By Kaylee Lindenmuth
Despite $17 million in budget reductions in five years, a slight uptick in enrollment, the Campus Support Fee and changes to state system tuition policies, KU is facing a budget deficit of at least $1 million after a round of planned cuts.
KU President Kenneth Hawkinson outlined the budgetary challenges in an open letter to the community on April 13. In the letter, Hawkinson highlighted the budgetary success of the university in 2018-19, while also sharing concerns for the 2019-2020 school year. The projected budget for next year, totaling $125.7 million, falls $5.2 million short from meeting expenses as it stands.
Hawkinson said that 2018-19 was the first time in nine years the budget was balanced without using reserves. He credited a combination of factors: improved enrollment, a 2.99 percent tuition increase, a 3.6 percent appropriation increase, the Campus Support fee, income from elsewhere and $2.5 million in budget reductions.
“As I have pointed out in past communications, Middle States and other governing bodies have made it clear that we must have a balanced budget, without relying on reserves, as we go into the future,” said Hawkinson. “However, various factors are coming together that will make our budget situation very difficult as we look at next year.”
Hawkinson noted a projected decrease in overall students, despite a projected increase in new students, which he attributes to a large graduating class for 2019. He added that no increases are expected for income from the Commonwealth or tuition.
“Yet, costs continue to rise,” Hawkinson said, citing a $1.5 million increase for mid-year raises and benefits. “There may be additional costs resulting from new collective bargaining contracts currently under negotiation.”
Hawkinson said that four “precautionary” actions are being taken to balance 2019-20’s budget: A hiring freeze that impacts and potentially eliminates 43 non-faculty positions, a reduction in the budget for temporary faculty, a 10 percent budget cut across the board and the cancellation of a multitude of “physical plant projects.”
“Although these actions have brought us closer to a balanced budget, we still need to identify more than $1 million in expenditure reductions or revenue enhancements for 2019-20,” Hawkinson said. “Although we are considering position eliminations as a potential budget balancing strategy, we are hoping to avoid layoffs.”
The projections, he said, are data-based, drawing from past performance without taking into account factors implemented recently “to raise retention and recruit additional students.”
“It is our expectation that these many factors may result in higher enrollment numbers than expected,” Hawkinson said. “In addition, we have numerous activities and programs in place to raise our retention and persistence rates and, if we are successful, our overall numbers will increase. I have said many times that if we can only retain three additional students per academic department, this would bring in over $1 million in tuition and fees.”
“Despite this challenging fiscal situation, I remain convinced that, working together, we will all ensure that Kutztown University remains vibrant and continues to provide the environment to make a difference in each of our student’s lives,” Hawkinson concluded.