Dear Colleagues:
I am writing today about the impact on the University of Nebraska of the economic turmoil in our country and across the globe. Fortunately, because of the excellent work of dedicated faculty and staff, the university is in a position of strength. Nonetheless, the next budget cycle will be difficult, and we will need to work together to meet the challenges ahead.
No doubt you have seen news about budget problems in other states. According to one source, 39 states are facing mid-year budget shortfalls or projecting deficits in the next fiscal year. In a number of states, including Iowa and Kansas, public universities have been instructed to make mid-year budget cuts. Nebraska’s largest private university, Creighton, has reported plans to reduce spending by up to 10 percent.
To date, Nebraska has been spared some of the extreme fiscal distress experienced in other states, but our state is not immune and recent events have now brought our circumstances into sharper focus. Last month, the state’s Economic Forecasting Advisory Board significantly lowered its estimate of future state revenues, which indicates that Nebraska will almost certainly face a budget deficit in the next biennium. And while the state has a healthy cash reserve fund, I expect state leaders to be conservative with its use as they plan for the next several years.
At this time, we do not anticipate mid-year budget cuts; however, we must use the seven remaining months of this fiscal year to prepare for more difficult times ahead. First, we must reduce expenditures from now through June 2009, so we will be in a position to use unexpended funds to help manage in the fiscal year beginning July 1, 2009. The governor has assured me he will seek re-appropriation of unused state funds from this year to help in the next. Second, we must begin the difficult process of planning for a biennial budget that will likely require reductions. The chancellors and I will consider university-wide and campus-based strategies for addressing our budget challenges. We share the goal of protecting the university’s core academic programs and strategic priorities, including ensuring affordable access to a quality higher education. So while we will seek additional ways to enhance revenue, I do not believe we can be true to our mission and balance the budget with significantly higher tuition.
Fortunately, the university enters this challenging period having accomplished much in recent years: (1) enrollment has increased each year for four straight years, and today we have more students than at any time since 1996; (2) the academic profile of our student body continues to improve, with record average ACT scores on each predominantly undergraduate campus; (3) our research funding is nearly double what it was in 2000, which attracts outstanding faculty and students and creates new opportunities for Nebraska; (4) last year the University of Nebraska Foundation exceeded the previous record for annual private giving and transferred a record amount to the campuses for scholarships, faculty support, programs and facilities; and (5) we have made much progress in efforts to make higher education possible for all Nebraskans, announcing the Collegebound Nebraska tuition assistance program last week and attracting extraordinary funding from the Buffett Foundation for the new Thompson Scholars program.
The importance of this momentum-and its consequences for the state-will not be lost on Nebraskans and their leaders. I believe there is a widely shared view that for our state to be vibrant economically and offer a high quality of life, it must have a strong University of Nebraska. Our graduates will be among the leaders in this state in every field of endeavor, our growing research activities will fuel innovation and create jobs, and our outreach to schools, communities, businesses and citizens will continue to help them improve their circumstances.
This is a great university today and it will emerge from the current economic turmoil in a strong position. I am convinced that if we are guided by our values and strategic priorities we can maintain momentum, accomplish many of our goals, and continue to serve the people of Nebraska well. Thank you for all you have done to make the University of Nebraska the institution it is today, and thank you in advance for your efforts to help meet the challenges that lie ahead.
Sincerely,
James B. Milliken
President