Before the 2016 legislative session, an analysis by the Council on Postsecondary Education confirmed NKU was underfunded by $10.7 million per year. The CPE requested funding to level the playing field for schools like NKU.
In 2016, NKU was appropriated an additional $5.1 million in annual funding – half of the acknowledged disparity— to begin to address its historic underfunding.
That was a big step forward, but it was only one step.
With our public pension challenges and the prospect of even more state budget cuts, NKU can no longer survive on the unfair funding it has received for a generation.
With our public pension challenges, and the prospect of additional state budget cuts, we can no longer afford the inequitable funding we’ve received for a generation.
Since 2008, NKU’s payment to the state pension system has increased from $2.6 million to $18.3 million. Without signiﬁcant pension reform, our payment to the state pension system will increase to $31 million next ﬁscal year. This will consume 60% of the dollars Frankfort appropriates for us.
CPE has requested in their budget relief to institutions to cover these pension increases. Given the amount the increase would have on our campus, that support is critical.
Additionally, systemic changes are needed to build long-term sustainability and ﬁnancial health for NKU. We propose any reform package include our ability to place new hires into our defined contribution plan already in use by faculty and senior staff, and to give opportunity for employees currently in KERS the ability to transfer to our defined contribution system.
Over the past two years, more progress has been made in Frankfort on NKU’s behalf than ever before in our 50-year history. We have ﬁnally ended the political funding of institutions by moving to a performance based funding model that will eventually change the way Kentucky funds higher education. And we are on the doorstep of ﬁnally ending NKU’s underfunding compared to our peers.
For now, the historic underfunding faced by Kentucky institutions like NKU and Western Kentucky University remain. Unless addressed prior to full implementation of the new model, signiﬁcant disruption is possible
the other half of the funding disparity affecting Northern Kentucky University.
Provide pension relief
by appropriating dollars to cover contribution increases.
Reform the pension system
to allow NKU to place all new hires into a defined contribution system, and give existing KERS employees the ability to opt-out and enroll in NKU's defined contribution system.