2010–2011 CAPITAL AND OPERATING BUDGET UNIVERSITY OF KENTUCKY

Operating Budget Calendar Fall: Budget development process began with collecting revenue estimates; fixed cost increases; and programmatic budget requests January 5: 2010 General Assembly convened Winter/Spring: President’s Cabinet reviewed preliminary incremental revenues and expenses and set priorities; Provost held discussions with UCAPP April 15: 2010 General Assembly adjourns without passing budget April 23: CPE sets tuition and mandatory fees parameters April 27: Board of Trustees approves tuition and mandatory fees May 29: General Assembly passes biennial budget in Extraordinary Session June 8: Board of Trustees considers recommended University budget

Where the money comes from and what it pays for Operating Budget - $2.5 Billion Undesignated General Funds Money comes from: State appropriations Tuition Investment income Service assessments Pays for: Instruction Public service Administrative support Scholarships Designated General Funds Money comes from: UK HealthCare County appropriations Mandatory fees Course and program fees Pays for: Public service Instruction

Where the money comes from and what it pays for Operating Budget - $2.5 Billion) Auxiliary Funds Money comes from: UK Athletics Housing Dining Parking Pays for: Self-supporting auxiliary units pay all their expenses and receive no taxpayer or tuition support Restricted Funds Money comes from: Research grants and contracts Endowment income Gifts Federal and state student aid Pays for: Research Scholarships Public service Fund Balance Money comes from: Savings from prior years Pays for: Capital projects Faculty start-up packages Pilot programs

UK’s Operating Budget (in billions)

Budget at a Glance Little Change – minor changes since April tuition and fees presentation Little Growth - increase of only $38.5 million (1.6 percent) over Less State Support Again – decrease of $4.4 million from and $28.6 million since December 2007 Critical Investments – General Education, “Fighting Fund”, Employee Benefits Concern About “What’s Next”

Operating Budget Revenue Change Recurring: Undesignated General Funds$ 577,073,900$ 585,952,700$ 8,878,800 Designated General Funds1,205,097,8001,210,977,3005,879,500 Auxiliary Funds125,154,500133,591,8008,437,300 Restricted Funds358,807,300368,876,30010,069,000 Non-recurring: Fund Balances164,509,100169,717,1005,208,000 Total$2,430,642,600$2,469,115,200$38,472,600

Commonwealth of Kentucky Budget (HB 1) State Support for Operations o $4.4 million (1.4%) reduction o Includes $17.2 million of federal State Fiscal Stabilization Funds (SFSF) o $3.3 million (1.0%) additional reduction o No SFSF

Kentucky State Budget Reshaped by Cut after Cut* Source: Courier Journal, June 5, 2010

State Support - net of debt service (in millions) For FY , the state replaced $21.1 million in state appropriations with federal stimulus funds. For FY , the state will replace $17.2 million in state appropriations with federal stimulus funds. $289.3 Federal Stimulus Funds

State Support - net of debt service (in millions) For FY , the state replaced $21.1 million in state appropriations with federal stimulus funds. For FY , the state will replace $17.2 million in state appropriations with federal stimulus funds. $289.3 Federal Stimulus Funds

Tuition and Mandatory Fee Revenue and Net State Support (actual in millions) State support net of debt service and mandated programs. Includes stimulus funds. *Projected

Undesignated General Funds Estimated Fixed Cost Increase - FY Personnel: Faculty Promotions/Fighting Funds$937,700 Benefits 7,281,900$8,219,600 Operating Expenses: Livestock Disease Diagnostic Center392,000 Student Financial Aid2,851,000 Implementation of General Education Curriculum 2,689,200 Utilities1,000,000 Other Operating Expenses 722,000 Total Fixed Cost Increase $15,873,800

FY Funding Sources - Operating State Appropriations (1.4% budget cut)($4,395,700) Livestock Disease Diagnostic Center392,000 Tuition Revenue14,670,900 Other Revenues (1,788,400) Total Source Increment - Operating$8,878,800

FY Funding Gap - Operating Total Fixed Costs Increases$15,873,800 Total Revenue Decreases 8,878,800 Funding Gap – Operating($6,995,000)

Operating Budget Revenue Changes Thru State Support (Excluding Earmarks) Fixed Costs and Investments (including Student Financial Aid) Tuition and Other Revenue Total Shortfall FY $ 19,595,700 $ (53,013,000) $ 33,417,300 $ - FY $ (19,817,500) $ (8,214,500) $ 9,139,300 $ (18,892,700) FY $ (6,365,400) $ (15,778,500) $ 14,805,200 $ (7,338,800) FY $ (4,395,700) $ (15,481,800) $ 12,882,500 $ (6,995,000) FY $ (3,318,500)???

Faculty and Staff  One-time Payment Recommendation  Faculty and Staff (excluding UK HealthCare):  $1,000 one-time payment for eligible faculty and staff earning less than $70,000  One-time payment will be phased-out for faculty and staff earning $70,000 or more but less than $75,000 (minimum $200)  Eligible part-time faculty and staff will receive proportionate amount

Faculty and Staff* Estimated One-Time Payment Source of Funds: Undesignated General Funds$5,450,000 Other$1,900,000 Number Number of RecipientsPercentage Cost Including Benefits Faculty 1, %$ 750,000 Staff 6,4505,97593% 6,600,000 Total 8,2206,71082%$7,350,000 *Excluding UK HealthCare

Commonwealth of Kentucky Budget (HB 1) Capital Projects – Agency Bond Authorizations Construct New Housing$30,000,000 Guaranteed Energy Savings Performance Contract$25,000,000 Upgrade Student Center Infrastructure$17,805,000 Dentistry Clinical Projects$10,990,000 Construct Data Center$40,000,000 Purchase Pollution Controls$22,600,000 Construct Building Elevator Systems$5,000,000

Capital Budget The Capital Budget includes: o 18 active projects totaling $845 million o 28 potential projects totaling $409 million All projects have legislative authorization. UK Board of Trustees will continue to review and approve capital projects prior to initiation.

2010–2011 CAPITAL AND OPERATING BUDGET UNIVERSITY OF KENTUCKY