FHSU Budget Bulletin

Jan. 14, 2009

Gov. Kathleen Sebelius talked in general terms about the Kansas economy in her State of the State address on Monday night and then released her detailed budget recommendations on Tuesday. As promised, I will give a brief analysis of her recommendations for Fiscal Year 2009 and Fiscal Year 2010 and the possible implications for Fort Hays State University.

First, though, it is important to emphasize that none of this is final. These are the first steps in a long dance.

The governor has recommended a 3-percent cut in the FY09 operating budgets for the state's public higher education system (7 public universities, 19 community colleges and 6 technical colleges), which equates to a reduction of $24.3 million. That 3 percent would be carried forward into the next year, and an additional 4-percent cut would mean a total reduction of 7 percent in FY10, which equates to a reduction of $56.3 million.

As I have explained earlier, we have some one-time money set aside to cover the anticipated reductions in the FY09 budget, which ends June 30. The exception is funding for the Kansas Academy of Mathematics and Science. The governor has recommended eliminating the $300,000 for this year that was already approved by the Legislature last session. This is disappointing because we already filled staff positions in KAMS. We have them under contract and will continue to pay them.

Gov. Sebelius has also recommended elimination of the $713,000 for KAMS that was expected to be part of the FY10 budget. She is not proposing that KAMS be eliminated. Rather, she wants to postpone it for a couple years. It does not appear that there is much legislative support for that idea. KAMS was developed by the Legislature, and it has lots of support in both the House and the Senate.

Other than KAMS, we believe we have cuts in the FY09 budget pretty well managed. The FY10 budget poses a more difficult challenge. The governor's recommendations in total would mean a 12-percent cash reduction -- about $4.3 million -- for FHSU. Because some of those cuts could be "back-filled" in the FY11 budget, the governor's recommendations might translate to an operational reduction of just 9 percent.

The governor recommended a 1-percent salary increase for state employees that would not be funded by the state. We would have to take other money from our budget to fund the salary increases, or we could choose not to implement the salary increases.

The governor also recommended a reduction to $13.7 million from the original $15 million for deferred maintenance on campuses, but the reduction in FHSU's share of that money would not be significant.

I cannot repeat too often that all of this remains speculative. We anticipate a $1 billion problem in the state by FY10. If cuts were implemented across the board, it would translate to 15 percent for all state agencies, including FHSU. The governor has recommended protecting K-12 education, which represents 51 percent of the state budget. If that happens, all other budgets would have to be cut by 30 percent. The K-12 budget has grown by about $1 billion recently, and many legislators believe that protecting K-12 would place too much of the burden on the budgets of other agencies.

I believe the Legislature will look at an alternate proposal possibly involving 4- to 5-percent cuts in the FY09 budget, and that it will consider that alternative either next week or by the following week at the latest. I don't expect the Legislature to make a final decision on the FY10 budget until late April or early May, after new economic projections have been issued.

Please watch for new Budget Bulletins as additional information comes to light, and continue to post your suggestions and questions on Budget Watch, which can be found on the home page of the FHSU Web site. I have been extremely pleased by the thoughtful input you have provided, and I will respond to your suggestions and questions when we know more.