PUBLIC UNIVERSITIES AND COLLEGES WILL CONTRIBUTE $41 MILLION TO HELP BUDGET CRISIS INHERITED BY THE FLETCHER ADMINISTRATION
Frankfort, KY:Governor Ernie Fletcher and Dr. Tom Layzell, President of the Council on Postsecondary Education (CPE), announced today that the public universities and the Kentucky Community and Technical College System will contribute $41 million to the Governor's "stability initiative". Early this morning, Governor Fletcher accepted a proposal which Dr. Tom Layzell presented to State Budget Director Brad Cowgill.
"I appreciate the work of Dr. Tom Layzell on behalf of the Council for Postsecondary Education and the willingness of the presidents of our public institutions of higher education to work with us on addressing Kentucky's budget shortfall," said Governor Fletcher. "This agreement will ensure the protection of university funds received as contributions from private donors. This was an important exemption to ensure alumnae and contributors that their donations will be used on campus," continued Governor Fletcher. "At a time when public dollars are in short supply we want to encourage Kentuckians loyal to public institutions of higher education to increase their historical level of support. The important part of this process was that we were able to work together to reach an agreement on our postsecondary system's contribution to help address the budget shortfall inherited by our Administration."
Governor's Fletcher's stability initiative is intended to create a fund of $100 million for the purpose of lessening the impact of the budget shortfall predicted for the next fiscal year. Predictions of budgetary shortfalls for that next fiscal year are expected to range from $200 million - $700 million. Early in his administration, Governor Fletcher challenged the secretaries of his consolidated cabinets to find "efficiency savings" within their departments equal to 2.5% of their general fund and restricted fund accounts. Medicaid and SEEK (the state government's program for funding elementary and secondary education) were and remain exempt from the "stability initiative", as well as appropriations to satisfy the state's debts.
"We are using this as an opportunity to restructure our budget and to become less bureaucratic, more efficient and more focused on the core element of our mission. We are looking at what's essential to our mission and making those choices appropriately. This is being done to help ensure the burden isn't initially placed on students and parents through tuition increases," said Dr. James C. Votruba, President of Northern Kentucky University.
"These are difficult times for the Commonwealth and we want to work closely with the Administration to help resolve these challenges. We appreciate Governor Fletcher's commitment to higher education and his strong interest in driving this recovery through a knowledge based economy with the help of the universities," said Dr. Lee Todd, President of the University of Kentucky. "I believe that it's fundamentally important for Kentucky's future to have tax modernization as soon as possible, which would clearly help our economy grow and avoid these problems in the future."
The reduction of $4 million in the university's contribution to Governor Fletcher's "stability initiative" was made possible by an unexpected increase in recent lottery proceeds according to Brad Cowgill. Kentucky lottery proceeds have historically been used to support education and the Fletcher Administration has made education one of its highest priorities.
"The university presidents were grateful for the additional flexibility that Governor Fletcher offered at the meeting on Friday to take the "stability initiative" funds from either General Fund appropriations or their restricted funds," said Tom Layzell. "Governor Fletcher's flexibility has made it possible for the postsecondary system to make a higher level of contribution than they had thought possible and has avoided the use of funds contributed by private donors and other grant funds," continue Layzell. "We are naturally pleased that Governor Fletcher has been willing to accept a reduction of $4 million."
At the meeting on Friday Governor Fletcher offered to permit postsecondary institutions to make all or any of their contributions to the "stability initiative" from their General Fund appropriations. Additionally, Governor Fletcher assured university presidents that the use of General Fund dollars to satisfy the $41 million reduction would not result in a reduction of the institution's baseline for the next fiscal year. The presidents also expressed their commitment to Governor Fletcher that their management teams will help achieve the Fletcher Administration's goal of finding increased efficiencies and productivity throughout state government.
"It has taken some additional time for all of this to be worked out but we have ultimately reached an agreement that all parties regard as fair and equitable," said Brad Cowgill, Budget Director for Governor Fletcher. "We are naturally disappointed that these funding reductions were necessary, but our Administration has inherited a budget crisis and it's our duty to address this crisis without taxing our way out of it."
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