Dear Colleagues:
In December, I offered a preview of the state budget situation, focusing on the much-publicized $426 million gap between state revenues and state expenditures. That translated into a 3.94% budget cut ($9.57 million) for KU (including the Medical Center), before adding on the mandated (but unfunded) cost of annualizing salary increases, health insurance and other benefits (another 2.41%, or $5.86 million). The total potential funding reduction for KU next year is $15.44 million, or 6.34% of our budget. I noted that I had asked Provost Shulenburger and EVC Hagen to prepare contingency plans for both a reduction in current-year funding and a cut in funding for FY2003. We continue to invite your feedback on that process.
It's the Budget . .
The Governor's statutory budget proposal contained the largest cuts ever recommended for higher education in Kansas. Such cuts would undermine the state's long-standing commitment to postsecondary education, and could potentially set Kansas higher education back for years to come. (Last Friday, the latest state revenue estimates were released, suggesting that the $426 million budget gap may now be approaching $500 million.)
Earlier this month, the Legislature convened and Governor Graves delivered his State of the State Address - in which he proposed some restorations in funding for higher education, including a package that would restore the 3.94% in base budget cuts and provide $7.0 million to the Board of Regents to fund minimal salary increases. We applaud his leadership, but the fact remains his latest proposal relies on the Legislature to enact revenue enhancements. And even if those proposed restorations are enacted, a significant shortfall for KU and other Regents universities will remain - including the $5.86 million in mandated but unfunded cost increases noted above.
As the budget moves through the Legislature, we will work hard to secure support for the positive parts of the Governor's budget proposal. At the same time, we will seek to identify other parts of the budget that are still not adequately addressed by the Governor's recommendations. I will share our progress with you as the session proceeds.
Block Grants and Tuition Proposals
During the last legislative session, the Governor endorsed the concept of block grants and "tuition ownership" for Regents universities. This new budgeting approach provides KU with greater flexibility, eliminating the practice of using tuition revenue to offset the state's funding obligation.
FY 2003 is the first year that the Regents submitted a budget under this new approach. The Board requested a 4.5% increase on behalf of KU and the other universities, along with funding for the third year of the faculty salary enhancement provided for in the Higher Education Reform Act (SB 345). Unfortunately, instead of these increases being funded, KU is facing the largest budget reduction in its history. Restoring the reductions, and achieving these modest increases, remains a high priority for us in the Legislature this spring. At the same time, we are preparing a five-year tuition plan at the request of the Board. On January 16, each university made a preliminary presentation to the Board, laying out the principles and vision that will ultimately drive its proposal. Specific proposals will be submitted in March or April.
I am pleased with the effort that has gone into this effort thus far. There have been many opportunities for comment and input by the campus community. More than 1,000 students and staff have attended presentations since November, and a website (www.ku.edu/tuition) provides a valuable source of information for everyone affected by the outcome of this process.
Recently, student government established a group, including faculty and staff, to assist in the development of these proposals. Among the central issues they will touch on will be how new tuition revenue would be spent in order to achieve the goal of enhancing the quality of a KU education. I welcome the group's involvement and will do whatever I can to incorporate its input into the proposal we ultimately send to the Regents.
Research Building Bonding Initiative
During this legislative session, a proposal is expected to be acted upon that would grant bonding authority for three major Regents projects, including a new research building at KUMC (funded in part by the Hall Family Foundation gift) and research equipment for the new biosciences laboratories at Lawrence.
On January 17, more than 100 legislators participated in an historic meeting on the campus of Kansas State University, learning about the projects and the benefits of research in life sciences, aviation and food safety. They heard from distinguished representatives of KU, WSU and KSU (including Michael Welch, vice chancellor for research at KUMC), and had a chance to ask probing questions and express their views.
U.S. Senator Pat Roberts attended and provided a strong endorsement. "Think of these universities as Kansas' largest employer," he said. "This is Kansas' most diversified company. Kansans rely on this company every day. .In a business model, you reward companies that have vision, executable business plans, expertise, and a pipeline of products to grow. Kansas State, Kansas, and Wichita State meet these criteria. In this context, these universities, who are staffed with our best and brightest professors, graduate students, and undergrads, deserve recognition from this legislature. It is time to acknowledge their success with an appropriate state bonding plan to provide much-needed research infrastructure."
There is considerable support for this proposal throughout Kansas. It's a proposal that is important to the future of KU and the state, and we will work hard this spring to ensure its adoption by the Legislature.
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