General Budget Framework Document FY 2009-2010 - Introduction

General Budget Framework Document
FY 2009-2010
Preliminary Draft
March 5, 2009

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 previous budget reductions in FY2002-2004.

I. Nature and Amount of Reduction

The country is facing the most serious economic decline since the Great Depression. We are in a time of great uncertainty. While the Nebraska economy has held up better than most states, the Revenue Forecasting Board in its most recent forecast predicted significant declines in growth of state tax revenue. It appears that no midyear budget rescission will be imposed but there is a significant possibility that the budgets ultimately adopted by the Legislature and the Board of Regents for FY2009-2010 will require that some budget reductions be implemented. In order to assure an orderly process, and one that involves consultation with the broader University community, I am initiating the UNL budget reduction procedures now under the time frame contained herein.

In order to balance the time frames required for implementation of the Procedures Document and the timing of Legislative and Regential approval of the final budget, the nature and amount of the reduction will initially be based on the FY 2009-2010 request budget adopted by the Board of Regents in June 2008, pursuant to state budgetary requirements. This request budget assumed a 2.5% salary increase as directed by the Governor. Negotiations on the unionized campuses and discussions between the faculty and administration at UNL and the Medical Center may impact that number. The request budget does not contain any increase in tuition at this point. Tuition increases are normally not determined by the Board until its June meeting, which will be June 12, 2009.

The Legislature will not likely complete its work on the state budget until May 2009. Our initial assumptions relating to the nature and amount of the budget reduction will be based on the Governor's recommended budget which were presented to the Legislature in early January. These assumptions will be adjusted throughout the legislative session as revenue projections are adjusted and as the Appropriations Committee makes its recommendations.

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. The final objective of any budget adjustment required for FY 2010 should be to fully balance UNL's expenditure to its actual revenues.

We have invited all units within the University to conserve cash during the 2008- 2009 fiscal year with the assurance that any funds saved will be re-appropriated to that unit for the 2009-2010 fiscal year. Permanent cuts, if required for FY2010, may not be fully determined until that fiscal year has begun. Campus units that produce savings during FY2009 will thus be able to bridge any cash flow requirements until permanent cuts can be fully implemented. Decisions about cuts to be made in FY2009 in order to produce immediate savings and ease anticipated cash flow shortages will be independent of and will not affect later decisions concerning permanent cuts for FY2010.