Monday messages

Dealing with the State's Financial Crisis

KU's finances have been in the news a great deal lately, so I am using this memo to keep you informed about how the university has dealt with the state's financial crisis.  I also think it's important that you understand what the prospects are for the future.

As you know, the 2002 legislature ended its deliberations by raising some revenues and cutting some expenditures.  At one point, KU was bracing for a potential budget cut of more than $20 million.  Because we made a strong case for support of education and research, the final outcome was a cut of only $7.4 million, or about 3% of the our total budget.

In identifying how to deal with that 3% cut, we have tried to follow some basic principles.  They reflect the university's core values and are consistent with past experience.  The principles are:

• Students come first.  Educating students to achieve graduation - while maintaining quality -- is always the highest priority.
• Academic programs are a higher priority than non-academic programs.
• Cuts will not be made "across-the-board."  Doing so is a recipe for mediocrity.
• Vital research programs are a high priority.  Public service programs, while important, must assume a lower priority if they require major subsidies or are not truly excellent.
• Seeking external grant support, from government agencies and private sources, is a high priority and must be aggressively pursued.
• KU is a public university, not a private one.  Increased tuition must be used to maintain and build upon the university's excellence.  The state should not meet its responsibilities by substituting tuition revenue or grant funding for taxpayer support.
• Administrative structures must be as lean and efficient as possible, and the general size of administration should be reduced.
• The university cannot be all things to all people.  The university must have the courage to eliminate or consolidate programs in order to preserve the overall quality of the institution.
• Students, faculty, staff and others should be consulted when budget reductions are necessary.  Those closest to the situation often have the best ideas about how to provide services more efficiently.

The university and the state of Kansas have gone through many funding crises during our history.  Despite adversity, KU's reputation for quality has grown, and we are recognized as a major, national university. During this crisis, I am confident that programs that are central to KU's mission, and which exhibit a tradition of excellence, will be maintained.

My confidence is rooted in the KU faculty and staff, who have demonstrated time and again that ingenuity, creativity and energy can see us through most any crisis.

Nonetheless, the next few months will be difficult.  The Governor has indicated that additional budget cuts may be necessary.  If this comes to pass, the principles outlined above will continue to be our guide.  Some lines may get longer, some people may have to perform more than one job, and some programs important to particular groups may be threatened or curtailed. No doubt, critics will offer their counsel, complaints and free advice. There will even be mornings when we come to campus feeling a little depressed about the situation.  That's a natural human reaction.

Yet you don't have to look far to find states and universities that are in worse trouble than we are.  In Jefferson City, the legislature approved a 10% cut in state appropriations for the University of Missouri. This led to higher student fees, deferred maintenance, a hiring freeze, and an offer of early retirement to 2,000 staff.  They've even discussed the possibility of closing a campus.  In Tennessee, the new fiscal year began without a budget.  A brief shutdown of state government closed their universities and brought an early end to the summer session.

In Kansas, none of the Regents universities is providing a regular salary increase this year.  In the absence of new state funding, to have provided even a modest increase for faculty and unclassified staff would have required elimination of a substantial number of existing positions or a severe reduction in the non-personnel portion of our budget.  Neither of these options was acceptable, particularly in light of the fact that the Legislature froze the salaries of our classified employees.  Making the difficult reductions that would have been needed to fund salary increases seemed even less advisable given the likelihood that additional budget cuts will be imposed on us by the Governor later this year.

Many of you have made a point of telling me that you understand the salary situation, and I appreciate that.  Nobody is happy about a year with no raises.  Our hope is that, with increased tuition revenue and fiscal restraint, the academic goals of the university will continue to be met.

A major public policy question remains: will the state find a solution to the structural deficit in the budget?  The current economic recession, coupled with the substantial tax cuts adopted between 1995 and 2000, has placed the state in a situation where it is not able to collect enough revenue to provide the services that people need and expect.  As the theme for this year's Kansas Economic Policy Conference (presented October 17 at the Kansas Union by the  Policy Research Institute) puts it:  "Can Kansas Afford Its Future?"

If you believe, as I do, that most Kansans need and expect high quality education, then the state will probably find the political will to solve its financial crisis.  Part of the solution involves us as voters.  I encourage all of you to become engaged in the future of Kansas by taking an active interest in the August primary, the November general election, and the decisions that the next governor and the next legislature will make regarding public higher education in our state.