Murray State University has released an outline of on-going plans responding to Governor Matt Bevin's recommended budget implementing cuts across the state and a performance-based funding model.
President Dr. Robert Davies issued a letter to university faculty and staff outlining financial details, the implications of cuts over the next four years and a framework for a strategic plan. "The impact of the budget cuts the Governor has proposed is significantly more than anticipated and will affect all Murray State operations," he writes.
The financial details of the budget and university plans are as follows:
- Current FY16 state appropriations: $48,025,100
- Effective this fiscal year (2015-16): a 4.5% mid year rescission on state appropriations of approximately $2,161,100
- Effective July 1, 2016: a permanent reduction of state appropriations of 9% ($4,322,00) and a new base budget for FY17 of $43,702,900
- Effective July 1, 2017: one-third of all university budgets allocated on a "performance funding" basis. New appropriation base for FY18 will be $29,149,800 (reduced by $14,553,100). This will be placed in a performance funding pool and will to some degree be earned back based on performance metrics to be determined (for instance, the number of degrees awarded or segmented by discipline). As currently discussed, universities would be competing for a percentage of this pool.
- FY19: base allocations would be reduced again by approximately $14.5 million to be placed in the performance funding pool.
- FY20: a zero base state appropriation and 100% funding based on performance funding.
Dr. Davies writes the state appropriation budget reduction over the next 30 months includes $2.2 million in one-time funds and $4.3 million in permanent reductions for FY17 and FY 18, totaling nearly $11 million, not accounting for the decrease of $14 million for performance funding.
In addition to this scaling back, he writes university contributions to Kentucky Employees Retirement System and Kentucky Teachers' Retirement System will increase by a projected amount of $1.1 million. He adds that Federal Labor Law changes affecting exempt/non-exempt status will lead to increased labor costs, concluding that "we are in need of immediate and far-reaching measures."
While Murray State University leaders had already begun considering reductions, they did not predict the magnitude of financial cuts and the move to performance funding as the entire base appropriation, he writes, warning "It would be a mistake... to merely look at this as a 'cost cutting exercise.'"
Determined to navigate and overcome these challenges, Dr. Davies writes that his focus will be spending time in Frankfort in the weeks ahead stressing the impact of key budget issues with state leaders. With difficult decisions to come in navigating these cuts, Davies stresses maintaining the university's "core and essential values, focusing on deliberate choices that "enhance student success within the framework of our new financial constraints."