2009-2010 UK Job Cuts Possible; Bracing For Worst

LEXINGTON, KY -- The University of Kentucky faces a potential budget deficit next year of more than $10 million, raising the prospect of job cuts and the possibility that some planned academic projects could be stalled indefinitely, reports The Lexington Herald-Leader in its Saturday edition.

Draft estimates of cost increases and expected state funding cuts point to painful moves on the horizon, Angie Martin, UK's vice president of planning, budgeting and policy analysis, told the Herald-Leader on Friday.

UK, like the other publicly funded Kentucky universities, had to absorb a 2 percent budget cut last month, which UK officials say they expect state officials to extend into the next fiscal year, which begins in July.

Last week, UK President Lee T. Todd Jr. sent an e-mail telling students, staff and faculty that the administration, not academic programs, would take the full $6.3 million hit to this year's budget. The cuts wouldn't cost any jobs through June 30, university officials said.

"The promise not to cut positions is for 2008-09," Martin said Friday. "We cannot make that statement for 2009-10. We don't know yet. I don't have a balanced budget yet."

What Martin has in front of her is a list of expenses for the 2009-10 year that far outweighs the amount of tuition revenue, university investment income and anticipated state money that UK relies on to fund its $650 million annual academic budget.

That portion of the budget doesn't count UK Medical Center or the Athletics Department, whose finances are separate.

UK, like the rest of Kentucky public colleges, has become more dependent on tuition income from students as state funding has essentially flat-lined during the last decade.

UK approved a 5 percent tuition increase last month — the highest allowed for next year by the state's Council on Postsecondary Education. That raise is expected to inject an additional $14.5 million into UK's academic operations, Martin said.

But it won't be nearly enough to cover rising health care and utility costs while counteracting further state funding cuts and plummeting investment income, thanks to the stock market's tumultuous last 18 months.

UK was slated to receive nearly $316.9 million from the state this academic year. After the 2 percent mid-year cuts, it will receive $310.5 million.

To help cover the difference, Todd's office is emptying the $2.2 million in UK's savings account and spending the $2 million in start-up funds UK had been saving to cover operational costs for a planned data center at Coldstream Research Campus, Martin said.

That project is now on hold indefinitely, she told The Lexington Herald Leader.

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