On January 8, Governor Bill Graves submitted his budget recommendations to the 2001 Legislature. I want to share with you some details of his budget as they relate to the University of Kansas. There is both good news and bad news in the recommendations, but I have some hope that the Governor and the legislature will be open to alternative proposals.
As the budget progresses through the legislative process, we plan to make strenuous efforts to secure support for those parts of the Governor's budget recommendations which are positive, and at the same time, seek to enhance those components of the budget which were not adequately addressed by the Governor's recommendations. I have met with the Governor, and I believe there are still technical adjustments to the budget recommendations, which might alleviate some of the negative effects of the recommendations. I believe the Governor would like to make adjustments if he can.
Salaries and Wages
As you know the Regents request focused on improving faculty compensation. In addition, the Regents made a special plea on behalf of non-faculty unclassified employees to provide the same salary increase as faculty. Within the budget of the University of Kansas, the Governor provided a 1.5% increase effective July 2001, for both faculty and other unclassified followed by a January 1st additional 1.5% increase. By the close of FY 2002, this will mean a 3% annualized raise for unclassified staff. For faculty only, the Governor recommended $8.4 million across the Regents system, representing the second year of commitment under SB345 to boost faculty salaries. At KU, faculty compensation will increase by an additional 3%, totaling an average increase of 6% by the close of FY 2002. On balance, I believe the Governor's proposal for faculty is positive, but I was disappointed that no special consideration was given to non-faculty unclassified employees.
The recommendation for classified employees has been well reported by the media. Steps 1 through 3 on the classified pay matrix will be abolished, effective February 4. All employees on Steps 1 through 3 move to Step 4. Additionally, the time in grade for Steps 4 and 5 is reduced from one year to six months. For FY 2002, the Governor provides the same 1.5% adjustment in July and again on January 1st for classified staff. The cost-of-living adjustment raises the entire pay matrix by these same percentages. While we applaud the efforts to increase the entry rate and to elevate the pay matrix, we are disappointed that no step increases would be granted during FY 2002. The recommendation of the Governor continues funding for longevity bonuses.
Other Operating Expenditures
The Governor's recommendation for FY 2002 provides a 1% increase in other operating expenditures. Additionally, he continues to endorse the concept of tuition equity, which enables the University to retain 25% of the additional tuition income resulting from rate increases. For FY 2002, tuition equity would provide $554,096 to the University of Kansas for other operating expenses.
Operating Support for New Buildings
The University requested $321,807 to finance utilities and operating costs for operation of Joseph R. Pearson Hall. The Governor provides no funding for this request.
Other Issues
The Governor endorsed the concept of block grants for Regents universities. While this endorsement has little impact on the FY 2002 recommendation, it is very positive for FY 2003 and beyond. When fully in place, this new budgeting approach will provide the University with greater flexibility and will eliminate the practice of using tuition revenue to offset the State's funding obligation. The Governor's support is a major step forward.
The University had sought $1,000,184 for costs resulting from natural gas price increases. This request was made for both the current year and for FY 2002. The Governor's budget recommendation does not provide for this item.
The University requested matching funds of $1,268,168 to continue the 2-for-1 State match of the $1 student fee for instructional equipment. The original program, approved by Governor Graves in FY 1999, was to be for a three-year period, after which the program would be reexamined for possible continuation. For FY 2002, the Governor does not provide any matching of the student fee.
Finally, in what was a total surprise, the Governor's recommended budget for the Lawrence campus requires a base reduction from the current level of funding in the amount of $1,551,129. Forcing this level of adjustment to the current base budget, coupled with the loss of the State match for instructional equipment, largely offsets the recommended budget increases. In effect, we are asked to fund most of the recommended increases out of cuts to our current funding.
It would be fair to characterize this budget proposal as positive in some ways, but as a major disappointment in other ways. The salary increase for faculty and even the proposal for classified employees have positive elements to them; the continued endorsement of tuition equity is very positive, as is the support for block grants. However, these positive elements are largely offset by the failure to provide funding for enhancing salaries of unclassified staff, step increases for classified staff, natural gas cost increases, the mandated base budget reduction and the decision to no longer match the student fee for instructional equipment.
I will be sharing our progress with you. If you have questions, feel free to respond to this e-mail. If I don't know the answer to your question, I will be glad to find someone who does.
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