CPE’s budget seeks funding increases to accelerate degree production, provide for pension costs

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The Council on Postsecondary Education approved its 2018-20 biennial budget recommendation for the state’s colleges and universities. The request includes increases in performance funding and for special initiatives, and a fifth round of Bucks for Brains funding.

For institutional operating funds, key priorities are to jump-start the new performance funding system to accelerate degree production, graduation rates and improve the workforce, while a special initiatives request seeks reimbursement of projected increases in employer-paid pension costs.

The performance funding request calls for an overall 2 percent increase in operating funds, or $18.9 million, in the first year (2018-19), and $36.5 million, or 4.1 percent, in the second year (2019-20) for campus operations. These funds will support faculty and staff salaries, student financial aid, student support, utilities and building maintenance costs at the state’s public institutions.

“We fully understand the state’s fiscal constraints. At the same time, we were asked to let policy makers know what we thought the universities and KCTCS needed to continue to effectively serve our students. We believe that these strategic investments will grow and improve the quality of our workforce, which, in turn, will grow the state’s economy,” said Council President Bob King.

The recommendation also seeks $47.2 million each year of the biennium to offset campuses’ mandated increases of about 70 percent for KERS employer-paid contributions.

Absent this funding, the impact would result in a 9.7 percent budget cut, on average, for institutions with employees participating in KERS. It would also impact campuses differently because the number of employees participating in the retirement system varies at the campuses.

Another component of the special initiatives request is for the Kentucky Community and Technical College System to address labor shortages in critical industry sectors. This competitive workforce initiative request is $3.6 million in the first year and $5.9 million in the second year.

If funding is authorized, KCTCS will grow programming and student enrollment in four high-demand industry sectors: advanced manufacturing, construction/trades, health care, and transportation and logistics.

A third special initiative request is the Kentucky State University land grant match of $290,000 in each year of the biennium to meet the federal match requirement.

The operating fund base for public colleges and universities is currently $886.9 million.

In addition to operating funds, the Council’s budget request includes $8.2 million for annual debt service in 2019-20, recurring in subsequent years, for $90 million in state bonds to support a fifth round of funding for the Bucks for Brains program.

The program would double the state investment in postsecondary education research by requiring a dollar-for-dollar match of state funds with institutional funds from external sources.

Between 1998 and 2010, the General Assembly authorized four rounds of funding for the program, totaling $410 million. The campuses have used these funds to leverage an additional $410 million in private contributions.

Finally, the Council’s budget recommendation includes a capital investment request for the most pressing campus asset preservation and renovation needs of state-owned facilities. Unlike past years, the capital request is entirely focused on deferred maintenance and renovation projects to align building capabilities to student learning needs.

The request includes an appropriation of $50.9 million in 2019-20, recurring in subsequent years, to pay annual debt service on a $600 million bond issue for asset preservation projects. The 2013 VFA study identified $6.1 billion in asset preservation needs for the postsecondary system.
In other business, the Council:

• Heard strategic agenda annual reports for Murray State University, Western Kentucky University and the Kentucky Community and Technical College System.

• Heard an audit report from the Executive Committee that showed no findings.

• Heard reports from the CPE President, Commissioner of Education and Committee on Equal Opportunities, and reports on the CPE work plan, dual credit and GEAR UP Kentucky.

The Council also welcomed new member Kristi Nelson of Union. She was administered the oath of office by Judge Kelly Mark Easton, chief administrative circuit judge of the Green River Region for Hardin Circuit Court, Division III.

Nelson serves as general counsel and chief administrative officer for Pomeroy. She recently served two consecutive terms on the Kentucky Higher Education Assistance Authority board.

The Council postponed action on the campus diversity, equity and inclusion plans agenda item to more closely examine campus targets set in the various required metrics.

In other business, Chair Sherrill Zimmerman appointed three Council members to the nominating committee, which will present nominations for Council chair and vice chair at the Feb. 2 meeting. Appointees include: Donna Moore, chair, and members Lucas Mentzer and Joe Ellis.

Zimmerman appointed five Council members to the 2018-19 Tuition Development Work Group, which is tasked with reviewing the tuition-setting process, developing a tuition-setting timeline, and making recommendations for tuition and mandatory fee ceilings. Appointed were Carol Wright, chair, members Ben Brandstetter, Kim Halbauer, Bob Staat, Sebastian Torres, and Zimmerman will serve as an ex-officio member.

Zimmerman appointed Ben Brandstetter, Ron Beal, Vidya Ravichandran and Bob Staat to plan the Council retreat and Zimmerman will serve as an ex-officio member.

Before adjourning, Zimmerman presented resolutions to GEARUP Kentucky for outstanding accomplishments and service, and Council staff Rebecca Bowman, Gayle Box and Jerry Warmouth in honor of their retirements.

For more information, and meeting materials, visit cpe.ky.gov.

From Council on Postsecondary Education

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