Recently I wrote to you about our budget planning and the fiscal challenges facing the state of Nebraska. Legislators will begin developing a state budget package for 2017-18 and 2018-19, including funding for the University of Nebraska, when they convene in January.
You may have seen recent news reports about the state’s decreased revenue projections and the likelihood that state agencies will have their appropriations reduced in the current fiscal year and in the next biennium. I want to be very candid with you. While we are continuing to analyze the numbers as they evolve, there is no question that we have difficult decisions ahead. Cuts to our state funding would almost certainly impact people, programs and affordability across our campuses. When you factor in unavoidable cost increases that we will have to manage in the next biennium, like health insurance and utilities, it is clear that we cannot wait to begin exercising great fiscal restraint.
I have told the Governor and members of the Legislature that while we expect to be treated fairly and equitably, we will be a partner in navigating this downturn — as we have been historically. Following discussions with your chancellors, I have taken the following steps:
A university-wide hiring freeze for all positions that are funded in any part by state-aided dollars is in effect immediately. This includes positions for which searches are currently being conducted. Exemptions will be granted for positions that the respective chancellor and I agree are absolutely critical to our mission.
Chancellors, vice presidents and the executive directors of our university-wide institutes have been directed to move forward only on travel and purchasing that they deem absolutely necessary.
Chancellors are responsible for engaging their leadership teams to make sure they have a process in place for implementing budget cuts. Reduction processes, of course, must take into account our commitment to shared governance, in which we would seek faculty, staff and student input before making cuts.
I do not expect that reducing hiring and travel alone will solve the budget challenges ahead. Two facts are clear as we consider our options. One, state appropriations and tuition are the primary sources of revenue that fund our day-to-day operations. Historically, when one goes down, the other goes up. We have been fortunate that the state has invested in its university at a level that has allowed us to keep costs within reach for students and families, and we hope that will continue.
And two, like any university, we are a people-driven enterprise. More than 80 percent of our spending goes toward salaries and benefits. Any major change in our budget, therefore, necessarily impacts people and the programs in which they serve.
As we navigate this challenge, our first priority will be protecting the academic enterprise of the University of Nebraska. We will not let a temporary economic downturn damage our long-term quality, momentum and competitiveness. Rather, my goal is to use this period as an opportunity to be even more strategic and more efficient in the ways we serve students, the workforce and our state. Together with our partners at the Capitol, stakeholders across the state, and all of you, I am confident that we can identify responsible solutions that preserve the accessibility, quality and impact that Nebraskans have expected from their university for nearly 150 years.
I will continue to communicate with you regarding the budget and our plans going forward. Thank you, as always, for all that you do for the University of Nebraska.
Hank M. Bounds, Ph.D.
President, University of Nebraska