Saturday, January 30, 2016

Bevin's budget would cut faculty, shift more cost to Kentucky Students

Report to the EKU Faculty Senate

Last Tuesday night in his budget address before the General Assembly, Gov. Matt Bevin chose to not mention tax reform. In the midst of other bad news, it seems to me this omission was perhaps the worst news of all. Without a modernized tax code – one that closes existing loopholes and broadens the state’s revenue base - the state is going to be forced to cut more and more programs for the foreseeable future. Services to Kentuckians shrink along with the size of the government. If this is going to be the new normal it is hard for me to imagine a bright future for far too many Kentucky students. Some can afford college today, but may not be able to tomorrow. Instead of building a foundation for a stronger economy, as President Benson noted, the governor’s proposed budget is only “addressing the collateral symptoms and outcomes of systemic problems.” 

The governor’s comments about higher education were telling and seemed to expose a vocational mindset - one that views higher education as an individual good only, and not a common good that benefits the state and our economy as a whole. This kind of thinking would seem to discount the liberal arts, and the economic benefits derived from an educated citizenry, while signaling a narrow view of higher education as little more than a jobs program. In a conference call with university presidents last week, Bevin stated that, “access to education is a privilege, and not a right,* and the cost to educate our citizens must fall to those who benefit, from those who consume it – students.”

I cannot predict with any specificity what will happen to tuition at EKU or what percentage of our students will be unable to stay in school under the governor’s budget. But we are all aware of a number of students who are taking out loans while working many hours, and just barely scraping together enough money to attend school as it is. 

To me, it feels like equity is about to take a big hit, and the work of being a school of opportunity is about to get even harder. At the same time, the university cannot sacrifice quality, so tuition is sure to rise. Them that's got shall have, them that's not shall lose.

You may have heard about performance measures as a new way of looking at higher ed funding. This has been under discussion for several years but only as an incentive for a relatively small percentage of the budget. But under Governor Bevin’s plan the entire budget could be performance-based. That necessitates a fair and reasonable set of metrics. But there are indications that the governor’s office might choose to dictate the metrics. Given the governor’s view of the purpose of higher education, this possibility should be troubling to all who value the liberal arts. 

Of more immediate concern to the campus, the governor’s budget calls for a 4.5% cut to higher education during the current semester** followed by a 9% cut over the next 30 months. It is not my desire to alarm anyone. But neither do I want to sugar coat what I believe to be the realities of the situation. With ~85% of the university budget comprised of personnel, people and programs are surely in jeopardy.

I think back a few years to the strategic reallocation. That was an effort to sequester ten percent of the budget and I believe most folks found the process difficult. We did not lose those funds, but rather shifted them into new areas that have allowed us to improve faculty salaries among other things. But the current nine percent cut is a not a reallocation; it is lost revenue. Our plans for continued faculty salary increases will be stymied under this plan.

In the short term university administrators will have to conduct a thorough review of the budget. And we should all do what we can to save money. President Benson has hit the brakes on planned increases to Athletics spending. After the General Assembly acts and there is a better understanding of our situation there will be opportunities for faculty input. I encourage the faculty to work closely with the administration to identify any areas of excess in the budget with the hope of preserving to the greatest extent our most important resource – a highly skilled faculty working for the benefit of our students. 

*This is a reference to Rose v Council for Better Education (790 S.W.2d 186, 60 Ed. Law Rep. 1289 (1989)) where the Kentucky Supreme Court ruled that K-12 education was a fundamental right under the constitution – a status not enjoyed by higher education.
** Speaker Greg Stumbo disputes the Governor's ability to make cuts in the current budget without the approval of the General Assembly:

KSN&C readers are reminded that while I currently serve as Chair of the EKU Faculty Senate, the comments made here are my own and do not reflect any actions taken by the Senate nor the opinions of any of its members. As always, all comments made on KSN&C are attributable only to the author.

This from WKYT:
The presidents of eight state funded Kentucky universities spoke to Governor Matt Bevin in a conference call Wednesday morning to discuss budget cuts to education.

