April 14, 2023
Dear UNL Community –
As we have noted previously, UNL is currently facing an approximately $23.2 million budget deficit, the result of a revenue shortfall over the past two academic years from lower overall enrollment and net tuition revenue.
I know that any budget reductions are difficult and often stretch existing resources. But we cannot simply cover budget shortfalls with cash reserves on a temporary basis. As responsible leaders, we must be willing to make the difficult choices of dealing directly with this budget deficit, just as we have done repeatedly since 2016 when I assumed the role of chancellor, reducing our state-aided budget by over $66 million in the past seven years.
Campus leaders have been working for several months to determine how to address this current shortfall on a permanent basis, so that it does not continue to rollover into future fiscal years. This week, based on the recommendations of leaders across our campuses, I presented the Academic Planning Committee with recommendations to achieve nearly $10.8 million in permanent reductions. They have received these recommendations and will be carefully considering them over the coming weeks. For the remaining $12.4 million existing revenue shortfall in the state-aided budget, we have carefully and conservatively modeled our revenue from enrollment over the next two fiscal years. Which, if met, will address this issue.
Broadly speaking, these current $10.8 million in budget cuts will be met by eliminating 10% of administrative salary costs, reducing operating costs, eliminating vacant faculty and staff positions, and shifting the funding for some positions to sources other than state-aided funds, including private or grant funding, where applicable. In some instances, it will require the elimination of roles that are currently filled.
Higher education as a whole is facing significant headwinds in the years ahead, and we are not immune at UNL. Budgets are expected to be challenging for the foreseeable future, with additional budget reductions anticipated in the coming biennium for the NU system’s fiscal year 2024 and 2025 budgets.
I have recently appointed and charged a UNL-wide Strategic Budget Planning Task Force to contingency plan for these further reductions. This task force will be chaired by Vice Chancellor for Business and Finance Mike Zeleny, and include the Executive Vice Chancellor, Vice Chancellor of IANR, Vice Chancellor for Research and Economic Development and all of the deans. The task force will bring forward recommendations to me by June 1 for consideration by the Academic Planning Committee beginning in the next fiscal year.
While we have been able to meet the challenge up to this point without eliminating any academic programs, the further significant budget reductions anticipated ahead will no doubt require such consideration.
The ability to minimize budget reductions ahead is dependent on our ability to improve the overall revenue derived from our total enrollment. We all must be successful in recruiting new students. We all must ensure the success and retention of our existing students. And we must always be mindful in our use of tuition discounting and balance that with our budget needs. While it’s too early to speculate on what tuition rates will be for the upcoming year, we anticipate a conversation with our Board of Regents about whether our current tuition freeze is sustainable given our rapidly escalating costs.
Nebraska’s state legislature and governor have been supportive of UNL financially over the years – recognizing the foundational and principal role that the university’s flagship plays in educating young people, being the primary engine of research discovery, enhancing economic growth and making an impact across our state. That continued support is also critical to our ongoing success.
The Academic Planning Committee will consider these $10.8 million in budget reductions over the coming weeks and will make a recommendation to me as to whether they concur with the plan. I will make an announcement prior to June 1 as to the final nature of the cuts, so they can be operationalized in the FY24 budget.
And as we continue to navigate these fiscal challenges, I will continue to keep our community updated.
Ronnie D. Green, Ph.D.