HIGHLAND HEIGHTS, Ky. – While colleges in Ohio welcome new cash from the state, Northern Kentucky University and Gateway are cutting jobs and spending as Kentucky continues an eight-year retreat from investing in higher education.
Kentucky's new two-year budget calls for college and university spending to drop 4.5 percent.
Students will pick up part of the shortfall. This week, the state council that oversees higher education capped tuition hikes at $432 a year for NKU and similar schools – known as comprehensive universities – and 5 percent for University of Kentucky and University of Louisville, which are known as research institutions.
Job and Spending Cuts
Gateway and other technical and community colleges will increase tuition no more than $9 per credit hour.
Even with shifting more costs onto students, colleges and universities still have a $65 million gap to fill due to a combination of state cuts and rising costs, according to the Kentucky Council on Postsecondary Education.
NKU's board of regents has voted to raise tuition 3 percent for undergraduates and 4-5 percent for law school and other graduate programs.
That's a smaller tuition increase than NKU could have made, according to Director of Public Relations Amanda Nageleisen, and it will be coupled with cuts that President Geoffrey Mearns will present to the board at a special meeting in May.
NKU is also reviewing bids from outsiders to buy its public radio station, WNKU.
"We are looking at measures like that independent of the state budget," Nageleisen said.
Gateway is being hit hard by the state cuts and a dip in enrollment. As a result, Gateway is cutting 20 jobs by leaving 10 open positions unfilled and laying off 10 other active faculty and staff.
“Significant cuts in our state appropriation, declining enrollment and increases in fixed costs have forced Gateway to determine a way to reduce costs while still providing high-quality service to students. With over 70 percent of our unrestricted budget in salaries, unfortunately, further cuts mean positions," Interim President Vic Adams said.
Most States are Restoring Cuts
The cuts are a stark reversal of the state council's recommendation last fall that Kentucky add $200 million to higher education spending to begin to reverse seven years of declines that began with the 2008 recession.
In 2015, Kentucky was one of only two states, along with West Virginia, that cut higher education spending and most states are expected to invest more in education in 2016.
In Ohio, lawmakers boosted state spending for the 2016-17 school year by 6.7 percent and coupled that with a mandatory tuition freeze.
Bevin and allies in the General Assembly decided that cutting spending to bolster the state's deficit-plagued pension system and Medicaid system were higher priorities than maintaining or growing state spending.
Richard Innes, education analyst for the right-leaning Bluegrass Institute, said the cuts were part of a necessary belt-tightening throughout state government.
"It's now coming time to pay the piper," Innes said.
Innes thinks colleges should cut more costs rather than raise tuition.
"It's disappointing that they're going to pass this along to the students. I'm not sure that's the way to go. We have economists working at all our universities, and they should be working day and night working to find new solutions," he said.
Expenses are Growing
Kentucky Council on Postsecondary Education President Bob King points to numerous mandatory costs that universities have to pay as evidence that a search for efficiencies has limits.
Dr. Bob King, president of the Kentucky Council on Postsecondary Education.
In the eight years since Kentucky started cutting higher education spending, costs have gone up $3.5 billion, King said, driven by several factors:
• Lawmakers shifting the cost of maintaining and operating new buildings onto universities.
• New obligations to bolster pension fund contributions.
• Expanded financial aid programs to help maintain enrollment that now exceeds the aid students receive from Pell grants and state assistance combined.
• Inflation of fixed costs like utilities, workers compensation insurance and health care insurance.
The state council allowed schools to increase tuition to generate an additional $2.5 billion in eight years, leaving campuses to find another $1 billion in cuts and new revenue, King said.
"You're hearing from the presidents that they're laying off hundreds of employees, eliminating programs, consolidating offices and services," he said. "For people like Mr. Innes to say that there are all sorts of efficiencies that the campuses are ignoring I don't think is supported by the facts."
What's Next?
King holds out hope of future increases after Bevin told university presidents that spending could increase in coming years if the state of the pension funds improves to his satisfaction.
He also clearly heard the governor's warning that future cuts to higher education would be far worse if state lawmakers couldn't rein in pension and Medicaid deficits.
In the meantime, King is bracing for the loss of top researchers and professors from universities who may be lured to institutions that are better funded.
The risk is that we start seeing significant erosion in our faculty core. In early 2000s, Kentucky created Bucks for Brains to provide funds for competitive salaries, and it worked," he said. "Now the opposite is the case. Other states now have a capacity that we are losing, which is to attract high-quality researchers."
And the cuts are making the job of producing a highly skilled workforce harder.
"I think everybody who is attempting to improve and grow the economies of their states – governors, legislators, judge executives – tell us what they need most is a highly skilled, highly educated workforce. And a high school education is simply not enough to be qualified. Where we are reducing spending has an impact on this whole issue," King said.
