Investing in Strategic Priorities Through Targeted Budget Reductions

Dear Colleague,

At KU Lawrence and Edwards campuses, we’ve spent the past four years addressing a structural deficit. We’ve done really good work, and this past year we balanced our budget. Let’s take a moment to recognize this accomplishment and appreciate what we achieved together. Thank you for your contributions to this effort and for your stewardship of KU.

As you know, over the course of this past spring, our circumstances have once again changed. We are again navigating an uncertain fiscal environment because of external factors, such as disruptions to federal funding, changes in federal law, stagnant state funding, rising costs, changes in international enrollments, and a projected nationwide decline in college enrollment.
As we address these challenges at KU Lawrence and Edwards, we remain committed to building a solid long-term financial foundation and funding our strategic priorities, which include making progress on market pay and increasing wages for staff, faculty and student employees.

Please note that the across-the-board 2.5% pay increase the State of Kansas is providing to employees in agencies under the purview of the governor do not apply to KU employees. KU has received an allocation from the State that will be used to help fund wage increases pursuant to our budget plan.

The University recognizes its collective bargaining obligations to meet and confer in good faith with each of the recognized bargaining units at the University, and this message is in no way intended to suggest that the University has made decisions or implemented wage actions for FY26 for positions within a recognized bargaining unit.

Achieving Cost Savings

As we work to develop new revenue streams and invest in our priorities, we will be required to achieve savings in other areas. For FY26 and FY27, our fiscal plans will require cuts in each unit so we can re-invest funds to make progress on our strategic priorities, including market pay.

In FY27, we must reduce annual spending at KU Lawrence and Edwards by $32 million dollars. With these funds, we will address base commitments that need to be made for strategic investments, including wage increases. To reach this total, we are asking unit leaders to collectively cut $27 million in operational expenses — about 6.5% of each unit’s placeholder FY26 general fund allocation — and we will save an additional $5 million through strategic sourcing and other procurement initiatives. Later this week, unit leaders and budget officers will receive specific budget reduction targets so they can develop plans by Oct. 15 to meet their respective goals.

We will use this fall to plan and approve unit budget reduction plans, and the plans will become effective in January 2026. This means we will generate half of our required savings, $16 million, before the end of FY26. The total annual reduction of $32 million will begin July 1, 2026 for FY27 and subsequent years.

The unit budget reduction plans we all will be submitting by Oct. 15 will replace spending reduction plans we previously communicated, such as the 20% cut in travel and 5% cut in other operating expenses. Rather than centrally prescribing specific cuts, this change provides the autonomy and flexibility each unit leader needs to tailor reductions in alignment with unit goals and priorities.

At this time, we are also implementing a hiring freeze for KU Lawrence and Edwards, effective immediately. Positions fully funded on grant or sponsored projects along with student and lecturer positions that are approved by unit leadership will be exempt and recruiting efforts may continue. Academic units approved to hire faculty for FY26 may proceed once they have demonstrated the ability to absorb the projected reduction to their base budget. The hiring freeze will be lifted for units that have provided their budget reduction plan by Oct. 15. 

Making Progress with Your Help

While we have made progress in market pay for targeted job families over the past several years, including bringing all regular, Unclassified Professional Staff and University Support Staff positions up to the federal contract minimum wage, there is still much work to do. So, in this period of uncertainty and instability for higher education, we will continue to work together, in support of each other and in stewardship of KU, as we maintain the solid financial foundation which is crucial to the long-term health of our institution.

We will continue to share updates on KU’s financial health and our plans for investing in strategic priorities. We each have a role to play in strengthening KU’s financial foundation. We encourage you to submit ideas for potential savings — small or large — to Jayhawks Elevate.

Thank you for all you do for KU, for our students and for our colleagues.

Respectfully,

Jeff and Barb

Jeff DeWitt
Chief Financial Officer

Barbara A. Bichelmeyer
Provost & Executive Vice Chancellor