Narrative Summary Proposed Budget Reductions and Structural Changes - FY 2002 Budget Reductions

FEBRUARY 5, 2002

University of Nebraska-Lincoln

I. Anticipated budget status UNL's share of the total budget reduction imposed by the special session of the Legislature is $5,540,964. The Board of Regents last year approved a budget for the UNL campus that included salary increases of 6.3 percent for faculty and administrators and 5 percent for other employees. The faculty increase was based on the Board's goal of improving faculty salaries, and similar increases were assumed for the coming year in order to continue progress towards the goal. The Board of Regents' budget also contained increased expenditures for essential items over which the University has little control, including health insurance, property and liability insurance costs which were affected by the events of Sept. 11, 2001, operating and maintenance for new buildings, utilities and deferred maintenance. Many of these costs continue to increase. Key initiatives identified for funding in the Regents' budget include programs of excellence, need-based scholarships and the Rural Revitalization Initiative. The Board of Regents will have little flexibility for reducing the budget for essential expenditures and it cannot be assumed the Board will be willing to withdraw from its special initiatives. UNL has also experienced additional increases in Workers Compensation, property insurance and graduate student health care costs. Assuming the Board of Regents continues to fund its budgeted initiatives, UNL will face the need to achieve an additional $2.76 million reduction over and above the $5.54 million required by legislative cuts. That makes the total to be cut from the UNL budget $8.3 million.
II. The budget reduction process The campus bylaws approved by the Board of Regents establish the "Procedures to be Invoked for Significant Budget Reallocations and Reductions." Those procedures are being followed, including broad consultation with the University community. After consultation with the Academic Senate Executive Committee and the Academic Planning Committee, the Chancellor issued a General Budget Framework Document on November 29, 2001, that included principles that would govern the reduction. The reductions proposed here will be subject to the review and recommendation of the Academic Planning Committee, which will hold hearings for the campus community. APC procedures for Phase Three of UNL's budget reduction process can be found on the Web at http://www.unl.edu/pr/chancllr/.
III. Proposed exemptions and structural changes A. Exemptions: To implement the Principles and to preserve the momentum of the University, efforts were made to exempt certain programs from these reductions. The University will remain faithful to its priorities in the process of responding to the budgetary challenges, honoring its commitments to academic excellence and service to students. The following programs did not sustain a budget reduction.
	•	Office of Admissions/recruitment
	•	Honors scholarships
	•	Need-based grants and scholarships
	•	Engineering scholarship program
	•	Honors Program
	•	Services for Students with Disabilities
	•	Multicultural Affairs
	•	Funding for diversity hiring and programming
	•	University Foundations Program
	•	Division of General Studies
	•	Programs and departments that affect campus safety, including the University Police Department and Environmental Health & Safety Programs
B. Structural Changes: Several structural changes were explored to determine whether administrative efficiencies or enhanced services could be provided. The following structural changes are recommended. Although not all of them produce budget savings, some avoid or reduce costs that would be incurred if these changes were not effectuated. Others realign or prioritize functions to permit higher priority objectives to be achieved.
1. Dean of Undergraduate Studies: The University needs to focus responsibility for those programs that affect primarily the first two years of the undergraduate experience. An Office of Undergraduate Studies with a dean will be created. Its mission will be to support and enhance the undergraduate student experience. The office will be funded by eliminating one of the three associate vice chancellors and transferring one secretarial position from the Office of Academic Affairs.
2. Graduate Studies and Research Affairs: When Merlin Lawson steps down as Dean of Graduate Studies, the Office of Graduate Studies will merge into a combined Office of Research Affairs and Graduate Studies. The Vice Chancellor of Research will carry the additional title and responsibilities of Dean of Graduate Studies.
3. International Programs: Currently there is an Interim Director of International Affairs who heads the Office of International Affairs on the city campus. The Institute of Agriculture and Natural Resources also has an Office of International Programs. Productive discussions are under way with the goal of merging these two programs into a single Office of International Affairs and the appointment of a new director of international affairs for the entire campus. This will make more efficient our use of staff expertise and give us a focal point for expanding our international programs.
4. Farm Business Association: The association is partially state-funded. It is a membership organization that provides tax advice to farmers and ranchers. State support will be withdrawn, but grant funding has been obtained to permit a three-year transition to increase its membership to the point where it can be self-supporting.
5. Coordination in the Fine Arts: The position of Assistant to the Chancellor for Fine Arts, which was designed to coordinate the various arts units on the campus will be eliminated. The Dean of the College of Fine and Performing Arts and directors of the arts units are working in a council to enhance coordination.
