Kentucky's Budget Crunch
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Morehead State and the 2010-12 Budget

Briefing No. 1 by President Wayne D. Andrews

TO: Regents, Faculty, Staff, Students, Parents, Alumni, and Other Citizens

DATE: February 23, 2010

In keeping with my pledge to keep you fully informed about matters affecting Morehead State University and to do so in a timely manner, today I am reporting on the status of the new state budget for the 2010-12 biennium, which starts July 1.

This is the first of a series of budget briefings I am providing via e-mail and postings on the University’s Web site at the following link:

In case you are not aware, the leadership of the Kentucky House of Representatives disclosed late last week that preliminary planning for the 2010-12 state budget includes at least seven specific reductions in state spending, including two which impact our institution and the rest of public higher education.

Our state appropriation would be reduced by two percent each year of the biennial budget, a total cut of about $2 million. No capital construction projects would be funded during the two-year period.

Legislative leaders say they are trying to find money to pay maintenance and operating costs for new campus facilities opened since 2008 or expected to open by 2012. The total M&O outlay for the eight universities and KCTCS would be just over $37 million with MSU’s share at $2.9 million.

To date, we have received no additional funding for the new Space Science facility or the new Equine Health Education Center, both of which became operational last summer. Scheduled to open later this year is the Center for Health, Education and Research. The Student Recreation and Wellness Center will be finished in 2011. The state historically had provided M&O funds for new facilities until 2008. If those funds are not forthcoming, we will be forced to reallocate existing monies to pay those costs. In essence, this would be tantamount to another budget cut of $2.9 million.

As this process moves forward over the next two months, please e-mail your questions and/or comments to me using our online Budget Suggestion Form

Here’s what we know today about other proposed alterations in the next state budget:

• Changes in the state’s employee health insurance program would not impact our employees. We are self insured and our coverage is not part of the state’s policy.

• A series of cuts in public school funding are being strongly opposed by various P-12 lobbying groups, including the KEA. At this point, we have no details on how those changes would impact grant monies we receive from the Kentucky Department of Education or our developing timetable for complying with Senate Bill 1.

• We are encouraged by announced intentions to add new state funding to the state’s retirement systems, including KTRS and KERS. At the same time, KTRS is planning to ask the legislators to increase the contribution rates paid by the institutions and our employees for retiree health insurance costs. Again, we have no details.

The process of finishing the budget details will take at least a week, we are told, so that the House can make its final markup of the budget bill over the weekend of February 27-28. The budget bill is expected to come out of the House Appropriations and Revenue Committee early next week. Final passage on the House floor is tentatively scheduled Thursday, March 4.

The bill then moves to the Senate for consideration. The Senate must finish its work on the two-year budget bill and get it back to the House for concurrence with changes, if any, preferably no later than March 30.

Gov. Steve Beshear will consider any vetoes of line items in the budget during the 10-day veto period which ends April 11. The legislature goes back into session on April 12 for the last two days of its 60-day session. Overriding a veto requires only a simple majority in each chamber.

New information will be available in the days and weeks ahead and I intend to share it with you without delay. In closing this report, I want to assure everyone that we will do our best to balance the 2010-11 budget while doing the least damage to our students and their families, our employees and our vital missions of teaching, research and service. Meanwhile, each of us should try even harder to focus on our jobs and what we can do each day to advance this wonderful institution.

Please know that I appreciate everything you do for MSU.