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UK ADOPTS 2002-2003 OPERATING BUDGET

By Ralph Derickson

 

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In his briefing, President Todd said the major objectives of the 2002-2003 UK annual operating budget are: (1) find a way to absorb the $6 million recurring state budget cut without passing the reduction to the academic units, (2) significantly improve health plan benefits to employees, (3) give at least a modest salary supplement based on merit performance, and (4) fund program improvements. Todd said the new budget assumes no new state operating or capital funds. No major new facilities are anticipated in the new budget.

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June 11, 2002 (Lexington, Ky.) -- The University of Kentucky Board of Trustees today approved a $1.34 billion budget for fiscal year 2002-2003 that President Lee. T. Todd Jr. said is very people-oriented and supports the university's aspiration to become a top-20 public research university by the year 2020. The new operating budget increases UK spending by $35.3 million over the previous year.

The major sources of revenue for the budget are a state appropriation of $313.4 million; student fees, $139.8 million; UK Hospital revenues, $321.1 million; gifts, grants and contracts, $111.2 million; and affiliated corporations, $232 million.

The remainder comes from county appropriations, endowment income, investment income, restricted funds, auxiliary funds, and sales and services. In a budget briefing for board members and news media Monday, President Todd noted that this is the first year UK Hospital budgeted revenues will exceed the state appropriation.

Todd said UK's budget was created on the assumption the state will use the spending outlined in House Bill 1. On the "Bonds for Brains" proposal, President Todd said, "I'm confident it will be there, but I would feel even more confident if it was passed."

In his briefing, President Todd said the major objectives of the 2002-2003 UK annual operating budget are: (1) find a way to absorb the $6 million recurring state budget cut without passing the reduction to the academic units, (2) significantly improve health plan benefits to employees, (3) give at least a modest salary supplement based on merit performance, and (4) fund program improvements. Todd said the new budget assumes no new state operating or capital funds. No major new facilities are anticipated in the new budget.

UK will follow through on certain planned capital projects, Todd said, including spending $397,000 on the Koinonia House renovation, $600,000 for a Fine Arts Library/Information Science Renovation, $500,000 for an electrical project in the Singletary Center for the Arts, $1 million for classroom improvements, and $914,500 for miscellaneous renovations.

The renovation of the Koinonia House on Rose Street will provide modern rehearsal and practice studios for UK's top-rated voice music program, including the opera program headed by Everett McCorvey.

In discussing the need for UK to become more aggressive in seeking outside funding for its budget, Todd cautioned that the university "cannot wait each year in hope that the General Assembly will give us adequate funding to achieve all that we aspire to achieve. I am afraid that day is past."

Instead of "whining" about dwindling state dollars, Todd said, "We must be more creative and more entrepreneurial if we are to sustain our progress on the road to excellence."

To aid the colleges in their quest to bring in more research dollars, Todd said the budget includes $598,000 for new positions to provide more direct assistance to faculty and colleges to meet various business and administrative requirements of sponsored projects including budget development, grant management and sponsor costing policies.

"These positions will pay for themselves as they bring in research money," the president emphasized.

The president added that UK will use "working capital reserves" to make one-time expenditures in 2002-2003 that "will move the University ahead in a year when state revenues are cut back."

Todd said "enlivened creativity" in the UK budget process enabled the university to accumulate $29.1 million for certain major financial goals, including absorbing the $6 million state budget cut without reducing academic budgets.

Funds were used to implement recommendations of a Health Care Task Force to hold the line on health insurance costs for single employees and provide a substantially higher percentage of family health insurance coverage to increase life insurance; to fund a one-time faculty and staff salary supplement of 3 percent based on merit; and to fund some program improvement throughout the university.

In his budget briefing message, Todd was highly complimentary of the work of the Health Benefits Task Force he appointed during his first week in office which was headed by Thomas W. Samuel, a professor of health management in the School of Public Health and College of Health Sciences.

The new budget funds the recommendations of the task force including increasing the share of an employee's family health coverage paid for by the university from 32 to 54 percent and increasing to 73 percent the coverage of an employee plus children plan.

The president also announced a new fringe benefit for all regular UK faculty and staff, except UK Hospital employees, granting the day after Thanksgiving as an additional paid holiday.

Other program improvements funded in the new budget include:

-- A new Commission on the Status of Women office and a new Commission on Diversity office, both reporting to the president, totaling $179,000;

-- Substantial scholarship and fellowship increases, including the new Legacy Program which provides in-state tuition rates to out-of-state students who are the children of UK alums; Governor's Scholars/Governor's School for the Arts; and the Lyman T. Johnson Scholarship and Commonwealth Incentive Program;

-- A Collaborative Center for Literacy Development totaling $600,000; Instructional classroom support totaling $685,000 in the Provost area and $315,000 in the Medical Center; Research equipment maintenance of $550,000;

-- A new $300,000 Morehead/Corbin Residency;

-- A combination of $708,000 recurring and $250,000 nonrecurring funding in support of the College of Nursing clinical doctorate, the School of Public Health, the College of Pharmacy doctoral program, and programs in the Biomedical Sciences and the Center for Instructional Sciences. The Medical Center will provide additional support to these programs in the amount of $238,000;

--An additional $200 in current operating expenses for each full-time faculty member totaling $240,000 to the colleges in the Provost area, and

-- A $400,000 Provost area appropriation to fund, on a shared basis, enhancements of educational and research areas endorsed by the Futures Committee.

Acting Provost Mike Nietzel said the increase in operating expenses for the colleges will have the effect of permitting deans to fill faculty vacancies they have left unfilled in past years in order to save money to fund their operating budgets. Nietzel called this tactic "an historic budget problem that had grown in magnitude due to regular cuts into the academic programs."

Nietzel also noted the new budget adds three new faculty positions in the Gatton College of Business an Economics and two new faculty positions in the College of Communications and Information Studies.

President Todd called the new budget "one of the biggest challenges I have faced in my first year as president." He said his budget has the objective of "tearing down the 'silos' and moving toward one university."


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