We recently had an opportunity to sit down and talk with Morehead State University President Dr. Jay Morgan about the start of the school year, the many positives the university is experiencing and also the biggest challenges ahead.
During our interview Dr. Morgan reiterated what we all know in this region — that the university continues to find itself doing well regarding enrollment and the following of its long-term strategic plan. Morgan said the university is looking at about 10,000 total students with incoming freshman estimated at about 1,350. Morgan said the numbers are stable and fall in line what the university has projected. The fact that Morehead State has 1,350 incoming freshmen is impressive in our view given the ever increasing competition for students. On this front Morgan said retention from first to second year students is up about 5 percent. We think it speaks volumes about both the quality of the education, the culture and campus experience to be found at the university.
There are many aspects of Morehead State to be very excited about -- this includes the Space Systems and Engineering program, which has developed partnerships with NASA. This has quite literally brought students to Eastern Kentucky from across the globe. Graduates are doing well emerging from this program with a degree in hand, looking at significant job offers at good paying positions. Nursing and Education programs are always solid -- we at our papers across Eastern Kentucky have had great success hiring journalism students from Morehead State. We are certain the list goes on and on for programs at MSU that produce graduates ready to excel in the workplace. The bottom line here is there is a lot to celebrate about Morehead State. Many, many successes and we as a community can never lose sight of that.
Dr. Morgan also outlined an issue we are particularly interested in. This is the challenges at Morehead State regarding the new pension reform bill that impacts "quasi-government" agencies as well as regional public universities. This includes Morehead State, meaning the university has some bigtime decisions ahead when it comes to pensions.
We won't rehash all the facts about the newly passed pension reform law but the bottom line is this -- Morehead State and many universities like it across Kentucky face a spike from 49 cents of every dollar to 83 cents per every dollar of pension contributions next fiscal year. This translates to roughly $3.2 million in additional pension costs next year and given what we know about this system it appears that the number will continue to rise. The great flaw in this new legislation is, as far as we know, it doesn't do anything outside the system to generate new revenues i.e. tax increase aimed at fixing this problem long-term. We've said it before and will say again the key to the Kentucky pension crisis is political compromise, significant reform of the system to make it affordable and, no one likes to say it, more revenue.
Instead the new legislation gives the universities what feel like a no win option. As Morgan described it the university could buy itself out of the system and would have to go out and bond some “90 to 100 million to cover the unfunded liability only,” Morgan said. The other option in the law is to do a 27 or 30-year financing with the KERS pension system where you would finance 90 or 100 million with them. All new hires would go into a 401-k style program with the university still making a 9 percent retirement contribution.
“Or we can stay in and pay the 83 percent contribution,” Morgan said.
Does this sound like a solution to you? It doesn’t to us.
We make no recommendation on what Morehead State should do. Depending on who wins the governor's election in November the landscape on this issue could but might not change. We trust that Morehead State - and institutions across the Commonwealth -- will get it right, but we also must say today when confronted with the new pension reform law is that it presents more pain than what is really needed, which are bipartisan solutions.