To the Students, Faculty and Staff of the University of Nebraska:
Today I will release the University’s proposed 2020-21 operating budget, to be considered by the Board of Regents next Friday. I’d like to share details with you in advance.
In short, COVID-19 has ushered in a transformational period for higher education. Like most colleges and universities, we’re facing fiscal challenges, enrollment unpredictability, and all the uncertainties associated with a global event that has upended many of our lives.
We could allow ourselves to be paralyzed by the “fog of war.” We could wait for perfect information before making decisions. Or, we could choose a bias toward action, so that we emerge from this period with even greater strength and momentum.
The chancellors and I have chosen the latter.
Our 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 will be guided first and foremost by care for our students, taking every action to maintain the affordable, accessible, quality education that they expect and deserve from their University.
As we wrote to you previously, lost revenue and increased expenses associated with the pandemic have created a significant shortfall across the university system. Our budget plan, the consensus result of months of planning by the chancellors, myself and our leadership teams, includes $43 million in permanent spending cuts, spread over the next three years to help mitigate the pain.
Central Administration will lead with a 10 percent cut, which we have largely realized through the elimination of seven positions, four of them filled, and other reductions. Campus cuts are driven primarily by anticipated declines in nonresident and international student enrollments:
- UNL – 5.5 percent
- UNO – 3.9 percent
- UNK – 3.9 percent
- UNMC – 2.9 percent
Chancellors will lead budget reduction processes on their campuses and will communicate more information soon.
There is no question we have difficult decisions ahead. We hope to capture some savings through attrition, but given that compensation accounts for 80 percent of our spending, jobs will be impacted. Unfortunately, there will be no increase in the salary pool for non-unionized employees this year. We recognize this is not a sustainable strategy for recruiting and retaining talented faculty and staff. We plan to invest in salaries in each of the following two years so all employees, bargained or not, see a similar total increase by 2023.
Together the chancellors and I have tried to create as much flexibility as possible for campuses as they work to close their budget gaps. In particular, we have sought to create tools that can capture savings with minimal impact on students. We have stood up a voluntary FTE reduction program, for example, that allows office/service and managerial/professional employees the option to temporarily reduce their work hours and salary. Pending Board approval next week, chancellors will also have flexibility to implement furloughs and other employment measures to help retain our talented workforce through a difficult period. The policy is primarily targeted toward auxiliary units whose normal self-supporting operations have been impacted by the pandemic.
We will also eliminate the NU Credits benefit, effective July 1, for employees earning more than $130,000 and all employees hired after July 1. These decisions follow a hiring freeze and reductions in spending that have been in place since spring.
Cuts are not easy, particularly when they come on the heels of multiple round of reductions in recent years. But consider what our shortfall might be if we had not been proactive in launching strategies to avoid becoming part of the national rhetoric predicting steep declines in enrollment. Our steps include a two-year tuition freeze, reduced online tuition rates, and creation of the Nebraska Promise, a financial aid program to cover tuition for low- and middle-income students.
Applications from Nebraska students, once behind where they were a year ago, have surged by 2,500 since we announced those decisions and are now well ahead of 2019 – a signal that our messages of care and concern for the people of Nebraska is making an impact. We should all be proud that we have made affordability and accessibility our North Star during a challenging time. Now we must finish the task and get those students enrolled. I challenge each of you to add “recruiter” to your job title. Reach out and let your family and friends know we want them to be part of the University of Nebraska family.
This period affords us an opportunity to consider what our priorities are and what kind of university we want to be.
The chancellors and I have agreed to invest $20 million in the next biennium in shared priorities like student access and success, faculty salaries, diversity and inclusion, and facility renewal and repair. These are among the goals I intend to lift up in a system-wide strategic plan that I will release in August.
Our plan will be informed by thoughtful input from students, faculty and staff across the campuses, and it will align with chancellors’ existing goals.
Some may wonder why we would talk about investments in the face of a budget shortfall. We believe there is no better time to plan for the future of the University of Nebraska. And in fact there is no more important time to be laser-focused on affordable excellence for current and future students of the University of Nebraska.
Challenging as this period is, it will end – and when it does, the needs of our state and world will be as great as ever. Students, especially those historically underrepresented, will need new and innovative pathways to an affordable, outstanding college education that prioritizes their mental health support and prepares them for life and work. The economy will require many more highly skilled graduates. The world’s urgent problems will demand the best solutions drawn from university research and creative activity.
Our value proposition is remarkable and growing. Clear-eyed about the hard work ahead, the chancellors and I are excited to continue our conversations with you about what the future looks like for our University.
Thank you for all you do.
President, University of Nebraska