LEXINGTON, Ky. (June 16, 2021) — University of Kentucky President Eli Capilouto says UK’s mission is to advance Kentucky — its health and education, its economy and quality of life.
UK’s proposed $5.1 billion budget for fiscal year 2021-2022, which the Board of Trustees considers Thursday, honors that mission, Capilouto said, by investing heavily in the people who do the work that makes advancing Kentucky possible — the university’s faculty, staff and students.
“We have a special community, whose mission for more than 156 years has been to serve our state. It’s why we were created, and it’s the mission we seek to honor every day,” Capilouto said. “That vital work is only possible when we make college more affordable for students and families. It’s only possible when we invest in the people who do the teaching and research and provide the lifesaving care, which does so much to make our state stronger and healthier.”
To that end, Capilouto said that the proposed budget further invests in students and families by continuing historic steps to hold down the cost of a college education and in UK’s faculty and staff, with substantial measures to increase compensation and benefits.
Investing in Students and Families
The proposed budget would if approved by the Board:
- Increase by only 1% tuition and mandatory fees for undergraduate and graduate students. For undergraduate students from Kentucky, that would result in tuition and fees equaling $6,305 in Fall 2021, up from $6,242 last year. It’s the second year in a row that tuition increases have been held to 1% — perhaps unprecedented in UK’s history. This also means that the four-year average for annual increases sits at 1.7%, notably lower than four-year U.S. inflation rate of nearly 2%.
- Invest $148 million in scholarships and financial aid that students don’t have to repay, more than double what was invested 10 years ago. In fact, nearly 90% of UK’s in-state undergraduates receive scholarships or aid. On average, their out-of-pocket costs for tuition and fees last fall was $1,759. About half of UK’s in-state students graduate without debt and, of those who do, the average debt was less than $35,000.
- Target scholarships and aid to students who need it most, those with unmet financial need. In Fall 2020, about 25% of undergraduates from Kentucky came from families where the median income was $23,346. Those students had no out-of-pocket costs for tuition and fees. They also were provided, through aid, more than $700 to cover other expenses. In fact, through the UK LEADS program, unmet financial need among UK students declined to a level last experienced four years ago.
Investing in UK’s People
The budget, if approved, would also:
- Increase the minimum hourly rate to $15 by January — the fourth time in six years that rate has been increased.
- Provide a $1,000 one-time payment to all full-time, regular, non-UK HealthCare employees (faculty and staff) in July and 2% merit pay increases in January — the ninth time in 11 years employees have received pay raises. As the UK HealthCare enterprise operates on a separate salary review cycle, decisions will be made this fall about UK HealthCare employee merit increases.
- Return the 2-to-1 retirement match for UK employees that was temporarily reduced last year as the university managed a more than $72 million budget shortfall as part of managing financial challenges during the pandemic.
- Create a new paid leave for staff of two weeks to care for new children and one week for parental care. Faculty leave is managed through a different process.
- For staff in non-health care areas, this budget will extend the deadline to use accrued vacation time set to expire June 30, 2021, until March 31, 2022. For UK HealthCare employees, nonexempt staff may be paid for their vacation time set to expire on Sept. 30, 2021, per the existing UK HealthCare policy. Exempt staff may extend any vacation time set to expire on Sept. 30, 2021, until June 29, 2022. You can read more about vacation policies here: www.uky.edu/hr/news/roll-over-your-expiring-vacation. Faculty vacation is managed through a different process.
Breaking Down the UK Budget
Eric N. Monday, UK’s executive vice president for finance and administration, said the proposed budget of nearly $5.1 billion is the largest in the university’s history and is about $700 million more than last year. UK’s overall budget has grown by nearly 90% in the last 10 years, nearly double what it was in 2012.
Here’s how the component parts of the budget break down:
- The increase in this year’s proposed budget is largely driven by the continued growth of UK HealthCare, which now represents nearly half of UK’s budget.
- More than 61% of the budget — the hospital and clinical services, largely — must be used for designated purposes such as patient care.
- Another 14% of the university’s budget is designated for specific purposes as well — restricted funds like research grants and contracts and auxiliary services which receive no money from the university’s general fund and generally fund themselves (like UK Athletics).
- Finally, fund balances are non-recurring funds invested by the institution, which essentially represent the institution’s rainy-day fund for emergency uses and building projects. That’s nearly 8% of the budget.
- What’s left is a little more than $840 million — the so-called undesignated fund or 17% of the budget — that is comprised of tuition dollars and support from the state. Those resources fund the daily operating expenses of the university: teaching and instruction; the salaries of employees on much of the campus; scholarships and financial aid; and utilities, among other things.
“When you think about your budget, it’s the best evidence of what you value,” Monday said. “It’s the best evidence of what you want to achieve, because it’s where one of the most precious resources — our funds, our students’ money, our state’s money — are invested. And the question is, what do you want to achieve? For this institution, as President Capilouto has said, we invest in our students and our people because that’s how we do the most to advance our state.”
The University of Kentucky is increasingly the first choice for students, faculty and staff to pursue their passions and their professional goals. In the last two years, Forbes has named UK among the best employers for diversity, and INSIGHT into Diversity recognized us as a Diversity Champion four years running. UK is ranked among the top 30 campuses in the nation for LGBTQ* inclusion and safety. UK has been judged a “Great College to Work for" three years in a row, and UK is among only 22 universities in the country on Forbes' list of "America's Best Employers." We are ranked among the top 10 percent of public institutions for research expenditures — a tangible symbol of our breadth and depth as a university focused on discovery that changes lives and communities. And our patients know and appreciate the fact that UK HealthCare has been named the state’s top hospital for five straight years. Accolades and honors are great. But they are more important for what they represent: the idea that creating a community of belonging and commitment to excellence is how we honor our mission to be not simply the University of Kentucky, but the University for Kentucky.