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Archive for Thursday, June 6, 2002

KU begins making cuts

Chancellor announces there’ll be no salary increases this year

June 6, 2002

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— Kansas University officials Wednesday announced a round of cuts including a salary freeze, elimination of positions and possible layoffs as the state's budget crisis worsened.

"At KU, the state's failure to fund real, ongoing costs will result in real, ongoing cuts," KU Chancellor Robert Hemenway said in a memo to university staff.

The budget problems also are reverberating statewide with tax collections running behind projections by 21 percent, or $180 million.

Gov. Bill Graves has scheduled a news conference today in which he is expected to address the problem.

Hemenway said KU's budget for the next fiscal year would be about $7.1 million short of "what it would cost simply to continue our current level of operations." That amounts to a 3 percent cut to be made up by possible layoffs and eliminating vacant positions, he said.

"Some staff could lose their present positions. If that happens, we will do what we can to shift those staff into other vacancies at KU," Hemenway said.

He also said: "In some instances, an existing activity may be phased out in whole or in part."

Hemenway provided no details on where cuts would be made, saying that would be announced soon.

But he did say there would be no salary increases this year for faculty or staff. And, he said, the situation soon could get worse.

State lawmakers last month approved $252 million in tax increases to shore up the ailing state budget, but Graves immediately said the increases in state sales, gasoline, cigarette and inheritance taxes probably would not be enough to cover expenditures for the fiscal year that starts July 1.

Just weeks after passage, it was announced that tax revenue for May was about $120 million below projections, adding to an already mounting shortfall as income tax receipts fell dramatically.

Graves' budget director Duane Goossen said the state was in danger of ending the year in the red, which would mean Graves might have to slice budgets. If that's the case, there could be even deeper cuts down the road at KU, Hemenway said.

Kansas is not alone in its fiscal problems.

Nationally, states collected 21 percent less in personal tax revenues during April when many states receive the largest monthly share of payments compared with the same period last year, according to a survey by four organizations, including the National Conference of State Legislatures.

"The revenue stream for states has changed dramatically," said William Pound, executive director for the conference. "There is a significant reduction in capital gains, interest, dividends, stock options and bonuses that fueled unprecedented revenue growth in recent years."

At KU, Hemenway asked employees to economize and increase productivity.

"The state's budget situation is so perilous that future cuts could easily be imposed upon us," he said.

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