6. Reorganization of University Communications: The integrated marketing program has been merged into University Communications. In addition, that office has been reorganized from three departments to two.
7. Distance and Continuing Education: In response to an initiative from Central Administration, Associate Vice Chancellor Jim O'Hanlon is preparing a plan, due March 1, for the organization and administration of distance education for this campus. The plan will assist in streamlining the administration of distance and continuing education with more definite and transparent assignment of leadership responsibilities.
8. Statistics Division and Biometry: Support would be provided for the continuation of discussions about merging the Statistics Division of the Math and Statistics Department on the city campus and the Biometry Department on East campus.
9. Budget management: The budget reduction will inevitably result in dislocations of faculty positions as many units have been forced to eliminate vacant positions, particularly in faculty lines. Efficient allocation of faculty resources within a tenure system is one of the biggest challenges. In the Institute, vacant positions in faculty lines revert to the Vice Chancellor. In Academic Affairs, however, the tradition has been to retain lines in the colleges. Campus administrators are working with the deans of the colleges on a process that would facilitate movement of faculty salary dollars among the colleges on an ongoing basis.
10. Teaching and professional development: The enhancement of teaching and other professional development has been handled in a centralized manner through the Office of Professional and Organizational Development in IANR and the Teaching and Learning Center in Academic Affairs. Proposed restructuring would move responsibilities for these activities to departments and colleges, and faculty groups such as the Academy of Distinguished Teachers, the Teaching Council and the Teaching, Learning and Technology Roundtable, in order to address professional development in a discipline-specific manner. This would eliminate OPOD and TLC, except that certain unduplicated functions such as examination and course evaluation services and international teaching assistant workshops would become a function of Academic Affairs.
IV. Summary of recommended budget reductions The recommended cuts include the following changes in staffing:
	•	70 FTE positions will be removed from state funding.
Of those state-funded position reductions,
	•	17 FTE will be lay-offs;
	•	Several positions will be moved off of state funding and their continuation will be contingent on their ability to support their salaries from other sources.
Chancellor's office The Chancellor's office budget would be reduced by 7.27 percent for a savings of $322,518. The reductions in this office would include a decrease in the availability of grants to faculty to support the development of technology and extended education. Additionally, the position of Director of Integrated Marketing, an assistant curator position at the Sheldon Memorial Gallery, and one position in University Communications would be cut.
Academic Affairs The Academic Affairs budget would be reduced by 2.12 percent for a savings of $2,926,559. This includes the cuts from the colleges as well as numerous services and support divisions. As much as possible, faculty lines were preserved. However, under this proposal, the university would cut 14.76 FTE tenure-line faculty positions and 10 FTE staff positions overall. Most of the positions recommended as cuts are currently unfilled. In addition, libraries would have $190,675 less overall, including $50,000 less for new books. Summer School would have fewer course offerings, resulting primarily from more careful enforcement of minimum enrollment requirements.
Student Affairs The Student Affairs budget would be decreased by 1.97 percent for a savings of $108,385. The limited scope of the reductions in this area reflects the priority to preserve, to the greatest degree possible, UNL functions that directly affect the well-being of students and the University's ability to serve them.
Research The Research budget would be cut by 2.5 percent for a savings of $83,498. This is not a reduction of research expenditures, as most research is grant-funded, rather than state-aided. What would be eliminated is money for strategic research initiatives. The position of superintendent for the Trailside Museum at Fort Robinson State Park would be eliminated, but this would not result in closing the museum.
IANR The Institute of Agriculture and Natural Resources would reduce its overall budget by 2.11 percent, or $1.46 million. The proposed cuts are spread across the teaching, research and extension missions of the Institute. Under this proposal, the Institute would cut 6.6 FTE tenure-line faculty positions and 14 FTE staff positions overall.
Business and Finance The Business and Finance budget would be reduced by 2.5 percent for a savings of $635,944. Some of the savings come from the realignment of administrative staffing. The proposal cuts 12.5 positions. Campus Units will be required to utilize electronic processes.
V. Recommended Salary Increase For the University of Nebraska-Lincoln to implement the currently budgeted salary increase of 6.3 percent for faculty and administration and 5 percent for other classes of employees would require an additional budget reduction of $2,766,603 in excess of those listed in this document. To do so would seriously jeopardize the quality of the University and its ability to move forward. Accordingly, it is recommended that the salary increase for 2002-2003 be the figure that would avoid any additional reductions in the base budget. At this point that is estimated to be a 4.8 percent increase across all classes of employees.