Board Approves $1.479 Billion Budget

Contact: Ralph Derickson

 

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The president’s budget message noted that personnel expenses in the new budget account for 56.3 percent of the institution’s total operating budget for the year. Instruction accounts for 18.4 percent of the institution’s expenses by function.

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Other Board of Trustees action:

Buys Lexel Building

Appoints VP for University Initiatives

Appoints VP, Facilities Management

Appoints Head of Human Resources

LEXINGTON, Ky. (June 22, 2004) -- The University of Kentucky Board of Trustees today approved a $1.479 billion UK operating budget for the fiscal year 2004-05 that UK President Lee T. Todd Jr. said “represents our continuing effort to fulfill the responsibilities we have to the people of the Commonwealth of Kentucky.”

The new budget includes a 1 percent raise for faculty and staff and avoids passing on any health insurance cost increases to employees who are enrolled in the UK HMO. The budget also provides for more student scholarships and funds program improvements aimed at investing in the university’s future.

In addition to approving the new budget, the board:

  • Named Tom Samuel, who has been serving as interim director, as the acting dean of the new College of Public Health;
  • Approved the purchase of the Lexel Corp. property at the UK Coldstream Research Campus on Newtown Pike in Lexington for $9.6 million. Lexel Imaging Systems and its 105 employees will remain in the 165,000-square-foot Coldstream property. The agreement frees 85,000 square feet in the building for use by UK research centers, private companies and firms that graduate from UK’s start-up incubator, the Advance Science and Technology Commercialization Center, and
  • Accepted a President’s Management Review Statement about Todd’s past year of performance and awarded the president the $100,000 bonus that is called for in his contract.

UK Board Chairman Steven S. Reed said the president received a “very high evaluation” by the board and “high marks for doing an outstanding job.” Referring to the president’s bonus, Reed said, “He’s earned it.”

In his budget message, Todd noted UK’s new budget reflects a state appropriation reduction of $5.5 million and a $1 million decrease in investment income.

“But we will not stand still,” Todd emphasized. “The stakes are too high and the responsibility too great to be discouraged from pursuing our objectives with all the vision and commitment and faith we can muster.”

The president pointed out that children entering school this fall as kindergarten students represent the college class of 2020 by which time UK is expected to be in the top-20 tier of public institutions of higher education. “The work we do today will determine whether we will be one of America’s top-20 universities when that moment comes,” he said.

The budget includes a tuition revenue increase totaling $24 million and, for the first time, a differential rate of tuition charged to freshmen and sophomores as compared with the tuition charged to juniors and seniors.

The revenue generated from new fees in selected programs and the new tuition rate differentials will be returned to the colleges to offset the higher instructional costs associated with these programs and to provide additional programmatic enhancements, Todd told board members.

Todd noted UK is continuing to enroll more students, including 26,260 students in the fall of 2003, an increase of more than 12 percent in five years. He said the university is expecting 4,000 first-time freshmen this fall, almost a 50 percent increase in five years.

Based on the approved tuition rates and projected enrollments of 26,700 at UK this fall, the budget includes $185.6 million in tuition and fee revenue.  

Todd also emphasized that the university was able to absorb the fiscal year 2001-02 $6 million recurring cut in state appropriations without impacting the institution’s academic programs. “As these reductions have become more severe, all primary areas have been affected,” Todd said.

The university reallocated over $9 million in the development of the fiscal year 2003-04 original budget. The new fiscal year 2004-05 budget reflects an additional $6 million internal reallocation to cover the current year’s state funds reduction on a recurring basis.

The president’s budget message noted that personnel expenses in the new budget account for 56.3 percent of the institution’s total operating budget for the year. Instruction accounts for 18.4 percent of the institution’s expenses by function.

With a 1 percent salary increase and the increase in health care costs and other benefits for its employees, the university will spend $9 million. Budget highlights include additional items relating to the goals established in UK’s Strategic Plan: The Dream and the Challenge.

-- An $8.4 million increase in the university’s scholarship budget to cover rate increases and continued support for the Governor’s Scholars and Governor’s School for the Arts scholarships program, and
-- Over $11.5 million for strategic investment in high-priority academic and research programs, recruitment and appointment of college and program leadership, and support for enrollment growth and improved retention.

For more information about the UK 2004-05 operating budget, visit www.uky.edu/OPBPA/ . For more information about the UK Strategic Plan: The Dream and the Challenge, visit www.uky.edu/Home/2003-06Strategic%20Plan/ .


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