Staff Report
NKU President Geoffrey Mearns told the Board of Regents this week that a “combination of reduction in state appropriations, KERS (Kentucky Employees Retirement System) and other fixed cost increases and modest projected enrollment declines” would require significant budget reductions over the next year.
The recommended $217.5 million budget would mean the elimination of 68 staff and management positions and 37 faculty positions.
Mearns’ presentation to the board assumed a projected enrollment decline of 2.5 percent in fiscal year 2017 and 1.5 percent decline is fiscal year 2018. And a possible compensation increase of 3 percent in fiscal year 18.
All charts from Mearns’ PowerPoint presentation to the board
Mearns sent the following email explaining the budget to the University community:
“. . .the Board of Regents unanimously approved the University’s budget for next fiscal year. I made a detailed presentation about the financial challenges we are facing, and the Board engaged in a sober and informed discussion of my recommendations. We are very mindful of the impact that our decisions have on our faculty and staff – both professionally and personally. We are also committed to making fiscally responsible decisions that promote student success and position the institution for a vibrant future.
“The financial challenges we face are not new. In fact, each year since 2008, due to increases in pension costs and reductions in state support, we have been forced to reduce our investment in academic programs, student support services, and salaries and benefits for faculty and staff.
“NKU is not the only public institution in Kentucky facing this challenge. Kentucky has reduced state funding for public higher education every biennium since 2008. According to the Council on Postsecondary Education, even if every public institution increased tuition next year by the maximum amount permitted by the CPE, the institutions would nevertheless need to reduce their combined expenses by $65 million.
“The financial challenges that our University continues to face are primarily the result of the combined impact of another decline in state funding, and substantial, exorbitant increases in our state-mandated pension contributions. Those factors have been compounded by a modest decline in our enrollment.
“As a result, in order to address an estimated $8 million shortfall, we must reduce certain recurring expenses. For more information about the budget reduction plan, please see my presentation to the Board, which is available here.
“As we considered the various options to address this gap, we were guided by several principles, including:
“1. Maintain student access and affordability: Our tuition remains lower than many other public universities in Kentucky, and we have actually reduced the average net cost of tuition for undergraduate students over the last two years. Next year, we will invest approximately $21 million in student aid – nearly $2 million more than we did this year.
“2. Focus on the goals in our strategic plan, especially our paramount goal – student success.
“3. Make data-supported decisions: We relied on internal data and external benchmarks to inform our recommendations and to make difficult decisions.
“4. Consider advice from campus community: To develop our recommendations, we conducted open forums on campus, and we consulted with many constituents, including Staff Congress and the budget committee of the Faculty Senate. We also received input through a faculty survey and other informal processes. All of that information was considered by the leadership in the colleges and the divisions.”
