On June 11, I will present a proposed 2010-11 budget to the Board of Regents. The agenda item is available at http://www.nebraska.edu/board. It is a budget that will continue moving us toward the achievement of goals outlined in the University's Strategic Framework while also reflecting the realities of a difficult fiscal environment in Nebraska and throughout the country. A request that I made of you a year ago—shared sacrifice and careful fiscal management—remains. We have had made significant strides this year in several key areas, however, and we intend to continue aggressively pursuing areas in which the University of Nebraska can and should be a global leader. We have made strategic investments, grown enrollment, enhanced academic programs and expanded research – this year, to record levels of external funding across the university. Our capital campaign continues to be a bright spot, with two gifts announced this spring – $50 million to fund a new Global Water for Food Institute and $20 million to fund an agricultural entrepreneurship program – as leading examples of our momentum and success, and of the desire of donors to invest in a successful university.
I believe that Nebraska and its public university remain in a relatively strong position compared to peers in our region and beyond. As we look at the magnitude of reductions at many public universities in other states, the drastic measures that some institutions have been forced to implement, and the dire financial prospects facing those hardest hit by the economic downturn, I remain optimistic. Thanks to committed leadership throughout the University, careful planning and good stewardship of our resources, we have been able to manage the budget reallocations that were required as a result of reductions in our state appropriation made by the legislature in last November's special session. We will not be able to avoid making some additional budget cuts across the University in 2010-11, and the Chancellors are developing plans to manage those reallocations.
During the past year, the University made more than $8 million in reallocations, in some cases resulting in significant reductions in FTE—both filled and unfilled positions. With nearly 80 percent of the University's state-aided budget (state appropriations and tuition) directed to salary and benefits costs, significant reductions will inevitably include some personnel reductions.
To reduce the need for program cuts and job losses, we have proposed a budget that includes no funds for salary increases for faculty or staff 2010-11. We recognize that this does little to advance the Board's goal of reaching the mid-point of each campus' peers, and that it is not sustainable if we intend to remain competitive—which we do. Nonetheless, I believe this budget is a necessary and responsible move in the short term to handle the immediate required budget shortfall as well as enable us to prepare for the uncertainties of the future. We are planning for faculty salary increases at UNK and UNO pursuant to final agreements with their collective bargaining units. The funding required for these contracts will be borne by the respective campuses, which will result in deeper budget cuts on those two campuses. Again this year, costs for building operating and maintenance will be borne by the campuses incurring them, with UNL and UNMC having the largest requirements. I believe this fairly distributes budget obligations and contributes to cost consciousness.
The 2010-11 budget includes a proposed tuition increase of 6 percent, which maintains our commitment to moderate and predictable increases. The "sticker" price for most full-time resident undergraduate students will be approximately $150 per semester, but as you will see below, many of our students will not pay that amount. Not all peer decisions on tuition have been made, but we expect our increase will again be less than the average increases of our peer groups and will keep campuses total tuition and fees well below peer averages.
We will continue to place the highest priority on affordable access. Collegebound Nebraska, our tuition assistance program – one of the most generous in the nation – promises zero tuition to most Nebraska families with an income of about $53,000 or less. We have included an increase of 6 percent in the student financial aid budget to ensure that financial aid recipients are held harmless from the proposed tuition increase. We will also provide an additional $2 million in financial aid to help those students with the greatest need. Combined with another increase in the Pell Grant this year and continued growth in the Buffett Scholarship program, significantly more funding will be dedicated to financial aid this year.
In 2009, the number of students eligible for Collegebound Nebraska funding grew from about 5,100 to nearly 6,000, while the number of Buffett Scholarship students at the University grew from about 500 to more than 900. More than one-third of our undergraduate students currently receive some need-based financial aid, while well over half pay no tuition or reduced tuition thanks to both need- and merit-based aid programs. Financial aid officers tell us they are seeing more applications this year, and greater evidence of need; we are committed to providing access to all eligible students.
In addition to the $8.5 million in reallocations already taken in 2009-10, an additional $10.1 million will be required this fiscal year. The Chancellors and I have been planning for this throughout the year, and after a budget is adopted by the Board, those plans will be implemented. There is not a lot of silver lining associated with this budget, but I continue to believe that the state of Nebraska and the University of Nebraska are in a strong position when viewed from a national perspective.
We will make some one-time investments next year in critical deferred maintenance, energy savings projects and other essential priorities, which we expect will help us save money over the longer term and provide some additional flexibility in addressing the serious challenges we expect in the next biennium. I am pleased with the realistic approach being adopted on the campuses as we prepare for the next few years, which I believe will serve us well.
A year ago, I told you that there remains a good deal of uncertainty about the economy and Nebraska's tax revenues, and that it would be a mistake to be complacent about the future. I wish that admonition had been proven wrong, but it is as true today as ever. We will continue to monitor the state's fiscal situation, and continue planning for the next biennium. And, we will continue to do our best to manage the budget in ways that advance the University's priorities, strengthen the institution and serve Nebraska.
If you have questions or comments about the budget, please let me know. I am especially interested in your suggestions for savings and efficiencies. You can write me at email@example.com. I am very grateful to you for the work you do on behalf of this great University and the people of Nebraska. Thank you.
James B. Milliken