UK Reacts to State Budget

Mar 29, 2012

A spokesman for University of Kentucky President Eli Capilouto says the school is disappointed with some aspects of the final budget compromise worked out by the legislative conference committee. Jay Blanton says the administration was already bracing for a significant cut in state support, but conferees delivered a double whammy when they refused to allow the state’s flagship university to increase its debt capacity an additional $200 million dollars for campus construction.

“If you look at the university’s credit rating with credit rating agencies, it’s very good.  If you look at our debt capacity, not to get too technical but, even taking on 200 million dollars more in debt would have a pretty small and incremental change in our credit rating.  And, I think, probably most importantly, if you look at the cost of construction now and if you look at interest rates on debt now, they are both at historic lows.  It’s not going to get any cheaper.”

Blanton says the university is pleased that the committee left intact $175 million in authorization for the school to pursue a public private partnership to build new student dormitories. 

"...that will allow us to really transform our residence halls on campus for students and that will allow us really to improve the living and learning space on campus, but the rest of the budget is very tough.”

A 6.4% reduction in state funding means the school will have to cut its own budget by $20 m.  Blanton says the administration is now looking at a number of scenarios.