State appropriations represent approximately 31.4% of all operating and non-operating revenues. The level of state support is a key factor influencing the University's overall financial condition. State appropriation is unrestricted to revenue and is included as non-operating revenue. State appropriation is used to support payroll and benefits for University employees.
The following details the net Commonwealth appropriations received by the University for fiscal years ending June 30, 2010, 2009 and 2008.
| 2010 | 2009 | 2008 | |
| Commonwealth appropriations | $ 24,630,377 | $ 26,435,199 | $ 27,525,700 |
| Federal appropriations | 6,507,463 | 4,977,599 | 6,246,011 |
| Total appropriations | $ 31,137,840 | $ 31,412,798 | $ 33,771,711 |
The University faces financial challenges to maintain and upgrade its capital assets including its infrastructure, buildings and grounds. A combination of revenue sources funds the University's investment in capital improvements, including appropriations provided by the Commonwealth of Kentucky. In fiscal year 2010, the Commonwealth provided $1.8 million in capital appropriations to the University. State capital appropriations plus federal sources plays an important role in the University's efforts to address deferred maintenance projects.
The following table details the University's grant and contract revenue for fiscal years ended June 30, 2010, 2009 and 2008.
| 2010 | 2009 | 2008 | |
| Federal grants and contracts | $ 18,890,125 | $ 11,941,053 | $ 10,321,842 |
| State grants and contracts | 2,210,849 | 2,689,092 | 2,276,728 |
| Nongovernmental grants and contracts | 45,798 | 59,782 | 52,173 |
| Total grants and contracts | $ 21,146,772 | $ 14,689,927 | $ 12,650,743 |
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