February 2016 HR Division Meeting Budget Overview February 2016 HR Division Meeting

What we know – Current Budget Composition Total budget is $3.4 B “General Fund” base is $712.8M General Fund - state appropriations and tuition Intent - support our core instructional and public service missions FY2016 state appropriations - $279.6M of the $712.8M “General Fund”

State appropriations – UK’s $280M Engine

What we know – Cuts proposed Current Fiscal Year (FY 2016) Current state appropriation is $279.6M 4.5% cut in the current appropriation = $12.6M Would be through executive order Next Fiscal Year (FY 2017) 9% cut from original FY 2016 base appropriation = $25.2M $25.2 M is equivalent of a 3.5% General Fund reduction

What we know – proposed performance fund Fiscal Years 2018, 2019 & 2020 All state appropriations move to 100% performance based in 1/3 increments over three fiscal years 33% in FY 2018 66% in FY 2019 100% in FY2020

What we know – this is a long process The budget proposed is not yet finalized Kentucky Senate and House members are reviewing President Capilouto testified before the House last week The current legislative session will end April 12th

What we know – no immediate, drastic changes UK has not implemented a hiring freeze HR has not been asked to develop plans for potential cuts

What we don’t know What kind of budget decisions will be made at UK, once the budget is finalized Additional revenue? Efficiencies/cost savings? Tuition increase? Cuts to departmental budgets?

Anticipated timetable Expect state budget to be finalized by end of session, April 12th Expect UK leadership decisions shortly after that

Ways we are helping Our health plan increases have averaged 6.8% since fiscal year 2000-01. This is 3.1% below the national large employer average increase for the same period. By having our health plan perform below the national large employer average for this time period, the University has saved $39.8M.

Ways we are helping This prescription medication purchasing collaborative, lead by UK HR, has been generating substantial savings for multiple institutions since 2011

ways we are helping

Questions or feedback?