The Louisville Cardinal

U of L suspends hiring freeze, pushes enrollment increase

By Kyeland Jackson —

Acting Provost Dale Billingsley said a hiring freeze, implemented after a $48 million budget deficit shook the university two weeks ago, was temporarily lifted.

He also proposed growing the student population to 30,000 students, a 36 percent jump, in an exclusive interview with The Cardinal March 2.

“A formal freeze, in the sense of absolutely no hiring, was pretty much suspended (March 1) when we gave the academic units and the support units expense budget targets for the remainder of the year,” Billingsley said. “I told the deans and vice presidents at that time that they could make the commitments that they thought necessary for the strategic mission of their offices and their units.”

The targets are based on 2016 spending and projected salary equity adjustments. But Billingsley said deans know some money will not be there next year, pushing deans to be frugal.

Billingsley said shortfall means U of L will now take an “all funds view,” factoring assets, liabilities and other finances into the budget.

“The deans and the vice presidents are going to have a load to carry that they haven’t always had to carry before, because they haven’t been asked to reconcile revenues and expenditures in the way that they manage their units,” Billingsley said.

Kimberly Kempf-Leonard, dean of Arts & Sciences – U of L’s largest academic unit, responded she was out of the office fundraising when questioned at the time of this article.

Billingsley expects revenues will reduce the projected $48 million deficit as the university looks for income from students, grants and projects.

Increased enrollment is an immediate revenue source, which he said trails other research universities U of L’s size. “Over the next several years, we’re going to try to increase that enrollment by about 8000,” Billingsley said, “so that we can be up to what looks like the threshold level for supporting a research university.”

Though the athletics department could contribute money, Billingsely did not know if Interim President Greg Postel has asked they help.

Applications for next year increased around 7.5 percent and U of L’s aiming for 600 more students than 2016. Billingsley said bolstering enrollment, like recruitment outside of Kentucky, can help fill the budget gap.

Fewer tuition dollars than expected account for $10.6 million of the shortfall. Billingsley also said “significant deficits” in clinical practices’ income contributes to the general fund’s $23.1 million deficit.

Spending cuts rocked the university as units began reducing expenditures. Postel reduced his staff, via attrition, resignation or firing, from around 20 workers to five. Seven were fired Feb. 28.

“A lot of these people were really nice people. Some of them had been at the university for 20 years. But we can’t afford it,” Postel said during the March 1 faculty senate meeting.

Cuts forced reductions across U of L, stalling some salary rates and halting campus-wide salary adjustments and expenses. Regardless of cuts, Billingsley said the university will honor pre-scheduled promotion and tenure recommendations for 93 faculty.

He anticipates budget constraints will strengthen the university.

“I’m not happy about it. I’m not happy that we will probably lose good faculty and staff,” Billingsley said. “The only positive consequence of that, or one of the only positive consequences, is that at the end of what will be a very difficult and bitter process, I think we’ll have a stronger university.”

Billingsley said concern for the budget grew in mid-January, preceding Postel’s reveal of a $48 million deficit during the Feb. 16 board of trustees meeting. That deficit is around four percent of the university’s budget. Postel suggested budget cuts and new revenue options to help balance the budget, including curtailing the University of Louisville Foundation’s spending. ULF’s financial advisors said foundation spending was unsustainable, warning unabated spending would outstrip its resources in a December meeting.

Billingsley revealed U of L’s net position has dropped from $96 million in 2011 to a deficit of $7 million by 2016. Plunging reserves could prompt Moody’s, a debt rating service, to downgrade U of L again. Moody’s lowered ULF’s rating in 2016 to negative.

“This information, if replicated this year, is going to raise flags with Moody’s and SACS. And we don’t want any more attention from either of those distinguished bodies,” Billingsley said.

The Southern Association of Colleges and Schools placed U of L on probation in December, citing questionable governance and political influence from Gov. Matt Bevin’s acts. SACS recently questioned the relationship between ULF and the university,  saying U of L possibly violated three more accrediting standards.

The 2018 budget, finalized with a budget development committee’s guidance, will be presented to the board of trustees in June.

File photo / The Louisville Cardinal