— Kentucky’s oldest and largest public university will close, effective Aug. 11, citing the ongoing financial disputes between the university and the governor over its budget.
The university, which has about 20,000 students and staff, plans to reduce its workforce by at least 20 percent, and will be able to end its program of providing medical services in some counties as a result of a budget agreement reached by the two sides.
In July, the state announced it would give the university a $50 million tax credit to offset about $30 million in tuition and other costs.
Governor Matt Bevin has said that if his state loses the university’s tax credit, the university will have to close its doors.
He and university leaders have repeatedly expressed concerns that the state would not provide adequate resources for the university, particularly as the state’s economic situation worsened.
University President James F. Harkins and University Board of Trustees Chairman Robert C. Stipley both have said they are committed to the university as a strong institution, but have been reluctant to close the university because of financial problems.
The governor and university officials are expected to reach a deal soon on funding.
In a letter to Bevin on Thursday, the two officials said the university could close its campus in Louisville, which is in the state, and move its operations to the University of Tennessee, a neighboring university.
But the letter said the state will not grant a loan to the Tennessee university to fund its operations.
The two universities are also trying to resolve a lawsuit from the state of Kentucky over the university budget, which the governor says the university is failing to meet.
A state appeals court in Lexington ruled last year that the governor and the university failed to provide sufficient resources to the institution.
The case is scheduled to go to trial in 2018.
“The state’s unwillingness to fund a University of Louisville has become clear,” Bevin wrote in the letter.
“We will not accept this state of affairs.”
Bevin also told Bevin that the university was facing a $200 million shortfall in the fiscal year that begins in March, which would require an additional $80 million in state funding.
Kentucky Governor Matt Beshear.
“While this has not been an easy decision, we are confident that the University will survive, but the University cannot survive in a state of crisis,” Stiply wrote in a statement to the Louisville Courier-Journal.
In a statement on its website, the University said the new funding will be allocated by the university to help offset the “significant” increases in tuition, room and board, books, supplies and other expenses it will incur due to the new state funding package.
The state said it will make up for those losses by funding the university through the state tax credit.
The Kentucky government has provided a tax credit of about $60 million to the school for the past two years to cover the cost of operating and maintaining the university.