LINCOLN - Some tough budget decisions may be ahead for the University of Nebraska Board of Regents.
NU budget director Chris Kabourek told the regents Friday that without a tuition increase, NU could be facing a $28 million shortfall during the 2010-11 budget year. That assumes a 1.5 percent pay increase for faculty and staff.
In response, some regents called for a rethinking of NU spending priorities, instead of continuing to rely on individual campus leaders to come up with spending cuts and budget reallocations.
“The chancellors have been very effective. But with what we're facing in the next couple of years, I'm not sure if that process will continue to work,” said Regent Jim McClurg of Lincoln, “or if it will have to be escalated to a whole new level to deal with dramatic shortfalls.”
NU President J.B. Milliken agreed.
“We're going to have to think very strategically about where we want this university to be,” he said. “It will be a challenge for all of state government as well as the University of Nebraska.”
The amount to be trimmed from campus budgets next year will depend upon how much tuition might be raised and final decisions on any salary increases, Kabourek noted. He also said the budget picture may brighten if tax receipts improve in coming months.
The gap results from a tight state budget the university's appropriation from the state next year will grow 0.4 percent, Kabourek said.
He noted that universities in states harder hit by the economic downturn are boosting tuition by as much as 16 to 20 percent.
During a previous budget crunch, NU hiked its tuition 10 percent in 2001 and 2002, 15 percent in 2003 and 12 percent in 2004.
Tuition for 2009-2010, however, was raised by 4 percent, the smallest increase in 10 years.
Tuition rates for 2010-11 will be set during the regents' June meeting.
Assuming average growth in higher education costs, NU could face a $50 million shortfall during the 2011-13 two-year state budget period.
State appropriations, at $492 million for 2009-10, have not kept pace with inflation during the past decade, Kabourek said.
The university system has made $8.5 million in cuts to this year's spending to keep its budget balanced, Kabourek said. Another $9 million in spending cuts are being developed. The reductions thus far have eliminated 103 full-time-equivalent positions, including 27 layoffs.
State support has been reduced or eliminated for several programs, including the Nebraska Statewide Arboretum, Mary Riepma Ross Media Arts Center and the Public Policy Center.
Kabourek said the budget cuts have helped the university in many ways. They have helped keep tuition affordable and required administrators to select top priority programs and to re-evaluate campus priorities.
Also on Friday, the Board of Regents unanimously approved the creation of a corporate board to oversee development of the Innovation Campus, a public-private research park to be built on the former state fairgrounds near the University of Nebraska-Lincoln.
The regents also appointed four NU leaders and five private-sector representatives to the board. They are NU President J.B. Milliken, UNL Chancellor Harvey Perlman and vice chancellors Prem Paul and John Owens; Tom Henning, CEO of Assurity Life Insurance in Lincoln; Tonn Ostergard, CEO of Crete Carrier in Lincoln; Dana Bradford, president of McCarthy Capital Corp. in Omaha; Matt Williams, president of Gothenburg State Bank; and JoAnn Martin, CEO of Ameritas Life Insurance in Lincoln.
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402-473-9581, leslie.reed@owh.com
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