Investment in talent, affordable access highlight University of Nebraska’s proposed 2011-12 operating budget
University of Nebraska President James B. Milliken today announced details of the university’s proposed 2011-12 operating budget, which the Board of Regents will consider on June 17. Milliken said the budget represents a strategic investment in talent and a commitment to affordable access at a time when higher education is increasingly recognized as a key ingredient in economic competitiveness.

“The operating budget I am proposing for the university will advance the Board of Regents’ priorities and position the university to continue to serve the people of Nebraska well,” Milliken said. He credited the Governor and Legislature for making higher education a priority in this legislative session, thus avoiding severe budget cuts that had been projected. “This budget reflects our commitment to playing a key role in growing Nebraska’s knowledge-based innovation economy. Although it still requires some difficult reallocations, it puts the university in a much stronger position than many of our peers across the country.”

The university faces a shortfall of about $6 million for 2011-12, which comes on top of approximately $70 million in reallocations implemented since 2000. Despite the budgetary challenges, Milliken said, the university has been able to continue its momentum and invest in its priorities.

“We have promised Nebraska families that we will keep higher education affordable and accessible through moderate and predictable tuition increases and a strong commitment to student financial aid,” he said. “This budget continues that strategy, with a 5 percent tuition increase – keeping us well below similar universities – and an additional investment in need-based financial aid. Affordable access is key to our goal of building a higher level of educational attainment in Nebraska.”

Key elements of the proposed budget include:
  • A 2.5 percent increase in the salary pool for faculty and staff outside the faculty collective bargaining units at the University of Nebraska at Omaha and University of Nebraska at Kearney. The funds are to be distributed on the basis of merit and performance. This year’s recommended increase follows two consecutive years without general raises for faculty and staff – not a sustainable strategy if the university is to remain competitive in the global marketplace for talent, Milliken said. Already, faculty salaries at UNL and UNMC have fallen further behind their peer averages – 5.6 percent behind at UNL, and 8.3 percent behind at UNMC. In March, the Board of Regents approved collective bargaining agreements for faculty at UNO and UNK. Faculty at UNO will receive salary increases of 1.1 percent and faculty at UNK will receive 1 percent raises each of the next two years.
  • A 5 percent general increase in tuition, continuing a trend of moderate, predictable increases over the past several years. The proposed increase amounts to about $120 to $150 more per semester for most resident undergraduates carrying 15 credit hours per semester, depending on which campus they attend. However, only 42 percent of UNL, 43 percent of UNO and 29 percent of UNK full-time resident undergraduates pay the full cost of tuition; most students receive financial aid that covers at least some of their tuition costs. A 5 percent tuition increase is also proposed for the Nebraska College of Technical Agriculture in Curtis. Milliken pointed out that NU’s campuses remain an excellent value compared to their peers. Using 2010-11 figures, tuition and fees are 26 percent lower than the peer average for UNL, 12.5 percent lower for UNO and 19 percent lower for UNK.
  • Special differentiated tuition rates for the College of Business and College of Engineering at UNL. These rates, which are part of the budget recommended to the Board of Regents, add $50 per credit hour for in-state undergraduates and $147 per credit hour for non-resident undergraduates in business and engineering. Differentiated rates would be applied for graduate students in both colleges as well. (A current $40 per-credit-hour course fee for engineering students is recommended for incorporation into tuition, which means it would now be covered by financial aid such as Regents Scholarships and Collegebound Nebraska.) Even with the differential, both in-state and out-of-state undergraduate tuition in both colleges remain the lowest in the Big Ten and near the bottom of the Board of Regents-approved peer group. All Big Ten universities and all of UNL’s Board-designated peers have differential tuition rates for their business and engineering colleges. With the increase, in-state undergraduates majoring in business or engineering would pay about $3,000 more over the course of their undergraduate careers. The extra revenue – about $3 million for the College of Business and $1.9 million for the College of Engineering – would be reinvested in the colleges to hire more faculty, allow more course sections to be offered, decrease student-to-faculty ratio, provide students with greater access to needed courses and enhance student services. Any UNL student who takes a course in the business or engineering college would pay the differential rates for that course – but business and engineering majors would not pay the differential rates for courses outside of those colleges, so they likely will feel minimal impact from the increases during their freshman year, when they traditionally take a number of courses in other colleges. For example, a typical freshman in the College of Engineering takes about 6.5 credit hours in the college, so the impact during a resident student’s first year would only be about $325. Freshmen in the College of Business Administration take an average of only two credit hours in the college, so the impact for a resident student’s first year would be about $100.
  • Differentiated tuition rates for the UNMC College of Public Health also are included in the budget. Currently, resident tuition is the lowest in the college’s peer group; non-resident tuition is near the bottom. With the increases, resident students in the college would pay annual tuition of $6,480, an increase of $1,769 but still well below the peer average of $8,507. Non-residents would pay $15,300 annually, an increase of $2,597 but below the peer average of $16,633. The additional revenue, projected to be about $260,000, would be used to hire four new faculty to help meet growing demand created by rising enrollment in the college.
  • A 5 percent increase in need-based financial aid, to $10.4 million, so students with the highest financial need will not be impacted by the tuition increase. This includes the university’s tuition assistance program, Collegebound Nebraska, which guarantees that a typical Nebraska student from a family of four with one in college and an income of about $53,000 or less will pay no tuition at NU. Students covered by Collegebound Nebraska also will not be affected by the new differentiated tuition rates. This year, some 6,200 students qualified for Collegebound Nebraska funding and more than 1,400 received support from the Susan T. Buffett Foundation, which provides scholarships to students at Nebraska public universities and state and community colleges. Beyond the $10.4 million investment, the state has appropriated an additional $1.25 million for financial aid this year, of which NU students can expect to receive nearly $500,000. UNL, UNO and UNK also have matched funds allocated to the campuses by Milliken for an additional one-time investment of $1.1 million for financial aid.
  • A $1 million investment in Programs of Excellence, which are high-priority academic areas across the university. For example, Programs of Excellence funds invested in UNL’s Water Initiative helped lay the groundwork for a $50 million gift last year to establish the Robert B. Daugherty Water for Food Institute, and funds invested by UNO in the Nebraska University Consortium for Information Assurance has strengthened the faculty and resulted in about $18 million in external research funding.
Milliken noted that in light of the difficult budget environment, the Legislature repealed the requirement that the university commit 1 percent of its capital construction budget to deferred maintenance. Milliken expressed appreciation for that assistance, since it will require the university to make fewer cuts to jobs and programs.

“But budgeting for routine maintenance and upgrades is essential,” Milliken said. “The fact is that the campuses routinely invest far more than 1 percent in this activity, as would any prudent organization. To demonstrate this, beginning with the coming fiscal year, the campuses will present to the Board of Regents their plans for investing in maintenance, upgrades and sustainability over the year and will provide a year-end report on actual expenditures. We believe we can satisfy both the Board and the Legislature that we are taking seriously the obligation to maintain state assets.”

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