By Kara Augustine
“We face a very challenging time,” University of Louisville President James Ramsey said in an e-mail to his colleagues. This e-mail was sent in regards to planning for a potential budget cut for the next fiscal year.
“The state revenues have been falling in recent years, to where the revenue projections are less than what the actual revenue is taking in. Therefore, higher education as a system has been requested to make budget reductions,” Vice President of Finance Michael Curtin said.
Since 2002, there have been over $100 million in budget reductions at U of L.
“We’ve handled that in many different ways,” Curtin said. “In some cases, we have made expenditure reductions in the various colleges and schools. In other cases, we have used over-realized revenue to replace the state dollars. In some cases, tuition was increased to offset the state reductions.”
Arts and Sciences Dean Blaine Hudson explained that because U of L is a public institution, it has never been fully funded.
“Even though we do remarkably well on a relatively lean budget, it doesn’t leave us a lot of margin. So, even small reductions can be very damaging here,” Hudson said.
Last year, U of L endured a $10 million recurring cut. That was a 6 percent decrease in the budget.
U of L as a whole, and its individual colleges, made adjustments to soften the effects of the budget reductions.
“In the College of Business, we have had to cut back on the funding for the Labor Management Center. We have deferred faculty hiring, particularly in the economics area,” College of Business Dean Charles Moyer said.
Ramsey explained in his e-mail that the efforts to save money would continue.
“Through savings and other one-time funds we should be able to manage a budget reduction in the current year without severe academic impact, but next year will be totally different,” Ramsey said. “We’ve established a long-term budget committee to evaluate all programs on campus, and to look for ways to organize more efficiently, improve service and save money. “
This year is unique because the downturn in the national economy has created cuts similar to U of L’s all over the country.
“This year, we have two problems. The state budget is still structurally unbalanced. Now you have the national economy going into the tank at the same time,” Hudson said.
After last year’s $10 million cut, Curtin along with other staff members have created a budget reduction strategy in which they have placed some money centrally that will not be allocated to other departments. Instead, it will be used first if a budget cut takes place.
“If we were to do a 2 percent budget cut, we would be able to handle that centrally without touching all of the academic and support units. If it goes beyond 2 percent, we would have to go back out and ask them to make cuts,” Curtin said.
“How much that cut will be, and there probably will be one, we really won’t know until legislature sets policy,” Hudson said. “What concerns me most of all, is the possibility of another permanent cut. You have a lot of options when it comes to one time cuts. If it a permanent reduction, you have to use permanent money. That’s when you start talking about the potential to lay people off, cutting programs or that sort of thing.”
The Council of Post-Secondary education has advised U of L to prepare for a 2 percent budget reduction, which would be about $3.2 million.
Colleges within U of L are planning ahead in the case of higher budget cuts, but the decision of the exact amount that will be cut will not be known until later this year.
Feb. 3 is the first day of the Kentucky Legislature’s Session, and U of L students are planning to go to Frankfort and take action.
“SGA is going to Frankfort for the Rally for Higher Education. We are grouping with all of the other public institutions in the state to go and ask them to fund our futures,” Dani Smith, SGA Services Vice President, said. “Yes, we are fighting for U of L, but we are also fighting for secondary education in the state.”
Despite potential budget reductions, U of L is trying to keep tuition increases to a minimum.
Curtain said there are two primary sources of revenue for U of L: state funding, and tuition. When state funding falls short, the university’s recourse is raise to tuition.
“We are very sensitive to what students have to pay. Tuition increases have been higher than we would like them to be. But, what has happened in the past, our costs continue to go up, and we have no other place to get the revenue from if the state cuts the budget,” Curtain explained.
“We the students have to pay more and now we don’t have as much spending money and spending stimulates economic growth,” freshman Economics major Josiah Brock said.
According to Moyer, students need to be aware that there will be more cuts to come. But, although these are difficult economic times, the focus of improvement for which the university strives will not change.
“When you fund education, you are funding the future workforce and minds of the state,” Smith said. “The university is feeling the hurt all over in a recession like we are in now combined with budget cuts; the cost of education is increasing substantially for students.”
“This is one of those times where I think it is important for students to be politically active,” Hudson said. “We are facing some questions that at the heart of those questions, really concern what kind of state do we want to be? How do we want to build the future of the city and the state? When it comes to having a highly educated population, the benefits far exceed what you invest.”
