The Finance Committee of the University of Louisville Board of Trustees blocked the administration’s proposed budget, which would have increased tuition by 5 percent, the maximum amount allowed by the Kentucky Council on Postsecondary Education.
Associate Vice President of Finance Susan Howarth outlined the proposed budget to the committee and other board members present, citing yet the 16th straight cut in state funding as the reasoning for another round of tuition increases for students and a 2 percent increase in housing fees. The budget also would have increased student financial aid and did not call for layoffs of faculty and staff.
While committee chairman Ron Butt called for a motion to send the budget to the full Board of Trustees, he did not receive a second from committee members Craig Greenberg, Steve Campbell or Jonathan Blue. Greenberg called for President James Ramsey’s administration to present another budget proposal, saying “we simply can’t keep funding the entire university on the backs of students.”
“Just because we’re permitted to raise tuition doesn’t mean that we have to raise tuition,” said Greenberg. “So I would encourage the president, I would encourage his administration to come back to this board with a budget that does not raise tuition, that maintains the same level of the strategic initiatives for the students, faculty, staff and academics that were presented today, including the salary increases and including the additional financial aid. Come back to us with your recommendations about what other items at the university this board should be seriously looking at.”
Trustee and chief Ramsey defender Bob Hughes derisively called Greenberg’s remark “a good political speech” and suggested he come up with his own budget, while Butt called on the committee members to “be a resource rather than an obstacle” going forward. Butt did not know when the committee would meet again to discuss a budget, later claiming that his fellow trustees on the committee had “a private agenda that they are trying to push forward,” though adding he did not know what it could be.
“Any and everything the university does to try to move forward, they continuously put themselves as a huge… pothole in the progress of the university,” said Butt. “It just seems that they’re bent on doing nothing but holding the university back.”
The new fight over next year’s budget and possible tuition increases is another chapter in the internal dispute of the Board of Trustees, as they appear to be evenly split on the leadership of Ramsey and support for a vote of no confidence on the president, which is expected once Gov. Matt Bevin fills two vacancies on the board.
Asked if avoiding another tuition increase for students is worth the committee’s consideration, Butt says tough choices need to be made due to its state appropriations being cut again by 4.5 percent in each of the next two years.
“The state has to make tough decisions, the university has to make tough decisions,” said Butt. “And it’s either (that or) lay off staff or close a building… that does more harm to the students.”
Earlier in the meeting, Greenberg cited a story by WDRB in suggesting another possible source of money to avoid a tuition increase: a $38 million loan from the university to its nonprofit foundation, of which Ramsey also is president — a point of controversy and a role for which he receives a multi-million dollar compensation.
“Why don’t we ask for that to be repaid by the foundation and use those funds to support these initiatives and avoid a tuition increase?” asked Greenberg.
Butt attempted to explain that this was not in fact a loan, but just “float money” that the university would be paid 1 percent interest on from the foundation. Hughes also chimed in to say the Board of Trustees had approved of that move in 2014.
Campbell countered that the trustees had voted earlier this year on a cash management policy that precluded such a loan from the university to the foundation, with Greenberg responding that Butt, Hughes and members of the Ramsey administration “are masters of financial obfuscation. It seems to me that this is yet another example.”
After the meeting, Board of Trustees Chairman Larry Benz told Insider Louisville that he agreed with the members of the Finance Committee that a budget should be proposed that does not increase tuition for students again.
“As long as all we do is increase tuition to the middle-class kids and their parents, then the reality is we’re just contributing to that same cycle,” said Benz. “We need to have the difficult conversations about what are the priorities of the university’s spending and how can we be more responsible, without having to increase tuition.”