Another queen sacrifice from Kentucky higher education

Last week we saw Kentucky’s community college system cut nearly 200 staff and faculty.  At almost the exact time another public institution in that state wielded its own ax, as Northern Kentucky University removed 105 jobs.  That’s 68 staff and 37 faculty.

According to an Ohio source, “The cuts will bring the total number of faculty down 6 percent to 550 positions.”  Some of those positions are currently empty.  Which departments will be hardest hit is as yet unclear.

My readers will quickly anticipate two reasons for these reductions in force: enrollment and state funding declines.

Enrollment has dipped 6 percent to 14,720 over the last three years and is projected to decline another 2.5 percent next year and 1.5 percent in 2017-18. Both estimates are on the conservative side, [president] Mearns said.

This chart from Mearns’ presentation (pdf) is pretty clear, showing enrollment falling before 2007 levels:

But listen to this additional reason: pension spending, which has spiked upwards like mad.  I think this is due to underinvestment by the state and low returns.

The university’s payments into the state pension system have skyrocketed from $3.9 million in 2010 to $15.3 million this year. The projected cost for 2018 is $19.4 million [!].

Mearns, who laid out the budget situation in a presentation here, said 2 percent of NKU’s operating budget went into pension costs in 2010 and that nearly 10 percent of the budget will be dedicated to the pension fund by 2018.

“[N]early 10 percent of the budget will be dedicated to the pension fund by 2018.”  Another chart from Northern’s president:

That’s a shocking increase, especially hard when starting off during the depths of the Great Recession.  How many other institutions are experiencing this retirement funding pressure?

Bear in mind that these aren’t the first cuts to Northern.  Kentucky’s governor mandated a 4.5% cut for this academic year’s spending in April.  NKU has been reducing staff and faculty positions over the past few years, perhaps via attrition:

Students are nervous. The new tuition increase must contribute to that.  Related: the possibility of selling off the campus radio station.

Decreasing enrollment, declining state support, positions axed, rising sunk costs – this is not the trajectory any university or college wants to pursue.

Kentucky, Louisiana, Alaska, Illinois, Oklahoma, Pennsylvania… I say again: American higher education is not in a good place in 2016.

(thanks to Lee Skallerup for the pointer)