Governor Ernie Fletcher’s Communication Office
Governor Fletcher Proposes Lowering College Tuition Increases Through New Tobacco MSA Assessment

Press Release Date:  Tuesday, January 31, 2006  
Contact Information:  Brett Hall
Jodi Whitaker
Troy Body

Michael Goins

Proposed MSA assessment would put an additional $80 million into postsecondary education over the next two years

FRANKFORT, Ky. – Governor Ernie Fletcher today renewed his appeal to the General Assembly to reduce the rate of tuition growth for Kentucky students at public universities and community colleges using funds from the governor’s proposed cigarette assessment.

The governor’s proposed cigarette assessment would replace the Master Settlement Agreement (MSA), which distributes funds among the states based on population and other factors, not on the volume of cigarette sales, causing payments from Kentucky smokers to end up in other states.

“For far too long, the money our citizens spend on cigarettes has gone to the budget coffers of California and New York,” said Governor Fletcher.  “That money should stay at home to help us accomplish Kentucky’s goals, including affordable education for our students.”

The governor’s proposal would increase General Fund revenues by about $150 million per year, and the governor has proposed to spend $40 million per year of the new funds for higher education over the biennium.

Governor Fletcher’s renewed appeal to the General Assembly came on the heels of a new tuition policy adopted yesterday by the Council on Postsecondary Education (CPE).  The new policy establishes a maximum percentage by which institutions can raise tuition for the next two years depending on the level of financial support institutions receive from state government once the new budget is adopted.

Without the additional funds from the governor’s proposed MSA assessment, the policy permits the University of Kentucky and University of Louisville to increase tuition on average by a maximum of 15 percent, comprehensive institutions like Morehead State and Eastern Kentucky University to increase tuition on average by 12 percent, and KCTCS by 11.2 percent for the 2006–2007 school year. 

But the governor recommends that additional funds from his proposed MSA assessment be appropriated to the institutions over the next two fiscal years, so as to keep tuition increases within the lower bounds of the CPE’s tuition policy.

With the additional funds recommended by the governor from the MSA assessment, the CPE’s policy would cap tuition increases, on average at 9 percent for UK and U of L, 7.4 percent at the comprehensive institutions and 7 percent at KCTCS. 

“Education and economic development are tied together in our quest to move Kentucky forward,” Governor Fletcher said.  “Raising the number of college graduates can be accomplished if we have the funds to keep college education affordable.”

Beyond the additional funds for postsecondary education, Governor Fletcher has proposed dividing the remainder of the $150 million per year in the next budget into the following areas:

  • $45 million for small business tax cuts;
  • $25 million for public employee and teacher retirement systems;
  • $19 million for teachers for another instructional day;
  • $10 million for the agricultural development fund; and
  • Additional money for debt service for projects.