January 15, 2002

Contact: Lynn Bretz, University Relations, (785) 864-8866.

Statement from Chancellor Hemenway on governor's fiscal year 2003 budget

"Governor Bill Graves took an important step last night to propose restorations in funding for higher education. We applaud his leadership, and we are heartened to see that, even in this very challenging fiscal environment, the governor's proposals reflect a commitment to higher education as a top priority. Ultimately, however, Governor Graves' restorations are dependent on the Legislature enacting revenue enhancements. And even if those proposed restorations are enacted, a significant shortfall for Kansas regents institutions still remains.

"Even as we acknowledge the positive and responsible steps proposed by the governor last night, we remain deeply concerned about the original FY 2003 budget submitted by the governor. If adopted, this budget will inflict serious and potentially irreversible harm upon higher education in Kansas.

"This original budget contained the largest cuts ever proposed for higher education in Kansas. These cuts, which undermine the state's long-standing commitment to postsecondary education, have the potential to set back Kansas higher education for years.

"These cuts will significantly and adversely impact Kansas students and their families.

"We need more details before we can precisely assess the full scope of the original budget and the effects of the restorations Governor Graves proposed last night. However, this much is clear: Only a part of the story has been told. The original proposal does not allocate resources for unfunded commitments and fixed costs that Kansas regents institutions cannot avoid and must finance. Examples include the cost of annualizing the midyear salary increases authorized for the current fiscal year, the cost of increased employer contributions for employee health insurance premiums and the additional costs resulting from higher employer contributions for other fringe benefits, including KPERS.

"Here is how those unfunded commitments play out at the University of Kansas. The governor's FY 2003 budget indicates the reduction for KU, including the medical center, is $9.6 million -- or 3.94 percent. The unfunded obligations at KU total an additional $5.8 million. Thus, for the University of Kansas, the governor's original FY 2003 budget actually represents a cut of $15.4 million -- or 6.3 percent. Because the same approach was taken in assembling the budgets of the other regents universities, we assume that the failure of the FY 2003 budget to account for the unfunded commitments plays out in similarly adverse ways for them.

"We look forward to working with Governor Graves and members of the Kansas Legislature to address these difficult and important issues."