The Northern Kentucky University Board of Regents heard a presentation at their meeting Tuesday morning on the university’s budget, where a 2% tuition hike and 5.9% hike in housing and board fees were presented as proposals to facilitate a balanced budget for the university by the 2025 fiscal year. The board did not vote on these measures, but they will come before the board as proposals in June.
Karen Mefford, the university’s associate vice president for financial services, presented the most up-to-date understanding of the budget to the regents.
“Much work has been done over the past year and a half to identify cost savings,” Mefford said. “The work continues, and we’re also going to be focusing now on some revenue enhancements.”
NKU’s finances have been reeling since late 2022, when the university discovered an $18.7 million deficit in its operating budget. The university began implementing cost-cutting measures in 2023, and by June of that year, it had succeeded in reducing the deficit from its $24.2 million peak to $9.6 million. Mefford reported to the board on Tuesday that the university still needed about $2 million to close the gap.
The fee increases were proposed to bring the university closer to a balanced budget. Mefford said the university expects certain expenses to go up in conjunction with declining in-person enrollment and increasing online enrollment; enrollment figures naturally correlate to tuition revenue.
Utility costs, fire and tornado insurance costs, debt payments for university housing bonds, and general inflationary costs were expected to increase. The university is expecting about $4 million in state money to offset inflation and insurance costs, but the Kentucky Senate has yet to vote on those allocations. Other expected expenses include the expansion of athletic programs and revenue sharing for contractors associated with online learning.
“Are we doing any type of modeling that would indicate a Plan B scenario in the event that some of those numbers are not actualized?” asked regent Andrá Ward.
Mefford responded that her office had asked all departments and colleges throughout the institution to model a 2% reduction, but, she said, “we’re hoping we don’t have to use that.”
“It’s about 16 months, you all have done remarkable, heroic, unbelievable work to set us up for what looks to be a balanced budget 2025,” said Board of Regents Chair Richard Boehne.