On Tuesday Bevin released his budget plan for the next two years. It includes budget cuts for almost all state agencies, including money going to state universities.

"There are significant fiscal challenges that the governor and our state are facing and he spoke with great passion last night about the serious challenge that exists with pensions in our system with both teachers and workers," said Jay Blanton, spokesperson for the University of Kentucky.

The conference call focused on the proposed cuts and Bevin's plan to implement performance based funding for universities. That move would mean the funding provided to state universities from the general fund would be distributed based on performance criteria. The governor says that criteria will be developed in collaboration with university leadership.

"They didn't get into a lot of detail," Blanton said. "He was very open and cordial about the idea that he wants input and feedback and he wants the presidents to engage with him and his administration about what he wants a performance funding model to look like."
The cut in funding has led students and their families to wonder if that decrease in funding for universities could lead to an increase in the cost of tuition.

"I would say nothing is on or off the table right now," Blanton said. "We've got to assess everything, we're not looking to absorb cuts by disproportionately placing it on student and their families."
A sentiment students agree with.

"Bogging down students ability to pay for tuition, causing obstacles, it really gets in the way of, like, getting the general education purpose of coming to college to learn," said Marvin Anderson, a student from Radcliffe.

At UK those cuts mean a $12.6 million cut between now and June 30, with more to follow.

Below are letters from Eastern Kentucky University President Michael Benson and University of Kentucky President Eli Capilouto in response to the proposed budget cuts.

Undoubtedly you have all read or heard about Governor Bevin’s budget presentation made last evening to the General Assembly.  I was there with my fellow university presidents and all eight of us held a conference call this morning with the Governor and members of his staff. The bill on our State’s pension crisis has come due, and the Governor stressed repeatedly last evening that he will not borrow to get Kentucky out of this hole. In short, he intends to direct $1.1 billion to the pension system without raising taxes. 
What the Governor presented will certainly pose challenges to us, both in the short and long term.  Our acute and most pressing task is to carve 4.5% out of our current budget mid-year in this fiscal cycle.  Moving forward, we must carve out 9% out of our budget over the next 30 months.  This 9% is off our total baseline as currently appropriated; our annual state appropriation is approximately $68 million.  By 2020 ALL of our state appropriation will be subject to performance funding metrics, and these standards will be developed over the next several months and applied over the next two biennia.
While the Governor chose to exempt several state agencies from the $650 million in reductions, unfortunately higher education was not one of them.  Governor Bevin outlined a whole host of agencies and initiatives to fund and all of them are commendable (e.g., increased pay for police officers and other public safety personnel, reduction in caseloads for social workers, additional resources for prosecutors, and no cuts to Medicaid, etc.). We applaud him for protecting the most vulnerable in our population. 
Nevertheless, my fundamental reservation with this approach is that we are addressing the collateral symptoms and outcomes of systemic problems. Education, on the other hand, is an investment that treats root causes. In the triage of treatment for our Commonwealth’s ills, higher education is paramount, and I can promise you that our lobbying efforts in support of EKU will continue unabated and undeterred. But, as always, we cannot make this case alone – we need your help.
When one considers that public higher education will receive $231 million less in 2018 than we did in 2008 (a 35% reduction), our ranking as the 11th-worst in per-student cuts in America is a brutal reality.
The Governor expressed support of increased latitude for higher education institutions with tuition and fees to help address some of the budgetary shortfalls we will soon face.  Governor Bevin reiterated his own belief in our call today that access to education is a privilege, and not a right, and the cost to educate our citizens must fall to those who benefit from those who consume it – students.  He used his own experience as an Asian Studies major at Washington and Lee University as an example.  The challenge with increased tuition is that it, perforce, reduces the number of scholarship dollars we can provide to qualified students, thus choking off access to education.  This is one of my gravest concerns. 
While we might have fundamental differences on the societal benefits of liberal arts education for all those who might want it, just as Speaker Stumbo said last night, the budget and the state are Governor Bevin’s to manage and lead; he is the chief executive.  The Governor is willing to continue conversations with all of us, and our group of presidents is planning another conference call next week.
In the midst of the inevitable cuts we must make to our ongoing budget, there are projects funded through other sources that will soon launch.  These will move inexorably forward.  Among these are our Public-Private Partnerships for new residence halls and other campus infrastructure improvements.  The Governor did not include ANY state-funded capital projects in his budget, nor were agency bond projects listed. He did tell us this morning, however, that we can make the argument for our respective priorities, and he and his staff will consider them on a case-by-case basis.  Our agency bond request was $93 million and this remains our top priority.  Funding for state-supported capital projects includes appropriations for our Aviation Program and a new Model Lab School.
Our roots as an educational institution date back to 1874, and Eastern has faced dire funding and other crises in the past.  Rest assured that we will survive this recent challenge and emerge more united in our fundamental commitment to providing the very best educational experience to anyone who may want to access it.
Thank you for all you do for Eastern.  To paraphrase the poet Samuel Johnson, the spectre of the gallows has a unique way of focusing one’s mind.  This situation is a sort of financial gallows for us and will require our best and most focused thinking and effort both individually and collectively.
All of us together, in concert with our administrative and academic team and our Board of Regents, pledge to do whatever it takes to help EKU navigate successfully the challenging times ahead. We will also keep you updated as the legislative session unfolds.
Yours sincerely,
Michael T. Benson

