Board of Trustees Finance Committee Email

 

From the desk of Jim Ramsey
 
June 2, 2016

Friends,
Today the Finance Committee of the Board of Trustees deferred action on the university’s $548.3 million 2016-17 general fund budget requesting that the administration explore a budget with no tuition increases yet leaving all of the other expenditures presented to them in place.

A 5 percent tuition rate increase for the 2016-17 year was included in our presentation this afternoon. With a state budget cut of $6.26 million, it becomes very difficult to build a budget for the coming year without a tuition increase. Every other state institution in Kentucky has been required to increase their tuition by about the same percentage. However, our tuition increase was coupled with a new rebate program – Credit for Credits – that would offer undergraduate students who complete 30 hours in one academic year a $400 credit on their next year’s tuition. This would incent students to advance toward their degree more quickly and efficiently and would also boost our retention and graduation rates. A win for everyone.

Three strategic goals set the framework for development of the budget presented today. We must continue our focus on student success; continue to invest in our people – our faculty and staff; and we must increase funding for strategic program initiatives as identified in the University of the 21st Century.

The commitment to investment in our people was reflected in the budget proposal presented today through:

  • A 2 percent merit-based salary adjustment pool for faculty and staff. Board of Trustee appointed administrators making more than $150,000 per year will not receive a raise
  • A Phase I commitment of $2.4 million to address faculty and staff pay equity issues in response to a recent study that showed many UofL employees are paid at or below the median salary for comparable duties at other universities
  • $100,000 to ensure UofL’s lowest-paid employees are making a living wage
  • Continued central funding for promotions and tenure of faculty and staff
  • Increased funding for strategic program initiatives identified in the University of the 21st Century Initiative
  • A new program, Credit for Credits, that will return $400 per year to eligible students completing at least 30 hours each academic year toward their degree
  • A 5 percent increase in student financial aid
  • An additional $500,000 reallocated from the president’s and provost’s office budgets and designated for student need-based aid

The budget proposed today was able to offset rising costs, as well as the state’s $6.26 million budget cut to the university, without general fund cuts to unit budgets and with no university wide lay-offs. Instead, the university has funded the improvements through effective fiscal management and innovative programs that earn money to support the academic enterprise.

The Voluntary Separation Incentive Program implemented in 2013 is saving the university $500,000 in the coming year. Renegotiated finance rates on debt service will save $409,000. The university’s favorable health care and prescription drug provider discounts and a culture of employee wellness promoted through the university’s Get Healthy Now! program helped trim another $500,000 from the university’s self-insurance payor. Administrative savings in certain units are generating $500,000.

The university is also developing more processes to position the university for future success as outlined in the University of the 21st Century. Those efforts include:
  • Identification of a new budget model for the university
  • The creation of an anticipated $50 million investment fund to be derived from:
    • Philanthropic efforts
    • New revenue, primarily in strategic enrollment growth
    • Strategic reallocation
    • Continued realization of efficiencies
These are creative programs that have benefited the university. But we know the costs associated with higher education will continue to climb. We must continue to look for ways to be more effective, more efficient and more creative while striving to provide the best academic experience for our students. I know that we have the faculty, staff and administration to do that.

Creating an annual budget to present to our board takes many months of work and input by every unit in our institution. I want to thank our employees as well as students for the feedback, suggestions and attendance at the many forums and committee meetings used to fashion this budget. It was a lot of hard work by a lot of dedicated people.

We’re confident that we’ll get to an approved budget in the very near future. Thanks for all that you do for the University of Louisville.

President James Ramsey

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