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Gateway, NKU Respond to Bevin's Higher Education Cuts

Kentucky Governor Matt Bevin ordered a reduction to higher education budgets by 4.5 percent on Thursday, a move that preempted action by the legislature.

The General Assembly has been divided on Bevin's proposed cut with the Republican-controlled Senate supporting it in a budget bill that passed, and the Democratic House restoring the funding. The Republican governor cited state law on Thursday that allowed him to make the cut unilaterally. 

“Our pension system is on the brink of insolvency. We have more than $35 billion in pension obligations," Bevin said in a statement issued Friday. “It takes leadership from all stewards of taxpayer dollars to keep our commitments to our teachers and state workers. I appreciate our university presidents who recognize the magnitude of this challenge and are willing to participate and contribute to the solution. 

“Once we get our fiscal house in order, Kentucky will be in a much stronger position to make additional investments in higher education.”

Later on Friday afternoon, Attorney General Andy Beshear issued a statement calling Bevin's cuts illegal. "The governor’s unilateral action in cutting the appropriated funding of colleges, universities and community colleges was outside of his authority," Beshear said. "The law on budget reductions is straightforward. It requires a declared shortfall that does not exist. If it did, the last budget bill that was passed and signed into law dictates the steps that must be taken. We are therefore requesting the governor withdraw his order. We are confident he will comply."

Otherwise, the move forces the state's public colleges to adjust immediately. Leadership at Northern Kentucky University and Gateway Community & Technical College (which is part of the Kentucky Community & Technical College System) responded Friday.

"While I am disappointed with this action, I recognize that Governor Bevin intends to use these funds to reduce the substantial unfunded liabilities in the state pension system, a system that has been increasing our employer contribution rate dramatically. Those increases have had a significant, adverse impact on our university budget," said NKU President Geoffrey Mearns in an email. NKU will be impaced by nearly $2.2 million, he said.

"Although this one-time cost is significant, our University is able to manage this funding reduction through our available reserves. Because of our financial prudence, we are not presently contemplating disruptive and drastic actions such as furloughs to manage this unanticipated cost. But this reduction will make it even more difficult for us to develop a balanced budget in the next two years," Mearns said on a day in which the General Assembly is still working towards a consensus on a state budget to sent to Bevin for signature. "More importantly, the House and Senate have not yet come to an agreement on the state budget for that period. The next deadline in the budget process is April 12. I will continue to advocate for our funding needs, and I will continue to keep you informed as the House and Senate work to reach an agreement on the budget."

Gateway and KCTCS will need to tape into emergency funds said Jay Box, president of the community college system.

“The KCTCS Board of Regents has anticipated and planned for a potential 4.5 percent state appropriation cut since the Governor announced his budget proposals in January,” Box said in a statement. “With three-fourths of the current budget year completed, it would be impossible for the colleges and other KCTCS operating units to balance their budgets without having access to emergency funds.”

At its March meeting, the Board authorized moving nearly $8.6 million from the budget emergency fund into the operating budgets of the colleges, system wide operations and support programs to address the potential cut in the 2015-16 budget, a news release said. The budget reserve was established by the Board several years ago to maintain KCTCS operations on a one-time, non-recurring basis in the event of an emergency.

“We have been prudent over the years with our budget by setting aside funds for extreme emergencies, such as natural disasters,” KCTCS Board of Regents Chair Marcia Roth said. “Unfortunately, the timing of this cut during the fourth quarter of our budget year left us with no other option than to use these funds. Our priority is always to put our students and hardworking faculty and staff first. The use of these funds are a short-term, one-time measure for this serious situation.”

Further, Bevin has proposed a full 9 percent cut to higher education across the 2016-2018 budget biennium.

“KCTCS is helping us bear this burden for now, but we still have much work to do if the governor’s budget passes,” said Dr. Vic Adams, Gateway Interim President/CEO. “The leadership team and I are looking at ways we can efficiently and effectively provide quality education to our students in these difficult financial times.”

-Staff report

Photo: NKU campus (RCN file)