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Op-Ed: State Budget Has Positives for NKU, but Pension Could Consume Bulk of Funding

Written by Gerry St. Amand, interim president of Northern Kentucky University

As we enter the final weeks of the Kentucky legislative session, the stakes have never been higher for Northern Kentucky University. Recently, we saw the Senate deliver their version of a two-year budget for the Commonwealth, and I’m pleased to report it includes some positive news for NKU.

The past two years have been the most significant for higher education in nearly a generation because of the previous cooperative efforts of the Governor and General Assembly to begin to fix the funding disparity negatively impacting NKU compared to our peers, and to build a performance funding model that strategically aligns state resources with the outcomes our institutions deliver.

In the 2016 legislative session, NKU and Western Kentucky University were provided half of their recognized disparity funding. Although this was an acknowledgement of the problem and a significant step forward, half of the inequity still remained. You may be asking, what does this funding disparity mean for NKU? At its core, it means our students and their families shoulder a larger financial burden for their education at NKU compared to their statewide peers for no reason other than it is “the way it’s always been.”

In the Senate budget, this unjust treatment ends. The Senate finishes what was started in 2016 by appropriating the other half of the funding necessary to put NKU on a level playing field with our peers.

Further, the Senate budget injects $23 million into higher education’s performance funding model. The model encompasses metrics that align with the state’s goals for postsecondary educational attainment. For the first time in history, we are being funded not by political maneuvering, but based on the number of students we graduate, our ability to retain and progress students towards graduation, the delivery of degrees in high-growth fields and a number of other critical metrics tied to the Commonwealth’s goals. This new funding in the Senate budget demonstrates a commitment to the best-practice funding model developed last biennium.

In addition, the Senate restores funding in the budget for the Kentucky Center for Mathematics (KCM), a statewide program housed at NKU. The KCM has a presence in nearly all of Kentucky’s 120 counties and ensures every child has the ability to access a high-quality math education.

Although the Senate budget includes a 6.25 percent cut in our state appropriation, as is the case for other universities and state agencies, the equity funding and anticipated performance-based funding will strengthen our ability to manage that cut.

As positive as this budget is for NKU, however, we continue to confront the greatest financial challenge in our history: the pension crisis and its dramatic increase in NKU’s mandated contribution to the Kentucky Employee Retirement System (KERS). Without meaningful pension relief and reform, this promising budget will be consumed entirely by our mandated contribution increase to KERS. Ten years ago, our state-mandated contribution to KERS on behalf of our employees was $2.6 million. Next year, without relief and reform, our state-mandated contribution to KERS will be $31 million, an amount that will consume 60 percent of our state appropriation. You read that correctly – 60 percent of the amount the state sends us to invest in students, faculty, staff, and facilities will go only to cover our pension contribution for one-half of our workforce.

Moving forward, I urge you to join with NKU and ask our legislators to pass the Senate version of the budget and provide pension relief and meaningful pension reform that puts our institution on a sustainable path for a better future.

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