Prudent budget proposal protects university affordability, quality

Published: May. 30, 2017 at 12:17 PM CDT
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University of Nebraska President Hank Bounds today released a proposed 2017-18 operating budget that he said protects NU’s highest priorities of affordability and academic quality despite a reduction in state funding that will necessitate difficult decisions across the institution.

Bounds said the proposed budget, which will be considered by the Board of Regents at its June 1 meeting, shows prudence in a time of fiscal challenges for the state.

Reductions approved by the Legislature and additional cuts from Gov. Pete Ricketts, coupled with NU’s unavoidable rising costs, will create a recurring budget gap of $49 million by the end of the biennium.

The university plans to manage the challenge by cutting up to $30 million from its operations and increasing tuition at a level that will maintain NU’s position as one of the best values among its peers.

“The University of Nebraska pledged to be a good partner in navigating this period of fiscal stress and we know we have challenges ahead,” Bounds said. “We’ve been candid about how funding reductions would impact the university and we want to work with state leaders to continue a partnership that has provided affordable, excellent higher education for Nebraskans for many years.

The proposed tuition increase for 2017-18 amounts to about $10 to $12 more per credit hour for a typical resident undergraduate. Bounds is also proposing an increase of $6 to $7.50 per credit hour for most resident undergraduates for 2018-19 to help students and families plan, although that amount is contingent upon the university receiving no additional cuts in state funding.

With the tuition increases, NU’s costs would remain well below those of peer institutions. Nebraska-Lincoln’s tuition, for example, will continue to be much lower than the Big Ten average; Iowa, with similar tuition costs to UNL, is considering a 5 percent increase. And, given NU’s lower tuition pricing, an increase of 5 percent at Nebraska-Lincoln represents, for example, the same dollar amount as a 2.5 percent increase at Minnesota or a 4 percent increase at Kansas.

Bounds noted that the proposed tuition increases are moderate enough that they are not expected to impact enrollment – a key consideration given that the university already produces some 11,000 graduates annually and intends to grow that figure to do even more to meet the needs of Nebraska’s workforce.

The university also will increase its investment in need-based financial aid at the same rate as tuition so students with the highest need will not be impacted.

The budget proposal assumes $22 million in savings by the end of the biennium from a university-wide effort that began in January to cut spending in a range of operational areas including IT, human resources, financial operations and travel. About $5 million of that savings is projected to be realized in the next year. As cuts are fully implemented over time, savings could reach $30 million.

Bounds’ proposed budget includes a 1.75 percent increase in the salary pool for employees outside the collective bargaining units. Increases will be awarded on the basis of merit.

The Board will also consider the proposed 2017-18 operating budget for the Nebraska College of Technical Agriculture. The proposed tuition increases would amount to $6.50 per student credit hour in 2017-18 and $4 per credit hour in 2018-19.