UK Budget Will Include No Reductions in Force

LEXINGTON, Ky. (May 22, 2020) — University of Kentucky President Eli Capilouto on Friday said the UK budget for next year will not include reductions in force, and the university is experiencing fewer employees being placed on administrative no-pay status than first estimated.

Capilouto said he is directing a portion of UK’s “contingency fund,” created to help deal with crises, to augment the budget this coming year. The move will save approximately 100 jobs.

UK’s Board of Trustees will consider the institution’s budget for next year at its June meeting.

“Given the state of our economy in Fayette County and in the Commonwealth — and our desire to protect our greatest asset, our people — we believe it is time to use some of those contingency funds,” Capilouto said.

UK faces more than a $70 million shortfall in the coming year. The university planned deeper reductions to create a more than $11 million contingency fund that would address unanticipated issues and emergencies. The bulk of that fund is being generated by the decision, approved by the Board of Trustees in May, to reduce the employer match to retirement funds, for one year, from 10% to 5%. 

 Other budget measures announced Friday include:

• The university is moving forward today with what officials hope is a temporary move of fewer than 100 positions to administrative no-pay status. That’s in addition to the 200 campus employees placed on that status last month.

• Previously, UK announced some 1,700 employees would be placed on administrative no-pay status because the work simply was not there. The vast majority of those moves were to occur at UK HealthCare. Since the announcement, approximately 700 UK HealthCare employees were moved to administrative no-pay status, but many of those in the clinical areas have returned to work as more patients have sought care at the hospital and clinics. As with previous no-pay status, those impacted may elect to use accrued vacation, holiday or bonus leave and UK will pay health premiums for a time.

• When those benefits are exhausted, employees may apply for unemployment. UK will pay both the employer and employee portion of health benefits premiums for up to 90 days or until the employee returns to work. Sick and vacation time also will continue to accrue for up to 90 days.

• No current graduate students will lose their assistantship positions due to budget reductions nor will those working on sponsored research projects see a reduction in tuition and stipend support for the duration of the external funding.
• Further, the Offices of the Provost and Vice President for Research will target $250,000 to the Student Emergency Fund for graduate student needs, and the Financial Wellness Office staff will be increased to specifically address the needs of graduate students.

 “These measures help protect our people, who are so critical to our mission of putting our students and their success first, while conducting research and providing care essential to the future of Kentucky,” Capilouto said. “But these measures also are vitally important for our hometown, Lexington and Fayette County.”

Capilouto said UK is approximately 14% of the employee base in Fayette County and approximately 18% of the county’s payroll — the source for most of the funding for essential government services and public safety. That means UK has a critical role to play in sustaining the local and state economies, “even as the richness of our community sustains us.”

“During a fraught and tenuous moment,” Capilouto said, “we have a special responsibility to do what we can with the resources with which we are entrusted to protect this place, to protect our homes and to protect our community.”