Bounds: NU budget request ‘will not cover all our costs’

August 5, 2018

The University of Nebraska Board of Regents approved a biennial budget request Friday asking lawmakers for $39 million more in funding over the next two years.

But regents and administrators warned the 3 percent and 3.7 percent increases in the 2019-20 and 2020-21 school years would only help avert a recurring funding shortfall and potentially not even cover NU’s cost of doing business.

NU President Hank Bounds said the request, which will go before the Coordinating Commission for Postsecondary Education before it’s submitted to the Legislature this fall, barely meets NU’s needs.

“If we were to be flat-funded during this next biennium, the quick math is that we would have a $39 million recurring budget gap to close,” Bounds said. “I can tell you this request for funds will not cover all our new costs.”

The proposal calls for $17.3 million in additional state funding for the 2019-20 school year, primarily to boost a salary and benefits pool as well as increases to health insurance premiums, hikes to utility costs and for a bump in general operations.

For the second year, NU would receive another increase in its state appropriation, roughly $21.7 million to account for additional costs tied to health insurance, Bounds said.

Bounds cautioned that the budget request was built upon an educated guess of historical data tied to health insurance premium increases, as well as utility costs that NU cannot control.

If cost increases are higher than projections, Bounds said NU could be forced to generate new revenue, likely by leveling a tuition hike. Regents authorized Bounds to increase tuition for the spring 2019 semester if the state’s finances remained dour.

Or, the university could be forced to endure another round of programmatic cuts across its four campuses in an effort to trim its budget, he said.

Both options have been used by the university in the last two years as it faced several cuts imposed by the executive and legislative branches of state government.

“Over the past couple years, we have not seen new money, we’ve only absorbed cuts from the state,” he told the board.

Regent Howard Hawks said NU remains “in a really difficult circumstance” when it comes to its state-aided budget and remaining affordable and accessible to Nebraska families.

“The president is asking for less money than we need,” Hawks said bluntly.

Combined with a shaky agricultural economy that could potentially complicate the state’s financial picture moving forward, Hawks said NU needs to “be really clear to the public, to our Legislature, and to our governor that we’re going in with a request that is significantly deficient compared to our needs.”

Even using historical data to predict health insurance and utility increases, Bounds said NU will be forced to manage some unknowns.

Receiving more in-state aid can help manage those costs, he said, while also allowing the university to offer more scholarships to Nebraska students, or to reinvest in programs to bolster the state’s economy.

Regents unanimously approved the two-year budget request.

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