Attorney general: Ky. gov's college cuts illegal

Posted at 9:33 AM, Apr 01, 2016
and last updated 2016-04-02 03:17:34-04

FRANKFORT, Ky. -- Republican Gov. Matt Bevin ordered immediate 4.5 percent budget cuts to public colleges Thursday, but Democrat Attorney General Andy Beshear called the mid-year cuts illegal Friday and ordered Bevin to rescind the order.

In a letter to Finance Secretary William Landrum and Budget Director John Chilton, Bevin ordered the allotments for Kentucky's eight public universities and its community and technical college system to be reduced by 4.5 percent "before the close of business" Thursday. The cuts would impact state funding for the colleges and universities in the current budget year that ends June 30.

Bevin's order comes as state lawmakers are locked in a stalemate over a two-year state spending plan. Senate Republicans have insisted on taking money from colleges and universities and spending it on the state's public pension debt, estimated at more than $30 billion. House Democrats have refused to agree to any cuts in education.

The two sides broke off negotiations Thursday, making it less likely the legislature will pass a budget by April 12. That could lead to a partial shutdown of state government.

Bevin first proposed his mid-year budget cuts in January as part of a plan to reduce state spending by $650 million to address the state's public pension debt. He proposed a 4.5 percent cut in the current year plus another 9 percent cut over the next two years. The House and the Senate did not include Bevin's current year cuts in their budget proposals. But Bevin, citing a state law that allows him to reduce allotments for executive branch agencies, cut their budgets anyway. Bevin spokeswoman Jessica Ditto confirmed the letter Thursday.

"It speaks for itself. No additional comment," she wrote in an email to The Associated Press.

Adding additional comment Friday, Bevin's office released the following statement:

“Our pension system is on the brink of insolvency. We have more than $35 billion in pension obligations.

“It takes leadership from all stewards of taxpayer dollars to keep our commitments to our teachers and state workers. I appreciate our university presidents who recognize the magnitude of this challenge and are willing to participate and contribute to the solution.

“Once we get our fiscal house in order, Kentucky will be in a much stronger position to make additional investments in higher education.”

At a news conference Friday afternoon, Beshear announced that he will give the Republican governor seven days to reverse the order before filing litigation.

Beshear said state law allows mid-year budget cuts to universities only if there is a declared revenue shortfall, which there is not.

Beshear's office released the following statement Friday:

“The governor’s unilateral action in cutting the appropriated funding of colleges, universities and community colleges was outside of his authority. The law on budget reductions is straightforward. It requires a declared shortfall that does not exist. If it did, the last budget bill that was passed and signed into law dictates the steps that must be taken. We are therefore requesting the governor withdraw his order. We are confident he will comply.”

Bevin's order would have applied to all of Kentucky's public colleges and universities: Eastern Kentucky University, Kentucky State University, Morehead State University, Murray State University, Northern Kentucky University, the University of Kentucky, the University of Louisville, Western Kentucky University and the Kentucky Community and Technical College System.

University of Kentucky spokesman Jay Blanton said university officials have not been officially notified of the cuts. University President Eli Capilouto has been one of the most vocal critics of Bevin's proposed cuts, calling them "draconian."

"Gov. Bevin announced this measure in January, so we anticipated it," Blanton said. "We will be working over the next few months to implement this reduction with the context of our current-year budget. It is too early to speculate on the specific measures we will take."

Northern Kentucky University President Geoffrey Mearns said in a statement Friday that the cut would have an impact of nearly $2.2 million to NKU. He said he believed the university would be able to manage the "significant" one-time cost.

"While I am disappointed with this action, I recognize that Governor Bevin intends to use these funds to reduce the substantial unfunded liabilities in the state pension system, a system that has been increasing our employer contribution rate dramatically," Mearns said. "Those increases have had a significant, adverse impact on our university budget."

NKU will not have any furloughs, but the reduction will make it difficult for university officials to develop a balanced budget in the next two years, Mearns said.

University of Louisville spokesman John Karmen said the school is still examining the impact any budget cuts would have on the school.

Other schools have already taken action to address the cuts. Morehead State University officials announced a mandatory, unpaid five-day furlough for all employees in response to the cuts.