Eastern’s budget constraints are far from over after the Kentucky Supreme Court’s recent ruling against state aid cuts imposed earlier this year by Gov. Matt Bevin. Although the decision does suggest that EKU and other state universities will receive a monetary refund, the court’s 5-2 ruling on Sept. 22 was more an act against executive overreach.
Shortly after assuming office in January 2016, Bevin issued an executive order for 4.5 percent in cuts to state higher education funding for the 2015-16 fiscal year. Because the 2015-16 budget was already underway, EKU had to cover the $3.1 million shortfall with funds from the university reserve, an account that is separate from the operating budget in the general fund.
“This [the reserve] is a contingency fund. It’s basically like a savings account,” said Kristi Middleton, university spokeswoman. “The General Assembly had already approved the 2014-2015 and 2015-2016 budgets. It [the 4.5 percent cut] would have had to have been approved by the General Assembly.”
This summer Bevin agreed to return 2.5 percent of the 4.5 percent he had cut. EKU received a refund of $1.8 million at that time. The Supreme Court’s Sept. 22 ruling says the remaining 2 percent, roughly $1.3 million, will be returned to EKU if Bevin does not appeal the ruling. The university has not received a timeline of when these funds are scheduled to be dispersed. Whenever the refund is distributed it will just be returned back to the university reserve, Middleton said.
The ruling does not affect the 4.5 percent cuts that are still in place for the 2016-17 and 2017-18 fiscal years. Unlike the executive order cuts overturned by the court, “those cuts were approved by the General Assembly last spring ,” Middleton said.
This means that EKU’s state funding will still be cut by $3.1 million in 2016-17 and another $3.1 million in 2017-18. Middleton said the university is working to adjust its operating budget to address this decrease. Several recurring budget adjustments are being considered, but nothing has been finalized at this point.
Looking to the future, Middleton noted that Bevin has also asked for performance based funding aimed to improve educational outcomes for low-income and non-traditional students. The Council on Post-Secondary Education has been assigned to develop the parameters for this initiative. Although the state has not yet determined the performance based model, it is expected to be implemented in 2018.
“Degree attainment will likely be a part of it, but it is still not final,” Middleton said.