Northern Kentucky University is once again facing a tough road ahead regarding its budget.
While NKU is projecting a positive surplus for fiscal year 2026, the fiscal year 2027 draft budget projects a $1.9 million deficit due to declining enrollment, potentially lower-than-anticipated state appropriations and planned raises.
The lower-than-anticipated state appropriations come from House Bill 500 (the state’s budget bill), which poses $5 million in funding cuts to the university in 2027 and $8 million in 2028.
“It is a lot to digest after we have worked so hard, come so far, and made so many previous cuts to balance our budget and address many issues,” said NKU President Cady Short-Thompson on Wednesday. “So, NKU will once again prepare for these contingencies.”
Short-Thompson spoke at the NKU Board of Regents meeting on March 4, where the university gave an update on its budget, Spring enrollment and legislative matters.
The anticipated budget deficit for FY2027 follows the university’s announcement in June 2025 that it would finish FY2025 with positive cash flow for the first time in five years and only the third time in 11 years. That operating budget passed by the board consisted of projected revenues of $221,492,003 and expenses of $221,420,592, for a net surplus of $71,411.
Short-Thompson said in the current bill, Kentucky’s higher education funding is down 16% from the last biennium. NKU’s cut alone is 6% of the general fund in 2027 and 10% more in 2028.
The university requested a $5 million base increase in funding to be closer to what similar universities in Kentucky receive, but Short-Thompson said NKU’s base is projected to be cut. In addition, she said NKU’s asset preservation figures are projected at $17 million for the biennium (two-year budget period), which is a reduction of $29 million from its $46 million for asset preservation this biennium. Those funds are what the university uses to repair and replace roofs, HVAC systems and other building necessities.
In addition to reduced asset preservation funding, there’s currently no state funding available to renovate NKU’s first priority for capital funding: the Business Academic Center building.
“This campus needs to understand that this is an inflection point, not a crisis,” Short-Thompson said. “We will not panic, but we absolutely must prepare.”
As NKU manages its finances, Short-Thompson said it will elect to stop doing things that aren’t working as well as it had envisioned or as well as they once did.
For example, after 25 years of in-person offerings at the NKU Grant County campus, the university elected to close that location. She said that the COVID-19 pandemic had a negative impact on that location, and it has had zero students for the last two years.
Another example she gave is that NKU’s East Village residence hall properties are not meeting the needs the university once believed they would. In the coming months, she said they anticipate closing the two halls and are working to hire a representative to help re-envision the East Village residence halls, the property on U.S. 27 and Nunn and other economic development opportunities at the university.
“We need to rethink some of our university’s future strategies in the short, medium and long term, we cannot simply survive from one biennium to the next,” Short-Thompson said. “These are not passing storms. They are structural changes having a dramatic impact on us, on our budgets, our climate and our future.”
Short-Thompson said she is also spending more time with supporters, friends and partners of NKU, working with them to find more opportunities to increase their investment in the university.
NKU Chief Strategic Enrollment Management Officer Ryan Padgett gave an update on Wednesday regarding the preliminary Spring enrollment numbers, which are down. He compared day-to-day changes in NKU enrollment from the spring of last year to the spring of this year.
Padgett outlined three takeaways: the university’s total headcount for FTE, or full-time equivalency students, for day-to-day is currently down; the largest decline NKU is seeing right now is in online graduate students; and law enrollment is significantly up.
The following table shows the overall decline in full-time students and headcount, including every single student from full-time students, graduate students and students who come in to take one class. It also shows increases in law enrollment and trends in one-year and four-year enrollment.
NKU Vice President for Administration and Finance and Chief Financial Officer Chris Calvert gave the FY2026 budget update on Wednesday. Calvert said NKU is forecasting a net surplus of about $3 million, compared to the $70,000 surplus budgeted. The FY2027 budget summary, according to Calvert, however, includes a $1.9 million deficit.
He said this is primarily due to the decreasing fall and spring enrollment, static state funding, a 3% salary increase and increasing benefit expenses.
“We’re looking at potential continued challenges on the state side, continued declining net tuition revenue,” Calvert said. “We want to continue to reward our employees, but increasing salary and wages without any adjustments does continue to put a significant pressure on our budget, and we don’t see any material relief from debt service until we get to fiscal year 2029.”
According to a table showing the projected or estimated budgets for fiscal years 2028, 2029, and 2030, the university’s budget continues to show a deficit of $ 7,283,543 in FY2028, $8,224,629 in FY2029, and $9,638,894 in FY2030.
The board of regents will meet in June to approve the budget.