Call to Order and Roll Call
The third meeting of the Budget Review Subcommittee on Education of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, October 26, 2017, at 10:00 AM, in Room 154 of the Capitol Annex. Representative James Tipton, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Stephen West, Co-Chair; Representatives James Tipton, Co-Chair, and Regina Huff, Co-Chair; Senators C.B. Embry Jr., Johnny Ray Turner, and Mike Wilson; Representatives George Brown Jr., Kelly Flood, David Hale, Tim Moore, Melinda Gibbons Prunty, Jody Richards, and Steve Riley.
Guests: Robert L. King, President, Council on Postsecondary Education (CPE); Dr. William Payne, Vice President for Finance and Administration, CPE; Dr. Jacqueline Korengel, Associate Vice President, Kentucky Adult Education, CPE; Sherron Jackson, CPE Staff; Travis Powell, CPE Staff; and Angela Martin, Vice President for Financial Planning, and Chief Budget Officer, University of Kentucky.
LRC Staff: Chuck Truesdell, Joe Lancaster, Jennifer Krieger, Jonathan Eakin, and Amie Elam.
Approval of Minutes
Representative Riley made a motion, seconded by Senator Wilson, to approve the minutes of the September 28, 2017, meeting. The motion carried by voice vote.
Council on Postsecondary Education (CPE)
Robert L. King, President, and Dr. William Payne, Vice President for Finance and Administration addressed university administrative considerations and the deferred maintenance status. The detailed CPE presentation included statutory relief items and asset preservation measures.
In response to a question from Chair Tipton, President King said that institutions have requested the opportunity to test the market for inclusion of private insurance companies as potential providers.
In response to a question from Senator West, Sherron Jackson, CPE staff, said the fire and tornado insurance fund is a state self-insured fund. He explained that the fund is reinsured by the Lloyd's of London. President King expressed the institutional request for flexibility through equal or better coverage at a lower price. President King further added that removing the intercept clause requirement would provide flexibility and reduce delays in the capital construction bond process. He said that outside lenders would understand this would not be guaranteed debt.
In response to a question from Representative Brown, President King said the employing institution would absorb the cost of faculty/staff tuition waivers instead of the institution providing the instruction. Ms. Angela Martin, Vice President for Financial Planning, and Chief Budget Officer, University of Kentucky, said the Government Contract Review Committee must currently review all personal service contracts. She stated that a financial impact is incurred due to delays caused by the lengthy contract approval process.
In response to a question from Representative Gibbons Prunty, Mr. Travis Powell said adopted foster children are covered under current tuition waivers. Ms. Martin also said that eliminating the cash transfer requirement from institutions to the state would allow the institutions to manage cash liquidity more efficiently.
In response to a question from Representative Richards, Ms. Martin said institution- funded capital projects have nothing to do with the state's debt capacity. She said institutions are asking for the flexibility to use their own funds to approve projects over one million dollars that do not have debt or use general funds.
In response to a question from Senator West, Ms. Martin said institutions are currently buying private general liability policies; therefore, removing the statutory requirement could allow flexibility of private insurance market access and use.
In response to a question from Chair Tipton, President King stated that universities have discussed a $10 per credit hour fee for students totaling to $300 per year for a full-time student. Mr. Jackson said that CPE relies upon the study conducted by Vanderweil Facilities Advisors (VFA). Dr. Payne said VFA updated the study in 2013 by a 17 percent inflation adjustment to address aging buildings and systems projected costs on campuses.
Kentucky Adult Education
In response to a question from Senator Wilson, Dr. Korengel said that the current year budget for adult education is $17.6 million.
In response to a question from Senator West, Dr. Korengel said that 'Pass the Promise' and other partnerships focus upon the Eastern Kentucky region. President King added that no state has progressed in adult education more than Kentucky.
In response to a question from Chair Tipton, Dr. Korengel said that the time and resources needed to move students through the GED process vary based on different student barriers. She said that the GED exam cost is $120. Dr. Korengel stated that the cut score was reduced from 150 to 145 to ensure that the test reflects true high school equivalency. She added that one-third of adult education program enrollment is incarcerated students.
There being no further business to come before the subcommittee, the meeting was adjourned at 11:46 a.m.