Letter from UK Prez Lee Todd

Letter from UK Prez Lee Todd

[a UK staff member and Ace Reader sent this to Ace with a request for anonymity and a note that says, “I’ll just hit up Coach Cal for a loan.” In the letter, Todd states, “No tuition or state appropriation dollars are used to support UK Athletics. None.”]

Letter from Dr. Lee Todd

“There are several issues related to the University’s current budget and our development of the budget for 2009-2010 that I want to bring to your attention. As you know, the decisions we must make are in the context of economic conditions that have had a substantial impact on the financial support we get from the state. We face the very real prospect of more tough times in the months that lie ahead.

Last Friday, the Governor issued a “Cutback Order” that will reduce our state appropriation by another 2 percent ($6.3 million) this fiscal year.
Counting this reduction, UK’s state appropriation has decreased $25 million
in just the last 16 months. And this will be the eighth time in eight years that UK has absorbed an appropriations reduction.

If the cut is only 2 percent in 2008-2009, Provost Subbaswamy, Executive Vice President Frank Butler, and I will absorb that cut centrally – so operating unit budgets will not be reduced this fiscal year.

We anticipate the 2 percent cut this year is permanent – in other words, we will not get that money back next fiscal year. And that probably will not be the end of it. At some point in the next few months, the Governor will receive an estimate about the deficit in the state’s budget for 2009-2010. That deficit is expected to be in the hundreds of millions of dollars. There are only so many ways to solve that problem, and most of them include further reductions in state support for postsecondary education. So there is a good chance we have not seen the last of budget cuts.

Meanwhile, we face increases in fixed costs – utilities, student financial aid, and general operating expenses – of at least $16 million in 2009-2010. The Federal Stimulus Package will help, but it will not solve the state’s budget deficit in 2009-2010. The amount of operating dollars the University of Kentucky will receive, if any, from the Stimulus Package over the next two years has not been determined. But we do know that those are all one-time dollars.

As you know, repeated cuts in state appropriations already have forced the University to undertake a long list of actions to reduce spending and avoid future costs. Beginning in 2002, using a combination of cost savings and cost avoidance initiatives, UK has redirected over $88 million. We continue to search for savings and greater efficiencies in our operations. But everyone watching this institution needs to know that we are a lean operation – we implemented the easy solutions a long time ago.

To partially – but not completely – offset the loss of state appropriations and increases in fixed costs, we will increase tuition for Fall 2009. Last month I recommended and the Board of Trustees approved a 5 percent increase in most tuition rates for 2009-2010. This is consistent with the guidelines established by the state Council on Postsecondary Education, which has the statutory authority to set tuition for all the public colleges and universities in Kentucky. In working with the Council, we attempted to set a tuition increase that is sensitive to the economic challenges facing our students and their families while generating the revenue necessary to sustain our institution.

These circumstances leave us with more expenses and fewer dollars – and potentially far fewer dollars – to cover them as we move into next fiscal year.. And there is much we do not know about what lies ahead. I regret that there simply is too little money and too much economic uncertainty to allow us to give salary increases for faculty and staff for a second year in a row. I assure you that if we could find a way to provide an increase, we would. But already tight times and uncertainty about the future means we should prepare for more difficult days ahead, even as we hope the economy will turn around soon.

What we can and will do is cover the entire increase in health benefit premiums for employees (UK HMO) and we will freeze parking fees for 2009-2010. I regret that salaries will not go up, but we are taking these steps to try to keep people’s pay from going backwards.

Media attention about the University has been consumed in recent days bythe men’s basketball program. Let me set the record straight. No tuition or state appropriation dollars are used to support UK Athletics. None. And the athletic fee UK students pay – $35 per year – is well below the national average. UK is one of very few public universities that has an athletic program that is entirely self-supporting. UK Athletics pays for the scholarships for our student athletes; it pays for the operation and maintenance of all athletic facilities; and it pays for all the compensation provided to all coaches and support staff. In fact, while most athletic programs drain money from their universities, UK Athletics contributes over $1 million annually to the general scholarship fund for UK students who don’t play a sport.

In the months ahead, I will keep you posted on the condition of the University’s budget. Thomas Paine wrote many years ago of times that try men’s souls. We surely are living in those times. The news confirms week after painful week the economic crisis we face as a University, as a state, and as a nation. The resulting anxieties are heightened because the unprecedented nature of our current condition makes it unclear how much longer the crisis will last.

Our University already has weathered substantial blows delivered by these difficult economic circumstances. But when this crisis subsides – and it will subside – our University will stand stronger than before. The University of Kentucky may be battered, but we are unbowed. And though the length of the current crisis remains uncertain, this state finds in our University a secure foundation that no crises can crack.

Our students are understandably anxious about the future. But they should rest assured that they do not face it alone. We remain steadfast in our commitment to cultivate in them the tools necessary to their personal and professional success and their capacity to not be victims of an uncertain future, but to be masters of it. We also make clear to Kentucky’s communities and businesses that we remain a steady and sturdy partner in their efforts to survive the current storm and emerge intact and in control.

We should respond to this remarkable hour with our very best – unquestioned faith in our abilities and belief in our purpose.

I appreciate the continuing hard work of every member of the University community. I am very proud of the attitude I have seen demonstrated by faculty and staff in these difficult times.”