Press Statement: Pension Stress Must Not Harm Student Success
Statement from Prichard Committee: Pension Stress Must Not Harm Student Success
Pension Solution Needed for Kentucky Colleges
June 19, 2019
FOR IMMEDIATE RELEASE
For more information, contact:
Brigitte Blom Ramsey, Executive Director
Lexington, KY – $222.6 million. That is the amount of funding Kentucky has cut from its public colleges and universities since 2008 – a disinvestment whose costs have been born primarily by students and families. Since 2006, public funding for postsecondary education has declined from 66% to roughly 50% of total revenue with tuition making up an increasing share.
Despite these financial challenges, Kentucky’s students and postsecondary institutions are, overall, making progress to meet the state’s education attainment goal to raise the number of Kentuckians with a postsecondary degree or credential to 60 percent by 2030. However, the state must accelerate this growth in an equitable fashion by paying particular attention to increasing attainment for low-income and African American students.
But dramatic increases in pension obligations threaten such growth and progress, particularly at our regional universities and community colleges. If not addressed immediately by the General Assembly and the Governor, the pension contribution rates at these institutions will rise from 49% of payroll costs to 83.5% on July 1 of this year – a 70% increase in a single year.
What impact will this have on our campuses? A dramatic shift of funds to cover pension costs and increasingly tough choices about budget cuts to academic programs and student supports will result. As publicly reported, the magnitude of the pension increase will impact our entire postsecondary system. For example, Eastern Kentucky and Northern Kentucky Universities face potential additional costs of $10 million, while the Kentucky Community and Technical College System faces more than $6 million in additional costs.
On top of already significantly reduced public support, the additional pension burdens will create financial pressures that could impact the affordability and quality of postsecondary education for thousands of Kentucky students.
“Education is singularly important to the Commonwealth’s economic future and quality of life. We must not erode this capacity any further,” said Brigitte Blom Ramsey, Executive Director of the Prichard Committee for Academic Excellence. “We urge the Governor and the General Assembly to come to a quick and sustainable resolution to this pressing issue without further delay.”
The Prichard Committee for Academic Excellence is an independent, nonpartisan, citizen-led organization working to improve education in Kentucky – early childhood through postsecondary.