Kentucky State University is requesting $290,000 in additional General Fund support in FY 2018-2019 and $290,000 in FY 2019-2020.
This request supports a number of initiatives designed to address structural problems with the University's funding. These initiatives will provide the University with the full match of the federal funds provided for Land Grant Research programs and Land Grant Extension programs as required under Section 1449 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977.
Kentucky State University is requesting $1,358,539 in additional General Fund support in FY 2018-2019 and $1,358,539 in FY 2019-2020 for projected KERS increases.
In September 2017, information from the Kentucky Retirement System (KRS), indicated that the employer contribution rate for Kentucky Employees Retirement System (KERS) personnel in non-hazardous positions is expected to increase from 49.47% in 2017-18 to 84.06% in 2018-19. The contribution rate for personnel in hazardous positions will increase from 23.70% to 41.12%.
In October, CPE staff obtained KRS projections, by way of Office of State Budget Director (OSBD) staff, showing the estimated impact of rising contribution rates on postsecondary institution pension payments. Specifically, between fiscal years 2017-18 and 2018-19, employer-paid retirement contributions at Kentucky comprehensive universities and KCTCS institutions are projected to increase in the aggregate by $47.2 million, or about 70 percent.
If the requested KERS Increase funding is authorized, it will fund increased pension costs at the institutions. These funds will be excluded from the new postsecondary education funding model.
Absent requested funding, cost increases associated with escalating KERS contribution rates are the equivalent, on average, of about a 9.7 percent budget cut for postsecondary institutions with participating KERS employees. An unfunded mandate of this magnitude will strain campus budgets and could result in higher tuition and fee charges. For this reason, the Council and institutions strongly support any funding the Governor and General Assembly can provide to offset pension cost increases and help maintain affordability and access for Kentucky citizens.
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