By Friday, UK will determine how a potential cut of more than $160 million in state funds will affect academic programs and tuition.

Last week, Gov. Steve Beshear asked state universities to prepare for state funding cuts as high as 12 percent for the 2008-09 fiscal year.

Beshear also announced that state agencies and public universities must prepare to reduce spending by 3 percent for the rest of the budget year, which ends June 30. The decrease will result in a cut of about $10 million for UK.

While the 3 percent cut through June is set, the Kentucky legislature will have to approve any further cuts for the 2008-10 biennium.

UK officials will gather information and discuss the university’s options before announcing how it will decrease spending, both in response to this year’s 3 percent cut and the potential 12 percent cut.

The plan must be presented by the Kentucky Council on Postsecondary Education to Beshear’s office by Friday, said UK spokesman Jay Blanton.

“A cut of that magnitude (12 percent) is almost unimaginable and would have a heavy impact on the institution’s ability to move forward,” Blanton said.

UK President Lee Todd said in a campus-wide e-mail Friday that while the cut will require “difficult choices,” he does not anticipate layoffs or a mid-year tuition increase. The $2.3 million in staff pay raises, which about one in four regular full-time UK employees began receiving Jan. 1, will not be affected by the 3 percent reduction, nor will the search for a new vice president for institutional diversity, Blanton said.

A reduced budget for the 2008-10 biennium will mean that universities throughout Kentucky will have to make budget cuts to academic programs or raise tuition, said Brad Cowgill, interim president of the Council on Postsecondary Education.

In November, the CPE set a tuition increase limit of 9 percent at UK for 2008-09. The 9 percent is a tentative figure for budget purposes; the cap will be set this spring following the 2008 legislative session, Cowgill said.

Last year, the CPE set the tuition cap at 9 percent, and UK increased tuition and mandatory fees the same amount. In 2005-06, the UK Board of Trustees approved a 12 percent increase, 3 percentage points less than the CPE cap of 15 percent.

Cowgill, who used to be Kentucky’s state budget director, said the state has “had a number of situations” involving budget deficits.

Following his 2003 inauguration, for example, former Gov. Ernie Fletcher proposed a $16.7 million one-time cut in UK’s budget to help cover a state budget deficit, which the Kentucky legislature passed.

Following the cut, UK raised tuition by 15 percent for the 2004-05 school year.

Cowgill said he does not necessarily anticipate a 12 percent cut in university budgets, but any kind of reduction will affect the goal set by the state legislature in 1997 to double the number of Kentucky citizens with bachelor’s degrees by 2020.

“We have 12 years; that’s six budget cycles,” Cowgill said. “It’s like six plays on the football field … we have to score a first down every time we get the ball.”