I regret that I must write to you about potentially serious budget restraints on the horizon. You are certainly aware of the downturn in the economy worldwide. We are seeing significant loss of employment in the private sector and most of our peer institutions seem to be facing mid-year cuts now, with the prospect for further reductions in budgets next year. Even private institutions are suffering because of endowment losses.
While we are not immune to these events, we are better off than many. Nebraska is one of the few states that it appears will avoid mid-year reductions. However, next year the Legislature will set the budget for the biennium starting on July 1, 2009, and we expect that the revenue available will pose real challenges. As President Milliken indicated, we would be foolish not to prepare for a budget cut next year of some substantial proportion, while hoping that it is as small as possible.
This eventuality requires that we begin immediately saving money so that if and when those reductions occur on July 1, 2009, we have enough funds at hand to provide a smooth transition and to save as many programs and jobs as possible. Although we have not yet had the opportunity to develop all of the details of a savings plan, it is clear that one place we will have to seek savings is in personnel, the costs of which account for 80% of the UNL budget. Another opportunity, consistent with our efforts toward sustainability, is to reduce our utilities budget.
As to personnel, I am implementing the following policy today for all vacant lines and new positions for which an offer of employment has not been made, whether as faculty or staff. No offer of employment may be made to a candidate for a faculty position without prior approval by the cognizant Vice Chancellor, either Senior Vice Chancellor Barbara Couture or Vice Chancellor John Owens, in consultation with the cognizant Dean. This is true for any offer, even if the position was previously approved and an active search is underway. Similarly, no offer for a staff position at UNL may be made without getting reauthorization through the appropriate administrative channels, at least up to the Director level.
Let me repeat what I said to the faculty senate earlier this week. This is not a hiring freeze. We have identified our strategic priorities and they will inform the approval process. We will continue with the searches and offers that satisfy critical needs, and we will look favorably on offers that take advantage of a unique opportunity in the academic marketplace. To apply for approval to make an offer to a faculty or staff candidate for employment at UNL, you must state in writing why the position fills a critical need at UNL or presents a unique opportunity in light of our strategic priorities.
I know this will be disappointing to many and will require some sacrifices. Let me be candid about why I hope everyone will cooperate. If we get a budget cut for next year, we will not be certain of its scope until June, just prior to its taking effect in July. This means that to cash flow any permanent cuts, we will have to make cuts across the board for 2009-2010 until we identify our permanent reductions. The funds protected by forgoing a hire will be credited to the unit for purposes of these across-the-board reductions. In other words, every unit should understand that they have a strong reason to make the careful and cautious examination of their hiring plans for this year. Decisions made to forgo hiring this year will not be regarded as permanent for next year unless that position emerges from our process as a candidate for permanent reductions - a process that will be independent of what is done this year to save funds.
I will write soon about our plans for utility savings. I am hopeful we can make progress there as well.
I admit that I have not had time to carefully craft the details of how we should move forward. We will be doing that as quickly as we can. Right now my intention is to create a situation in which units that forgo filling positions this year or those who convince us that the position is critical or is a unique opportunity to achieve our strategic priorities will not be disadvantaged by doing so.
I know the worst thing about times like this is the uncertainty of what the situation is, both on a personal and on a university level. Right now I don't have all of the answers. I will keep the campus as informed as I can. If you have questions or suggestions of what we should do, I hope you will e-mail me directly with a copy to Susan Poser. Times like these are difficult enough without rumors and misinformation. So feel free to let me know if you hear things that make you uneasy; it will help me know what issues I should address to the campus as a whole.
I regret having to implement this policy but it is far less onerous than what our peers are being asked to do around the country. We have made tremendous progress over the last several years and I am determined to keep up the momentum. If we manage this situation skillfully, we will be positioned to continue to move the university forward. Right now, I consider this new policy the best way to preserve the positions that we have at UNL; to prepare for a transition to budget reductions that we might experience in the future; and to do the least damage to ongoing programs and existing employees. Just as I can have little impact on the positive growth of the university without your help, I need your assistance now to preserve the university in a very difficult time. With your understanding and forbearance, I am certain that we can weather these difficult economic times and continue building this great university.