When it comes to budget reductions, the Kentucky Senate says it's not giving higher education more than it can handle. University leaders aren't so sure.
Wednesday, the upper chamber revived cuts for postsecondary institutions in the state, reductions University of Kentucky President Eli Capilouto has famously labeled "draconian." But differences abound over what the funding changes will mean.
If enacted in their current form, the reductions would subtract about $25 million from UK's state appropriation in both 2017 and 18. Republican leaders argue that, couched within the big picture, the numbers don't seem so extreme. Senate President Robert Stivers stresses that state funds only account for roughly a fifth of the university's overall budget, so the annual cuts lawmakers are contemplating represent closer to two percent of the school's total revenue.
His analogy: "That's the equivalent of having a dollar in your pocket and losing two pennies."
But in a presentation entitled "Fact vs. Fiction" on the UK website, officials point out that $2.7 billion of the school's budget is restricted - meaning expenditures are locked into specific areas, like UK Healthcare. The state cuts, they say, eat into the remaining $750 million meant for basic operations. Describing the expected impact, Capilouto offered a stark prediction before the House budget committee in February.
"Make no mistake about it. Every student, every employee, faculty, staff, everybody will feel it," he said.
Still Stivers says, when UK's entire $3.4 billion operation is taken into account, the recommended state cuts work out to an even smaller fraction of their entire budget.
"I think it is a cut they have to deal with, but I can tell you... programmatically it is going to force them to look at areas that are not productive," the Manchester Republican added.
The reductions could take effect as the state phases in performance metrics tethering a portion of UK's funding to outcomes. While Gov. Bevin wants all state dollars for public university and college dollars to eventually hinge on performance, a Senate plan released this week starts with a competitive system affecting just 25 percent. Advocates consider outcomes-based funding a tool to nudge schools toward more investment in lucrative areas of study, encouraging students to choose careers in in-demand fields.
But UK officials point to the National Conference of State Legislatures, which they say is not aware of any states that have attempted to simultaneously cut appropriations while implementing performance-based funding.
