The uncertainty regarding future pension contributions for Kentucky’s five major public universities is creating budgeting challenges. Kentucky lawmakers could still be called to Frankfort to enact pension reforms before July, the start of the new fiscal year.
But if a legislative remedy isn’t forthcoming before the end of the month, Eastern Kentucky University Vice President David McFaddin said difficult decisions would likely come later this year. “No doubt, without a solution to this pension crisis, there will have to be a reduction in services for campus, and so those reductions in services and likely personnel are decisions we’d have to look at, post- July 1,” said McFaddin.
McFaddin said until students return in August, it’s not clear how tuition revenue will affect budget decisions. The Eastern administrator says the best scenario would be for the governor and lawmakers to reach a compromise position on pension policies. He said ideally that would include a pension contribution rate freeze for a year.
The Murray State Board of Regents approved its budget last week which includes a contingency plan to tap into reserves to pay for pension costs if need be.
Here is a statement from Northern Kentucky University. “NKU has passed a budget for next year that assumes our pension liability remains the same. We remain hopeful that the legislature and Governor will work to find a solution that gives institutions realistic options to move forward.”