University of Nebraska officials say state spending cuts put forth by Gov. Pete Ricketts could potentially result in fewer faculty positions, program cuts and dramatic tuition increases.
In his mid-biennium budget proposal released earlier this week, Ricketts proposed cutting NU’s state appropriation by 2 percent — a total of $11.4 million — for the remainder of this fiscal year ending June 30, as well as another $23.2 million cut for the 2018-19 budget year, or 4 percent of NU’s total budget.
The $34.6 million total represents roughly 45 percent of the “across-the-board cuts” recommended by the governor.
NU President Hank Bounds said Thursday the university would shoulder one-third of the statewide total once additional, targeted cuts to state agencies and programs are factored in, even though state spending to the university makes up 13 percent of the total budget.
“A cut of this magnitude would make it difficult for us to remain affordable for our 53,000 students and meet the workforce and economic needs of the state,” Bounds said in a statement. “I will be meeting with the university’s leadership team soon to discuss our options."
Last year, NU proposed keeping its annual level of state appropriation flat at $583 million while lawmakers sought to reduce that amount to $576 million. After the state's projected tax receipts fell once more, NU accepted a $13 million cut to its yearly appropriation for this year, putting its funding at $570 million, with the agreement that funding would rise to $580 million in the 2018-19 budget year.
Along with the loss in state aid, salary and benefit increases, rising insurance premiums and greater utility costs created a $49 million budget gap, which NU sought to close by enacting $30 million in non-academic cuts, as well as new revenue through tuition hikes.
The NU Board of Regents last June approved a 5.4 percent tuition hike effective this year, followed by a 3.2 percent cut next year. Regents could revisit those rates again this year if more cuts to the university’s state aid are enacted, an NU news release said last May.
Regents said the proposal coming from the governor’s office was stunning, and one that seemed to specifically target the university for deep cuts when compared to other state agencies.
Regent Howard Hawks of Omaha said the university board understands its role in helping the state alleviate the pressures of an ongoing revenue shortfall. “I know we have to participate, but I think we’re getting hammered disproportionately,” Hawks said.
“Simultaneously, we are and we’re supposed to be the growth engine of the state,” he added. “It’s like buying a 12-cylinder sports car and saying, ‘Let’s take four cylinders out of play but make sure it’s delivering on everything we need.’ That’s not possible.”
Regent Bob Whitehouse of Papillion, who will relinquish leadership of the board later this month and leave the board at the end of the year, called the governor’s proposal “a huge pill to swallow.” The figures recommended by Ricketts will “change the momentum of the university.”
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“The basic concept of us having worked now for a year to find as many efficiencies as possible to address the last round of cuts has put us in a position with these newer cuts to have to look at programs and people,” he said. “The chancellors and president have a huge task ahead. These are going to be very devastating.”
Whitehouse added NU “wants to, has to and needs to be a good partner with the state,” but like Hawks, said the university seems to be taking the brunt of the cuts being proposed by state leaders.
“We cut the reasonable spots, we’re incorporating and consolidating,” he said. “There’s little left to look at except people, programs and colleges.”
Regent Paul Kenney of Amherst said the university will have serious decisions to make if the budget reduction is enacted, adding he expects NU to take some level of cut in the short and long term.
“It’s a pretty serious state when you’ve already cut the budget as much as we have,” he said, “But when the economy is based on ag, it’s in bad shape right now, too. If corn would go up $1 or $2 — that would change things dramatically, but right now I don’t see a whole lot of relief.”
Regent Jim Pillen of Columbus said he’s concerned that nearly half of Ricketts’ proposed cuts come from the university, which he described as an institution capable of driving individual and economic change in the state.
While NU has worked to trim its operations, and in Pillen’s opinion could continue to become more lean, he said long-term savings will take time to realize. Throwing another 4 percent cut onto the table would harm the university’s core offerings, he added.
“We believe education is transformative and is the future for economic development, to give access to all Nebraskans no matter what lot they drew,” he said. “From my seat I’m really struggling with the governor’s view.”
Ricketts said during a briefing for the media Tuesday that NU had been treated “fairly well” in recent budget negotiations, saying the Nebraska State College System had taken a larger cut relative to its size last year.
The state college system — Peru State, Wayne State and Chadron State — is eyed for another round of cuts under the governor's plan, including $1 million from its $52 million state appropriation this year and $2 million next year.
Chancellor Stan Carpenter said those proposed cuts "present a significant challenge."
"This will require long-term, permanent reductions during a time of unavoidable increased costs, which will double the impact on NSCS and our colleges," Carpenter said.