    Dear Campus Community,

    Governor Matt Bevin last night presented his proposed budget for the remainder of this fiscal year, ending June 30, and for the next two years. It now goes to the state House and Senate for review.

    It was an important step in the process of developing a budget for the Commonwealth and for funding much of the instruction, teaching and service that we do at the University of Kentucky. It is essential that all of us understand the details of the Governor’s proposal and the next steps in the process.

    I assure you that we will not allow changes in state support to stall the momentum you have created for our students, our patients, and our state. Guided by our Strategic Plan and collective commitment, we will continue to move forward aggressively to achieve our goals: providing the best education for our students, conducting research and care that meets the needs of our state, and extending service that changes lives and transforms communities.

    There are two main elements to the proposed budget:

    First, the Governor announced plans to implement through an executive order a mid-year reduction in budgets for most areas of state government, including universities. Between now and June 30 of this year, our current state appropriation will be reduced by $12.6 million (4.5 percent). I have instructed Executive Vice President for Finance and Administration Eric N. Monday and Provost Tim Tracy to begin immediately working with their teams on how to address this reduction. As always, we will proceed thoughtfully and with wide consultation with campus stakeholders to protect our core teaching, research, and service missions.

    Second, in the first year of the new two-year budget cycle starting July 1, the Governor's budget proposes a cut of $25.2 million to our state appropriation. To put into context, this year we were scheduled to receive an appropriation from the state of $279.6 million. The budget, if enacted for next year, proposes lowering that appropriation to about $254.4 million - a 9 percent reduction. The following year, 2017-2018, our base will be reduced to $169.7 million and the remaining one-third ($84 million of the $254 million) would be placed in a pool of dollars that would be allocated across universities based on performance. As details of the method of allocation become clearer, we will keep you informed.

    Certainly, the magnitude of reductions in the Governor’s budget proposal presents significant challenges to our University. We will work through them in consultation with you.

    We have essential work to do and a powerful story to tell. In the last five years, we've improved graduation rates and expanded affordable access for Kentucky families to the best education in our state. We're conducting ground-breaking research that directly addresses the challenges we face. We've extended health and wellness care to more patients and people throughout our state than ever before.

    We will thoughtfully and respectfully tell our story in the coming months in the General Assembly. We will work in a spirit of cooperation with the Governor and legislators to make clear our needs. But we must acknowledge the fiscal realities of our state. And I applaud the Governor for working to protect other essential services, including social workers and law enforcement officers.

    We will not trim our aspirations. But we do have to find more creative ways to power our progress. That will take all of us.

    In the coming days, weeks and months, I will be communicating with you often, as there are developments. I pledge to you to be straightforward and transparent as we work together to continue our progress -- ensuring the promise of this place for those we serve.

Thank you.

Eli Capilouto
University of Kentucky

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