House panel OKs bill with $23 million for Kentucky State
FRANKFORT, Ky. (AP) — Kentucky State University would receive an immediate $23 million infusion from the state, under a bill that advanced Tuesday, as lawmakers voiced support for the struggling school while venting frustration over its precarious finances.
The measure cleared the House Appropriations and Revenue Committee with bipartisan support, advancing to the full House. It still needs approval from the Senate.
Republican Rep. James Tipton, the bill’s lead sponsor, said indications are that without the extra assistance, the school “will not be financially solvent” by sometime around late March.
The appropriation would be set up as a loan that could be forgiven by the legislature, he said.
Tipton said the legislature should step up with the appropriation for the sake of current and future students at the historically Black college. But he stressed that the bill includes layers of accountability to monitor efforts to restore the school to financial stability.
“Without this, there’s going to be tremendous uncertainty, there’s going to be tremendous disruption, there’s going to be tremendous chaos,” Tipton told the committee.
“If, at some point down the road, we’re seeing that progress has not been made, this legislation has laid a plan in place that we could look at other options down the road,” he added.
Aaron Thompson, president of the Kentucky Council on Postsecondary Education, said financial oversight of KSU will delve into the “microscopic level” to keep track of recovery efforts.
In supporting the bill, Republican Rep. John Blanton said: “KSU is an institution within this commonwealth that we cannot allow to fail.” He expressed confidence in the bill’s oversight provisions as a management improvement plan for KSU is carried out.
Under the bill, KSU leaders would provide periodic updates to lawmakers in coming years on the progress of carrying out that improvement plan. And by late 2025, the postsecondary education council would provide lawmakers a three-year performance analysis of KSU.
How the university dug itself into such a deep hole was on the minds of lawmakers.
Republican Rep. Jason Petrie, the committee’s chairman, said he wondered “how in the world” the school could have amassed a $23 million shortfall.
“Yes, we don’t want to dwell on the past, but we don’t want to repeat those mistakes,” he said.
Thompson said the Frankfort-based school made some “legitimate” investments to benefit students, but said some money was spent “uselessly.”
“There has been misspending at a level over a ... two-and-a-half-year period of time that neither you nor I would spend from our bank account,” he told the committee.
KSU announced last summer that it faced a budget shortfall with a stack of unpaid bills and other debts, a ballooning payroll and several years of poorly managed spending that outpaced revenue. Gov. Andy Beshear placed the university under state oversight following the sudden resignation of the school’s president last summer. The school is searching for a permanent president.
While the focus was on KSU’s problems, Thompson said there’s “a lot right with the institution,” including rising student retention and graduation rates, and community service by students. There’s an opportunity, in shoring up KSU, to enhance its contributions to the state, he said.
The legislation is House Bill 250.