State universities brace for possible budget cut

Mai Hoang

After working to alleviate an $18.5 million state budget cut in higher education last year, state schools are allocating funds in anticipation of another cut this year.

The Council on Postsecondary Education has advised state universities to set aside 2 to 3 percent of their budgets to offset a possible budget cut in the 2002-2003 fiscal year.

“I believe that if there’s a revenue shortfall, the executive branch will have to ask agencies to cut back on spending,” said Sherron Jackson, acting vice president of finance for CPE.

Beth Jurek, a state deputy budget director, said the estimated shortfall could be between $150 and $200 million.

Final numbers will not be available until after the Consensus Forecasting Group, a group of analysts and economists, meet to discuss the state’s revenue outlook, she said.

Ann Mead, Western’s chief financial officer, said the university has set aside 3 percent of its budget, just over $2 million, this year to offset a possible cut. The university will again use money brought in by new students.

“The tuition revenue to be covered this fiscal year would likely be in excess of our budgeted amount and would be sufficient to cover a 3 percent shortfall,” Mead said.

With no definite figures on a budget cut, state universities have varied on the amount they have chosen to reserve. While Western has set aside 3 percent, other universities have reserved as much as 5 percent or as little as 2 percent.

Jackson said each university can use its own discretion when determining how it will set aside funding.

Ken Johnston, vice president for financial affairs and treasurer at Eastern Kentucky, said the school decided to set aside 5 percent of its budget, or $3.4 million.

Three percent of that money will come from a contingency fund that consists of money allocated by the state, tuition funds and a new initiatives fund. The remaining 2 percent will be generated from cuts across the board in the university’s operating budget, Johnston said.

No academic programs were cut at Eastern to accommodate the cuts, Johnston said. Many of Eastern’s academic and administrative departments chose to eliminate or reduce vacant positions.

“It’s hard to absorb reductions such as this without impacting your personnel in some form or fashion,” he said.

Angela Schaffer, associate budget director for Northern Kentucky University, said administrators there have decided to withhold 2 percent of its state-allocated funding in case of a cut.

“It’s less disruptive to the instructive process this way,” she said. “.The state revenues are just uncertain at this time, so we’re being conservative.”

Louisville plans on setting aside 3 percent of its budget – $4.5 million of its budget. Money to fund the cut will come from three different sources, said Susan Ingram, assistant director of budget for U of L.

The university plans to cut programs funded by state allocations, including the Kentucky Data Center, Metropolitan College – a joint venue between the university and United Parcel Service– and programs at the university’s medical school.

The university will also use new tuition money while trimming department budgets across the board.

President Gary Ransdell said it would not be wise for Western to cut any of its budgets.

“My objective is to avoid having to cut directly into our budgets at a time when we are trying to stretch our existing budgets to address our enrollment growth,” he said.

Reach Mai Hoang at [email protected]