky or University of Louisville topped $12,000 a year in 2017.
Demographics are not on the side of Kentucky's public universities, either, as the pool of college-age people is shrinking.
Fortunately for Lexington, UK — because of its size, broad offerings and ability to attract out of state students who pay higher tuition — is in a stronger position than the smaller comprehensive universities.
The challenges for the comprehensive universities and two-year community and technical colleges will be compounded by the state's new performance-based funding formula which is penalizing institutions in the regions where economic hardship is greatest.
Lawmakers for the first time this year imposed taxes on some services and raised the cigarette tax. As a result, lawmakers were able to somewhat protect public schools though continuing to cut higher education. The tax increases, which take effect July 1, were largely offset by cuts to individual and corporate income taxes, however. Overall, the revenue increase from the tax changes will be less than $200 million in an $11 billion general fund.
The legislature didn't touch Kentucky's voluminous tax exemptions, which now total more than what the state collects in taxes.
However, this week a legislative task force began looking at tax exemptions with an eye, we hope, to closing loopholes and bringing in more money.
Kentucky will fall further behind if it can't keep up educationally. The state needs more tax revenue to support education at all levels. Lawmakers must recognize that reality, the sooner the better.