June 19, 2020
Dear UNL Faculty and Staff:
Today, the University of Nebraska system will share its budget with the Board of Regents in preparation for review by the board on June 26. As President Carter noted in his email this morning, “Our (system) budget proposal reflects the very real challenges before us. It also charts a multi-year path forward for addressing those challenges and laying the groundwork for long-term growth and success.”
We have all seen and lived the headlines on the impact of the COVID-19 pandemic throughout the spring. Very few have escaped personal impacts as businesses and other institutions have dealt with the deep and widespread financial and social impacts caused by loss of revenue and/or production. We know that this is a difficult and uncertain time for our society.
The university is experiencing revenue losses as well, and we project that there will be continued significant financial impacts to UNL in the next fiscal year ahead, beginning on July 1, and the following two years of the next biennium state budget cycle. We began assessing and predicting the financial ramifications of COVID-19 in early April and have worked over the past two months in planning for various potential reduction scenarios in the University’s state-aided budget (state appropriations plus net tuition revenue) ranging from 5% to 10%.
As noted in the email earlier today, the university system faces a projected $43 million state-aided shortfall over the next three fiscal years. Within that total, we project a budget revenue decline for UNL of $25.8 million over these three years, or 5.5% lower than our current FY’20 budget. As Nebraska’s flagship campus with a national and global student body, our students and institution have been more deeply impacted by COVID-19.
For UNL, we must also address a carryforward shortfall resulting from less-than-projected enrollments, particularly for international students, and record graduating classes the last two years. When added together with the projected future losses due to COVID-19, the total shortfall for UNL over the next three years is $38 million, or 8.2% of our current $465 million state-aided budget.
The previously appointed COVID-19 Budget Advisory Committee has been working diligently to examine possible university-wide reductions as a starting point to offset the total shortfall. In parallel, all units across UNL have been planning against the possible contingency scenarios and have submitted their proposals for how we can effectively address balancing our budget strategically and transformationally as we move through this challenging time.
As we move forward with our plans to balance our upcoming budgets, we will be holding town hall meetings with faculty and staff in July to discuss the framework of our budget and the process we will be following to evaluate budget reduction proposals and to give you an opportunity to ask questions. Beginning in the academic year in August, we will evaluate the proposed framework for budget reductions and move those discussions through our established and carefully defined shared governance process.
As noted in the email earlier today, there are a few tools already adopted or in the works to help the institution and units in this process. We have already established a hiring freeze. Merit pay increases were eliminated for FY’21, but the proposed budget cautiously plans for increases in FY’22 and FY’23 for all faculty and staff.
- The university system has instituted a Voluntary FTE Reduction program for staff who may wish to voluntarily reduce their hours and salary up to a .75 level, while maintaining full benefits. Employees have until September 1 to request this voluntary reduction.
- The system is also asking the Board of Regents to consider approving targeted furlough authority, which is primarily meant for use by auxiliary units which are revenue based.
- NU Credits of $63 per month will be eliminated for employees with base salaries of over $130,000 and for any employees hired after July 1.
While managing this level of reductions will not be easy and will require hard decisions and implementation, UNL stands in a considerably stronger position than many of our colleagues in other institutions of higher education which are facing much more severe budget impacts. Our continued relatively good position will rest on several things, including strong and robust enrollment. We have been decidedly conservative in our projections for enrollment this coming academic year, particularly given the expected declines in international students coming to the U.S. It is incumbent on all of us to facilitate, in every way possible, our student body being able to pursue the transformative power of a UNL education in this challenging time. I know that this is occurring across every academic college and unit. Thank you for your commitment.
As we work to carefully balance our budget, we must never lose sight of our core missions of the highest quality education, world-leading research and discovery, and engagement with the people of Nebraska. I ask all of you to be sharply focused and committed to UNL’s standard of excellence. Knowing our university community, as I am blessed to experience daily, I am confident that even amidst the far-reaching and universal challenges of this global pandemic, we will continue to do amazing things and emerge as a never stronger or more impactful people’s University of Nebraska.
Ronnie D. Green, Ph.D.