Kentucky postsecondary institutions are facing some of the largest increases in higher education inflation in two decades. The Higher Education Price Index (HEPI) has grown by a combined 9.6% over the past two years. Moody's is projecting that higher education institutions will continue to face high inflation through fiscal year 2023-24. To provide some sense of scale, substantial investment in higher education is needed to offset rising costs and help the Council and campus officials maintain affordability and access for Kentucky citizens.
Another cost factor, which may be unique to Kentucky, but certainly is one that will exacerbate the impact of inflation, is expected increases in state run fire and tornado insurance premiums. In mid-August, CPE staff was notified that state Fire and Tornado Insurance premiums are set to increase by 151% next year.
If authorized, the requested inflation adjustment funds will help the Council and campus officials maintain affordability and access for Kentucky students and families. Between 2008 and 2022, reductions in state support and mandated increases in employer-paid pension contributions strained campus budgets and placed upward pressure on tuition and fees. Although Council adopted tuition and fee ceilings resulted in relatively low year-over-year increases, resident undergraduate sticker prices increased steadily during this period and were sizable in aggregate. Additional base funding supporting campus operations will help institutions offset the effects of inflation, relieve strain on operating budgets, and help the Council and institutions continue to minimize tuition increases and maintain affordability and access in the upcoming biennium.
Kentucky State University seeks a $50 million allocation to construct a new state-of-the-art Health Sciences building. This new facility is imperative to replace the old Betty White building that currently houses the nursing program. The new building will provide modern classrooms, laboratories, and research spaces equipped with the latest technology, fostering an environment conducive to innovative learning and cutting-edge health programs. It will enable us to better prepare our students for careers in healthcare and related fields, ultimately serving the healthcare needs of the Commonwealth more effectively.
We firmly believe that this investment aligns with the state's goals of promoting education, fostering research and innovation, and improving healthcare services for all Kentuckians.
We appreciate your consideration of this budget request. If you require any additional information or clarification, please do not hesitate to contact us. Kentucky State University remains committed to serving the citizens of Kentucky and contributing to the state's progress and prosperity.