The biennial budget passed last night by the Kentucky General Assembly still presents challenges for WKU, President Timothy Caboni said in an email to faculty and staff. 

These challenges include a 6.25 percent cut for higher education, reduction in funding for Gatton Academy and no direct relief for WKU’s contribution payments to the Kentucky Employees Retirement System.

Gov. Matt Bevin proposed cuts to higher education during his State of the Commonwealth and Budget Address earlier this year. 

The cut would amount to a loss of $4.6 million for WKU. However, Caboni said a portion of this would be returned to the performance funding pool for WKU to gain back. According to the Herald-Leader, the budget provides $31 million back to the universities through performance based funding. 

Performance based funding is a new model for higher education funding based around different metrics of performance and other criteria. This model was adopted by the legislature last year. Former President Gary Ransdell was appointed by Bevin as the chair of the workgroup charged with defining the funding model.

Under performance based funding, universities would receive state funding based on these metrics:

• Thirty-five percent of allocable resources are distributed to universities based on the number of degrees awarded.
• Another 35 percent will be awarded based on the total number of students’ earned credit hours.
• The remaining 30 percent will be distributed amongst universities based on campus facilities, campus administrative functions and academic support services, such as libraries.

Caboni said WKU would likely gain most of that back in the performance model, bringing WKU’s state appropriation reduction to less than 1 percent. During the 2017-18 fiscal year, WKU received $74.6 million in state appropriations. 

In the budget, there is also a 2 percent reduction in funding to support the Gatton Academy, which is $75,000 over two years. However, the Kentucky Mesonet is fully funded in the budget, which was originally zeroed out in Bevin’s plan. 

No direct relief is included for WKU’s employer contribution payments to the KERS and Caboni anticipates those costs to significantly increase. Additionally, he said WKU is continuing to study the pension reform bill, SB 151, and other measures which relates to KERS and the Kentucky Teachers’ Retirement System. 

A provision to include asset preservation matching funds to help campuses address a backlog of maintenance on university buildings and infrastructure was also not included. 

Bevin’s original budget included a $300 million “asset preservation bond pool” in order to “preserve and upgrade facilities owned by the Commonwealth,” according to the Herald-Leader. Universities would have access to these funds. 

The budget also includes language which would allow universities to eliminate tenured faculty positions when an academic program is discontinued. 

Caboni said current guidelines set by the American Association of University Presidents provides a “fair, reasonable and effective pathway to manage downsizing or elimination of academic programs.”

“I am strongly committed to following those guidelines and to protecting the integrity of tenure and academic freedom as we work together to address the current financial challenges facing WKU,” he said.

According to AAUP guidelines, termination of tenured faculty may occur under extraordinary circumstances because of a “bona fide financial exigency,” which is a severe financial crisis that compromises the academic integrity of a university.

There are additional guidelines for termination of tenured faculty as a result of discontinuing an academic program, such as the university making “every effort to place the faculty member concerned in another suitable position.” 

According to the budget bill, reductions would have to be done with “compelling evidence” that program changes are in the university’s best interest due to “low utilization, financial feasibility, budgetary constraints, or declaration of financial exigency.” 

If a faculty reduction were to occur, the university’s Board of Regents/Trustees would provide 10 days notice in writing to the faculty member or members who is removed, as stipulated in the bill. 

This comes as WKU has already eliminated 119 full-time positions and one part-time position across the university in an attempt to address a $15 million deficit. Those eliminations were recommended by the Budget Council to reduce the university’s workforce. 

Earlier this year, Caboni said WKU could have a budget deficit as large as $40 million. The $40 million comes from our $15 million deficit, the state cut of $4.6 million, WKU’s nearly $9 million pension obligation and an anticipated $10 million deficit from enrollment changes and fixed costs.

As the state budget heads to Bevin’s office, he will have 10 days to veto all or parts of the budget bill and the General Assembly will reconvene April 13 and 14 for final actions on bills and action on vetoed items. 

“While the national trend has begun to shift back to state governments increasing support for higher education, sadly Kentucky is not yet there, Caboni said. “That is all the more reason to redouble our efforts to make significant gains on enrollment, retention and graduation numbers. We are seeing positive trends in that regard, and I am grateful for your work and continued commitment to our students and our University.”

