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General Budget Framework Document

January 29, 2010

General Budget Framework Document
FY 2010-2011
January 29, 2010

Introduction

The formulation and promulgation of this "General Budget Framework" initiates the process for permanent budget reductions contained in the document entitled "Procedures to be Invoked for Significant Budget Reallocations and Reductions [hereinafter "Procedures Document," ] approved by the Academic Planning Committee on February 20, 1993, and referred to in the UNL Bylaws. These procedures were followed during the six previous budget reductions since 2002.

I. Nature and Amount of Reduction

The country continues to face serious economic issues as recovery from the recession of 2009 continues. Although the Nebraska economy has fared better than most states, we continue to have significant declines in the growth of state tax revenue. Last July, UNL was forced to make a $3.7 million reduction in its budget. The Nebraska Unicameral met in special session last fall to further reduce the state budget. As a result, we now need to make even more reductions for FY10 and FY11. Depending on state tax revenues, further budget reductions in this and the next biennium are possible. In order to assure an orderly process, and one that involves consultation with the broader university community, the Chancellor is initiating the UNL budget reduction procedures now under the timeframe contained herein.

In order to balance the timeframes required for implementation of the Procedures Document and the timing of Legislative and Regential approval of the amended budget for FY10 and FY11, the nature and amount of the reduction will initially be based on the results of the special legislative session in November 2009 and our best projections about further reductions that might be imposed. We do not know if there will be any increase in tuition in 2011 nor do we know the status of potential faculty and staff raises. Tuition increases and salary increases are normally not determined by the Board until its June meeting, which will be on June 11, 2010. It is also important to note that some mandatory university expenditures will increase even though there may be a decline in revenue.

Our initial budget assumptions will be adjusted throughout the legislative session if revenue projections are adjusted. While President Milliken has made Programs of Excellence funds available this year to assist the campuses in cash-flowing these reductions, we know that at a minimum we will need to reduce our permanent budget by at least $5.2 million at some point during this biennium, with additional reductions possible. Thus, as a target number, we hope to identify $5.2 million in permanent reductions this spring. Some of these reductions may or may not be possible to implement immediately.

In addition to UNL's share of any budget deficit at the System level, UNL may have its own obligations that need to be considered in determining the amount of any budget shortfall on the Lincoln campus. During the enrollment decline in 2005, many units received an assigned minus in their budgets in order to account for this decline. These budget minuses continue to restrain the budgets of most units and should be accounted for in implementing permanent reductions.