General Budget Framework Document FY 2012 - Introduction

University of Nebraska-Lincoln
General Budget Framework
FY 2012
Presented April 6, 2011

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. Amendments and updates to these procedures are pending and considered applicable.

I. Nature and Amount of Reduction

The State of Nebraska continues to address the challenges faced by the recent recession. The projection for the current biennium is that the State faces an approximate $946 million shortfall over the two years. The Governor has recommended that the University's budget be essentially the same as it was in FY 2011 over the course of the biennium. (Actually there is a small reduction in the FY 2012 budget that is restored in FY 2013). The Appropriations Committee appears to have tentatively accepted this recommendation. The Legislature is scheduled to adopt the state budget on May 17, 2011. The Board of Regents will adopt any tuition increase, salary program, and the University's budget at its meeting on June 17, 2011. Under any reasonable assumption regarding all of these uncertainties, the University will face the need to make some budget reductions. 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.

Our initial assumptions relating to the nature and amount of the budget reduction will be based on looking at a best case scenario, one that assumes steady state revenues, a 2.5% salary program, and a modest tuition increase of 4%. Under such a projection, UNL could face up to an approximate $9.7 million reduction in FY 2012. Recognizing the harm and disruption associated with the mere announcement of a budget reduction, we are recommending at this point that we set a target of a $5 million reduction. This is a conservative projection unlikely to lead to making any recommendations for reductions that would subsequently be unnecessary.