The University of Nebraska system would implement a three-year plan for addressing fiscal challenges brought on by COVID-19 while also laying the groundwork for long-term growth and success under a proposed budget announced today by President Ted Carter.
The proposed 2020-21 operating budget, which will be considered by the Board of Regents at its June 26 meeting, reflects the unprecedented moment that higher education is experiencing because of the pandemic, Carter said.
COVID-19 has created fiscal challenges, enrollment unpredictability and other uncertainties for colleges and universities around the country. In response, Carter and the chancellors of UNL, UNK, and UNO and UNMC have worked together to build a plan that positions the university to emerge in a position of strength.
The proposed budget prioritizes affordability and access for Nebraska students, limits spending growth to basic operations, and creates long-term opportunities to invest in campus and system-wide priorities like student success, faculty salaries, diversity and inclusion, and facility maintenance.
And while it calls for significant permanent spending cuts – $43 million over the next three years – the shortfall is well below what it would have been had the university not been proactive in launching strategies aimed at stabilizing enrollment to the greatest degree possible.
“This is a transformative time for higher education. We could be paralyzed by imperfect information, or we can choose to meet this moment and be the kind of university that will grow and prosper well into the future,” Carter said. “The chancellors and I have chosen a bias for action. There is no question the fiscal impact of the pandemic will require difficult decisions across the University of Nebraska system, and we are clear-eyed about the challenges ahead.
“At the same time, we are convinced that the value of higher education – and a University of Nebraska education in particular – is as great as it has ever been. Even as we manage the challenges before us, we’re approaching every decision with an eye toward the future. The needs of our students and the state will guide us forward.”
Key elements of the budget plan – the consensus result of months of work between the president, chancellors and their leadership teams – include:
- A two-year, across-the-board tuition freeze in the 2021-2022 and 2022-23 academic years. The state’s support helped keep tuition increases minimal in the current two-year budget cycle, including a 2.75 increase for 2020-21 that was approved by the Board last year.
With the increase, most Nebraska undergraduates will pay $6 to $7 more per credit hour. Carter thanked Gov. Pete Ricketts and members of the Legislature for their partnership in keeping education affordable for NU’s 51,000 students.
- Creation of the Nebraska Promise financial aid program, which will cover full tuition costs for Nebraska students with family incomes of $60,000 or less. The program is expected to cover 1,000 additional low- and middle-income students, creating opportunities for Nebraska’s young people and helping build a pipeline of talented future workers for the state.
- No increase in the salary pool for non-unionized faculty and staff for 2020-21. Carter noted, however, that freezing salaries will not be a sustainable strategy for recruiting and retaining talent. The budget plan includes salary increases in each of the following two years.
- $43 million in permanent state-aided spending cuts across the system, the result of lost revenue and increased expenses brought on by COVID-19. The revenue declines include a projected decline in tuition revenue from nonresident and international students.
NU’s cuts will be spread over three years to help mitigate the pain: 0.2 percent in 2020-21, 1.6 percent in 2021-22 and 2.6 percent in 2022-23. NU’s Central Administration office will take a 10 percent cut to its budget; each chancellor will lead a campus-specific budget reduction process going forward.
Cost-saving steps already taken across the university system include a hiring freeze, reduction in travel and reduced spending in the final quarter of the current fiscal year. The university has also offered office/service and managerial/professional employees the option to temporarily reduce their work hours and salary.
- A planned 2 percent annual increase in state support in the next biennium. The modest increase reflects the university’s commitment to being a good partner to the Governor, Appropriations Committee Chairman John Stinner and the Legislature as they work through fiscal challenges at the state level.
- $20 million in the next biennium to advance strategic priorities of the president and chancellors, like student access and success including greater support for underrepresented students, faculty compensation and deferred maintenance. These will be among the priorities lifted up in Carter’s five-year strategic plan, to be unveiled at the Aug. 14 Board meeting in conjunction with his formal installation as NU’s eighth president.
“Cuts are never easy, especially when we have already done extensive work to reduce our administrative spending,” Carter said. “But we also have an opportunity – to decide what we want the University of Nebraska to look like in the future, and allocate our resources accordingly.
“The chancellors and I envision a university that’s continually creating new pathways for students, that serves the needs of our state and world, that grows a competitive workforce for Nebraska. We have hard work ahead. But we have some of the smartest, most creative, most capable faculty, staff and students in the world right here at the University of Nebraska. I’m convinced we’re going to be a university that gets this right. The future holds great things for us.”
The Board will also consider the 2020-21 operating budget for the Nebraska College of Technical Agriculture at its June 26 meeting. Given its lean budget, no reductions are planned for NCTA – a signal, Carter said, of the university’s commitment to maintaining strong programs to meet the needs of Nebraska agriculture.
The Board will consider the NU system’s 2021-23 budget request to the State of Nebraska at its August meeting.
