Capilouto: Budget Will Present Challenges, Opportunities

LEXINGTON, Ky. (May 3, 2016) – The University of Kentucky budget for 2016-2017 will be marked by challenges, but also by a relentless resolve to continue the institution’s remarkable momentum of the last five years.

That was the message that UK President Eli Capilouto conveyed Tuesday to the Board of Trustees as university officials continue putting the finishing touches over the next month on a proposed budget as well as tuition and fees for the 2016-2017 academic year.

“Yes, the final state budget does present challenges,” Capilouto told trustees during a session to provide an overview of issues surrounding the budget. “But amid a busy and sometimes difficult spring semester, there are powerful indicators of the incredible work happening across our institution.”

On research and service, Capilouto cited the recent faculty involvement and leadership at the National Drug Summit last month in Atlanta as well as the visit to campus by the U.S. Department of Energy Secretary to discuss the state and UK’s leadership role in a global energy economy.

On continued student success, Capilouto pointed to the more than 4,800 students who will graduate Sunday during commencement ceremonies on the heels of another record year for the size of the first-year class and overall student body.

Looking ahead to the fall, Capilouto remarked that UK has had another record-breaking year for applications, which topped 24,000 this year for the first time.

“Our students created, performed, discovered and learned,” Capilouto said. “Our faculty broke new barriers of understanding in the pursuit and creation of knowledge. We served more communities, healed more people, and educated more students than at any point in our history.”

These challenges are not insignificant,” said UK Board Chair Britt Brockman. “But our commitment to Kentucky – as the university for Kentucky – is even greater. As President Capilouto often says, we will have to find new and innovative paths to earn our way forward. That’s what we intend to do.”

To that end, Capilouto said four principles – informed by the recently adopted UK Strategic Plan -- will guide the formulation of the budget, which will have to confront a 4.5 percent – or $12.6 million cut – in state appropriations.

The following year the state appropriation will be flat, but 5 percent of that base will be determined by an as-yet-developed performance funding plan. At the same time, student financial aid and scholarships will increase by more than $20 million over the next two years. Those figures don’t yet include millions more in fixed costs, such as utilities.

Yet, Capilouto said his guiding principles against that budgetary backdrop, include:

·         Student access and affordability. The rolling four-year average for tuition increases is now under 5 percent.

·         Competitive pay for faculty and staff. Staff and faculty have experienced merit pay raises each year for the last three years.

·         Strategically plan to prevent across-the-board cuts and maintain and enhance academic quality. Since 2008 – and now with the new budget – UK has experienced nearly $70 million in recurring cuts. In the last four years, though, the university has worked to insulate academic areas and the teaching and research mission from those reductions, increasing the size of the faculty and their compensation, for example. UK’s research enterprise has continued to grow and retention and graduation rates have increased.

·         Diversity and inclusion. UK has record levels of diversity among students, but progress must be made in closing the gap in retention and graduation rates that exist for students in underrepresented populations. As part of that effort, more will continue to be done to create a campus environment where everyone feels included.

“Throughout every difficult budget, we’ve worked hard and been smarter in how we plan. We’ve tried, to the extent possible, to insulate our academic enterprise from deep reductions,” Capilouto said. “We’ve avoided across-the-board cuts to all programs, because that’s not how you build success toward priorities."

Capilouto’s presentation to the Board of Trustees can be found at:

UK is the University for Kentucky. At UK, we are educating more students, treating more patients with complex illnesses and conducting more research and service than at any time in our 150-year history. To read more about the UK story and how you can support continued investment in your university and the Commonwealth, go to: #uk4ky #seeblue