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An Update on University Budget Planning

Maverick Monument

Update From President Bounds

January 5, 2017

Dear Colleagues:

In November I wrote to you about Nebraska’s fiscal challenges and the steps we were taking to prepare for budget reductions. Thank you for your commitment to fiscal restraint. Times of uncertainty are not easy, but slowing our spending has been the right approach as we monitor the state’s financial situation.

As we anticipated, we are facing a cut to our budget in the current fiscal year. Today Governor Ricketts proposed a $13 million reduction in state funding to the university for 2016-17. His proposal goes to the Appropriations Committee and full Legislature for consideration.

While no cut is easy, our early prudence would help us manage this challenge. We will know more about our long-term budget planning as the legislative session goes along and policymakers craft a budget for 2017-19. That process starts with the Governor’s State of the State address next week, when he will announce his biennial budget proposals.

Given the state’s fiscal uncertainties, we likely have further challenges ahead. I have pledged to the Governor and Legislature that we will be a partner in navigating the current downturn – although we will also take every opportunity we can to advocate for fair and equitable treatment in the budget process, share stories of your good work, and remind all Nebraskans that the university is the state’s most important driver of economic growth and social well-being.

In dollars alone, our impact is $3.9 billion annually – a 6-to-1 return on Nebraskans’ investment in their university. Of course, that figure says nothing of what you do daily to provide life-saving medical care, conduct transformative research, improve the quality of life in all 93 counties, and transform the lives of tens of thousands of young people who are Nebraska’s future farmers and ranchers, teachers, nurses and entrepreneurs.

I know those stories resonate with state leaders. That’s why they have for many years supported an excellent, affordable public university. I will ask them, as they have in the past, to make choices that maintain Nebraska’s long-term momentum and competitiveness. I am confident that together we will identify responsible and forward-thinking solutions for our state.

I will write to you whenever there are new developments with our budget planning. We have also created a webpage here where we will post new information as it becomes available. Thank you for all that you do on behalf of students and our state.

Sincerely,

Hank Bounds

President, University of Nebraska

From Chancellor Christensen

Dear UNO Faculty and Staff,

As you read yesterday in an email from University of Nebraska President Hank Bounds (see below), he has announced a hiring freeze for all NU campuses on any open or currently posted positions that are funded in total or in part with state-aided funds, and are not deemed mission critical. This is due to fiscal uncertainties facing the state of Nebraska for a variety of reasons you may have read about in the media in the last few weeks.

Although there are challenges at this time, and many of the specifics of the budget are still being determined, I will continue to work with President Bounds and his staff to explore options that allow us to address our critical campus priorities.

President Bounds has also asked for units to limit travel, operations, and other purchases that are not mission critical or absolutely necessary. Moving forward in this time of uncertainty, UNO senior leadership will continue to gather and share information as it becomes available. In the meantime, holding on new positions that are not mission critical; limiting travel; and slowing down operating expenditures is critically important.

At UNO, we continue to find innovative ways to focus on being the best example of a premier metropolitan university that is student-centered, academically excellent and committed to community engagement. As long as we stay focused on our mission and serving our students, I am confident we can face these challenges head on and continue our unstoppable momentum.

Please let me add, I am proud of how hard you work every day and I thank you for all you do to support and teach our Maverick students.

Sincerely,

John E. Christensen

Chancellor, University of Nebraska at Omaha

From President Hank Bounds

November 7, 2016

Dear Colleagues,

Recently I wrote to you about our budget planning and the fiscal challenges facing the state of Nebraska. Legislators will begin developing a state budget package for 2017-18 and 2018-19, including funding for the University of Nebraska, when they convene in January.

You may have seen recent news reports about the state’s decreased revenue projections and the likelihood that state agencies will have their appropriations reduced in the current fiscal year and in the next biennium. I want to be very candid with you. While we are continuing to analyze the numbers as they evolve, there is no question that we have difficult decisions ahead. Cuts to our state funding would almost certainly impact people, programs and affordability across our campuses. When you factor in unavoidable cost increases that we will have to manage in the next biennium, like health insurance and utilities, it is clear that we cannot wait to begin exercising great fiscal restraint.

I have told the Governor and members of the Legislature that while we expect to be treated fairly and equitably, we will be a partner in navigating this downturn — as we have been historically. Following discussions with your chancellors, I have taken the following steps:

  • A university-wide hiring freeze for all positions that are funded in any part by state-aided dollars is in effect immediately. This includes positions for which searches are currently being conducted. Exemptions will be granted for positions that the respective chancellor and I agree are absolutely critical to our mission.

  • Chancellors, vice presidents and the executive directors of our university-wide institutes have been directed to move forward only on travel and purchasing that they deem absolutely necessary.

  • Chancellors are responsible for engaging their leadership teams to make sure they have a process in place for implementing budget cuts. Reduction processes, of course, must take into account our commitment to shared governance, in which we would seek faculty, staff and student input before making cuts.

I do not expect that reducing hiring and travel alone will solve the budget challenges ahead. Two facts are clear as we consider our options. One, state appropriations and tuition are the primary sources of revenue that fund our day-to-day operations. Historically, when one goes down, the other goes up. We have been fortunate that the state has invested in its university at a level that has allowed us to keep costs within reach for students and families, and we hope that will continue.

And two, like any university, we are a people-driven enterprise. More than 80 percent of our spending goes toward salaries and benefits. Any major change in our budget, therefore, necessarily impacts people and the programs in which they serve.

As we navigate this challenge, our first priority will be protecting the academic enterprise of the University of Nebraska. We will not let a temporary economic downturn damage our long-term quality, momentum and competitiveness. Rather, my goal is to use this period as an opportunity to be even more strategic and more efficient in the ways we serve students, the workforce and our state. Together with our partners at the Capitol, stakeholders across the state, and all of you, I am confident that we can identify responsible solutions that preserve the accessibility, quality and impact that Nebraskans have expected from their university for nearly 150 years.

I will continue to communicate with you regarding the budget and our plans going forward. Thank you, as always, for all that you do for the University of Nebraska.

Sincerely,

Hank Bounds

President, University of Nebraska