By Murray Evans
The Associated Press
LEXINGTON - Raises for employees, more scholarships for students and funding for program improvements are all included in a $1.392 billion budget University of Kentucky trustees approved this week.
"This budget reflects our strategic plan," university President Lee Todd said. "We have focused on faculty, staff and students, and high-priority academic programs. We will make notable gains in fiscal year 2003-04."
After hearing Todd's budget presentation Tuesday, the trustees voted unanimously to award him a $100,000 performance bonus, as called for in his contract. Todd deferred the bonus the past two years, but said he would accept it this year.
The fiscal year begins Tuesday.
For the third straight year, UK will receive less in state appropriations, Todd said. UK expects to receive $308.5 million from the state this year, which will account for about 22.2 percent of the budget. Other key revenue sources will be UK Hospital ($319 million, or 22.9 percent) and tuition and fees ($157.3 million, or 11.3 percent).
It's only the second time that the state won't be UK's biggest revenue source. The other time was last year, said Angie Martin, UK's associate vice president for planning, budget and analysis.
In March, UK trustees passed a tuition increase of about 15 percent, which should bring about $18 million in revenue.
"I'm proud of the board for going through with the tuition increase, because we had to have the resources," Todd said. "It is time for this state to look at revenue measures, so we don't have to do this again."
UK's enrollment reached an all-time high of 34,011 students last fall, which posed another financial challenge, Todd said.
"The development of the budget was a challenging task," he said. "In addition to managing a recurring state budget reduction while enrolling more students, we continue to strive to become one of America's top 20 public research universities."
To make ends meet, Todd asked each UK college to slash its 2003-04 budget by an average of 1.5 percent in general-fund supported expenses. The university also reallocated $9 million and will save $2 million by moving to a provost model of governance, Todd said.
The 2003-04 budget proposal will increase UK spending by $20 million over last year's budget, Martin said. The new budget includes a 3 percent raise for faculty and staff, to be distributed based on merit. UK also will absorb health insurance cost increases for employees. Those two steps would cost $12.4 million.
Provost Michael Nietzel said providing the raises was critical in the university's efforts to keep faculty. He said through March, about 50 faculty members had been recruited by other universities during the 2002-03 academic year.
"We regarded that as both a reflection of the quality of the faculty, but also the increased vulnerability to those offers as a result of a year in which we could not give a recurring salary increase," Nietzel said.
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Raises, scholarships part of new UK budget