Kentucky's public colleges and universities want more money, but Republican lawmakers say the best they can hope for is to break even.
The Council on Postsecondary Education approved its two-year budget request Friday, asking for an extra $160 million in state funding for the state's eight public universities and its network of community and technical colleges.
About 35 percent of that money would be for additional operating expenses, while the rest would be a combination of debt payments and retirement contributions.
But Republican Gov. Matt Bevin has already warned state agencies to prepare for spending cuts as the state is facing an estimated $155 million shortfall this year. In addition, lawmakers were told Thursday they would need to find up to an additional $1 billion out of a nearly $12 billion budget to keep the state's woefully underfunded pension system afloat.
"I think that the universities are going to have to do a lot of belt tightening," said Republican Chris McDaniel, chairman of the Senate's budget-writing committee.
Kentucky's public colleges and universities have been tightening their belts for the past decade as the legislature has cut their budgets eight times for a total of more than $200 million. Adjusting for inflation, Kentucky's higher education system has lost about one-third of its per student funding, a drop of nearly $3,000 per student. That ranks Kentucky among the 10 states with the largest higher education spending cuts in the country over that time period, according to a recent study from the Center on Budget and Policy Priorities.
"We had some (university) presidents who felt we should ask for nothing. And we had others who said, 'Geez if we don't ask for anything and it turns out there is some money we'll have no chance of getting it,'" Council President Bob King said.
The universities have responded to the cuts by raising tuition the past two years, except for the University of Louisville, which chose to not raise tuition this year.
"I think it's become too easy of a target for us as we do budgets to cut universities," Republican House Speaker Jeff Hoover said in a speech to the Kentucky Hospital Association on Friday. "The thing it always has concerned me about doing that is every time we cut university budgets, it's an opportunity - and many times a necessity but certainly an opportunity - for them to raise tuition. And when they do that, it is a tax on the middle class."
Kentucky limits how much public colleges and universities can increase tuition each year. While the Council on Postsecondary Education has approved the maximum allowable tuition increase for most institutions, it has only allowed them to make up about two-thirds of the state budget cuts, King said. One area that has suffered is upkeep of university buildings. A 2013 study found the state had $7 billion worth of construction needs, with more than half of it for maintenance and renovation across all campuses.
That's why the colleges also plan to ask the state to take out a $600 million loan to help them start fixing some buildings. The colleges have promised to match the spending, for a total of $1.2 billion. The loan would cost the taxpayers $52 million in 2020.
McDaniel, the Senate budget chairman, said the best the institutions could hope for would be for spending to remain flat for the next two years. And that's only if the legislature can agree to make changes to the state's pension system.
College administrators also want the state to borrow another $90 million for the "Bucks for Brains" program. Colleges and universities would raise a matching amount in private donations, then use the money to attract elite research professors.