Solution to budget shortfall shores up for another year

J. David Porter and John W. Ridley greet each other before the Board of Regents meeting on March 24, 2017. 

Jamie Williams

The Board of Regents discussed a solution to the 2017 tuition revenue shortfall, Kentucky’s new performance-based funding for public universities and consolidation of several Ogden College departments during its meeting Friday.

The Board presented a budget reallocation plan in response to a projected tuition shortfall for the 2017 fiscal year. This shortfall is estimated to amount to $6.5 million and is likely due to declining enrollment of international and non-traditional students.

“If we would have had a $6.5 million shortfall to balance the budget — if that would have happened 10 or 15 or especially 20 years ago…we would not have had solutions,” President Gary Ransdell said.

To address the projected shortfall ($6.5 million):

  • Approximately $1.7 million will be reallocated from one-time reserves of Division of Extended Learning and Outreach (DELO) and Health Services.
  • Another $767k will be allocated from various projected surpluses in scholarships, fellowships and other sources.
  • The bulk of the reallocation — approximately $4 million — will come from carry forward funds.

Two-thirds of $4 million was made up of carry forward funds departments had already been reserving in anticipation of the projected shortfall. 

“That helped tremendously to be able to bring this forward for a balanced $6.5,” said Ann Mead, vice president for Finance and Administration, who presented the reallocation plan to the Board.

Using the carry forward funds may reduce one-time purchases such as equipment, maintanence and computer purchases.

According to information provided by Mead, over 60 percent of the $4 million total came from Academic Affairs. The total also drew from carry forward amounts from Athletics, Student Affairs, Finance and Administration, Information Technology, Development and Alumni Relations, Public Affairs and General Counsel.

“There may be some unfairness in how this year’s budget is being settled, but next year it will be completely equitable in how the carry forward is used to balance next year’s budget,” Ransdell said.

During the meeting, Ransdell also presented Kentucky’s new performance-based method for funding public universities. Ransdell was the chair of the Postsecondary Education Working Group which submitted the proposal to state government.

In the new plan, 35 percent of allocable resources will be distributed to universities based on student success outcomes or the number of degrees awarded. Another 35 percent will be awarded based on total number of students’ earned credit hours.

The remaining 30 percent will be distributed among universities based on campus facilities, campus administrative functions and academic support services such as libraries or computers.

The plan will include an adjustment for smaller institutions to minimize impact on smaller campuses.

Ransdell said since the plan has a set formula, it will eliminate the need for universities to advocate for funding. If the higher education budget receives more funding, it will continue to be distributed to schools using the same formula.

“For 20 years they’ve been dragging me to Frankfort to fight for this and fight for that come every budget session,” Ransdell said. “This takes the politics out of the appropriation of higher education funding. No president needs to go and fight for funding within the higher ed budget.”

The Board also approved the consolidation of three departments of the Ogden College of Science and Engineering. The Engineering, Architectural and Manufacturing Sciences and Computer Science departments will be consolidated into the School of Engineering and Applied Sciences.

“We’re very excited about this,” Cheryl Stevens, dean of the Ogden College, said. “This is such a great opportunity for Ogden College and for the disciplines of engineering, architecture and manufacturing and computer science.”

Students in these majors comprise almost half of those in the Ogden College. The consolidation will allow the departments to share resources to better serve students and allow them to work together on projects.

The Board of Regents’ next quarterly meeting will be on April 28.

Reporter Jamie Williams can be reached at 270-745-6011 and [email protected]