{{tncms-inline content=”<p class="x_MsoNormal">Dear Fellow Faculty and Staff:</p> <p class="x_MsoNormal"> </p> <p class="x_MsoNormal">Last night the Kentucky General Assembly passed the biennial budget that will fund the state’s operations for the next two years.  We’ve been closely engaged in this process throughout the legislative session, and while there are some improvements in the final version from where we started, this budget presents us with significant challenges. </p> <p class="x_MsoNormal"> </p> <p class="x_MsoNormal">First, state appropriations for universities are reduced by 6.25% as was originally proposed by the Governor.  However, a portion of that is returned to the performance funding pool, which was adopted by the legislature last year following months of work by the university presidents to come to agreement on an outcomes-based funding model.  So while we will lose $4,619,000 in the budget reduction, we will likely gain most of that back in the performance model, bringing our state appropriation reduction to a little less than 1%. </p> <p class="x_MsoNormal"> </p> <p class="x_MsoNormal">Additionally, legislators applied an approximate 2% reduction in funding to support the Gatton Academy, so we will have $75,000 less to support operations of the Academy in the next two years.  The Kentucky Mesonet, a statewide weather monitoring network operated by WKU, was fully funded at $750,000 per year.  That was zeroed out in the Governor’s original plan.</p> <p class="x_MsoNormal"> </p> <p class="x_MsoNormal">Legislators did not include direct relief for our employer contribution payments to KERS, the primary driver of fixed increases to our operating budget, so we anticipate those costs to increase significantly.  Legislators also did not include the asset preservation matching funds proposed by the Governor to help campuses address a backlog of maintenance on university buildings and infrastructure. </p> <p class="x_MsoNormal"> </p> <p class="x_MsoNormal">Finally, the adopted budget includes language that would allow universities to eliminate tenured faculty positions associated with the closure of academic programs.  It is my view, and I have shared this during my conversations in Frankfort, that current guidelines set forth by the American Association of University Professors provide a fair, reasonable and effective pathway to manage downsizing or elimination of academic programs.  I am strongly committed to following those guidelines and to protecting the integrity of tenure and academic freedom as we work together to address the current financial challenges facing WKU.</p> <p class="x_MsoNormal">                                                            </p> <p class="x_MsoNormal">We are continuing to study the pension reform bill that was passed and other measures that relate to KTRS and KERS employers contained in other bills.  As we know more, I will communicate further on those matters. Information on other legislative actions can be found at <a href="https://www.wku.edu/govrelations/index.php" target="_blank">https://www.wku.edu/govrelations/index.php</a>.</p> <p class="x_MsoNormal"> </p> <p class="x_MsoNormal">This has been a long and arduous process, which began in January with the Governor’s budget proposal, and it isn’t yet final.  Governor Bevin now has ten days to veto all or parts of the budget bill, and the General Assembly is scheduled to reconvene April 13 and 14 for final actions on legislation that is not yet finished and for action on any vetoed items.  During the session, we presented at hearings in the House and met with legislative leadership and members in both the House and Senate to ask for stable, predictable and adequate funding for WKU.  While the national trend has begun to shift back to state governments increasing support for higher education, sadly Kentucky is not yet there.  That is all the more reason to redouble our efforts to make significant gains on enrollment, retention and graduation numbers.   We are seeing positive trends in that regard, and I am grateful for your work and continued commitment to our students and our University. </p> <p class="x_MsoNormal"> </p> <p class="x_MsoNormal">Best,</p> <p class="x_MsoNormal"> </p> <p class="x_MsoNormal"><img id="x_Picture_x0020_2" src="https://email.wku.edu/owa/service.svc/s/GetFileAttachment?id=AAMkADZlZmY3ZmIxLTM5ZWQtNDNjYy05ODg5LTZiNjg0M2JhZGU0YgBGAAAAAACqqUep5d8DS79ips38YCqeBwDAYVO7WM10RobvdUijakbnAAAALbY%2FAABa4QKG59aETIS2tH7fJ0SJAADb7vbxAAABEgAQALOxBgjNGLhHsfFcmd9vgdk%3D&X-OWA-CANARY=p1I1EfKw506EJvQSKQn3HWAGRTKomdUI0sN4uUcnh_Jtep8Bnqj31XbaYW_s_BOowPVG2CsB4bg." alt="" width="87" height="46" border="0" data-custom="AAMkADZlZmY3ZmIxLTM5ZWQtNDNjYy05ODg5LTZiNjg0M2JhZGU0YgBGAAAAAACqqUep5d8DS79ips38YCqeBwDAYVO7WM10RobvdUijakbnAAAALbY%2FAABa4QKG59aETIS2tH7fJ0SJAADb7vbxAAABEgAQALOxBgjNGLhHsfFcmd9vgdk%3D" /></p> <p class="x_MsoNormal">Timothy C. Caboni</p>” id=”7e003310-4e67-4319-9937-eb29251183da” style-type=”info” title=”More Information” type=”relcontent”}}