NU Regents will consider $166M increase in state tax dollars in proposed 2027-29 budget request

The total operations increase for NU, if the request is approved as-is, would be 6.47% more than if lawmakers kept NU’s share of tax dollars for operations flat each year.

The budget proposal separately asks for $11.5 million in new funds to support students who ace the ACT, expand research capacity and restore funds for biomedical research.

NU regents will also consider a $55 million request to replace aging software that supports “nearly every aspect of the university’s operations,” according to the meeting materials. State colleges also use the software.

NU President Jeffrey Gold said NU has worked hard to be a “responsible steward” of state resources in recent years while also responding to multiple internal budget reductions. He said NU has always protected its “core mission” of teaching, research and statewide engagement.

“But after years of reductions, we have reached a point where additional cuts will inevitably diminish our ability to serve Nebraskans, strengthen our workforce and fuel the state’s economic growth,” Gold said. “At a time of economic uncertainty, investing in the University of Nebraska is an investment in the people, innovation and opportunities that will shape our state’s future.”

Budget proposal specifics

The proposed operations increase is based on a four-year rolling average of Consumer Price Index data, which the proposal states is a “predictable and objective mechanism.” In June, the regents similarly hiked tuition rates by 4.25% ahead of the upcoming academic year.

The proposed non-operations investments are as follows:

• $55 million in capital construction funds to replace the Enterprise Resource Planning system, which supports finance, human resources and payroll, procurement, student services and facilities management.
• $5 million for biomedical research, which would restore cuts made in spring 2026.
• $3 million to support NU’s Presidential Scholars Program, which offers a full-ride scholarship and annual $5,000 stipend to attract and retain prospective students who aced the ACT.
• $3 million to expand research capacity and competitiveness in pursuit of rejoining the Association of American Universities.
• $500,000 in the 2028-29 budget year and each year after to support operations and maintenance at the new Ag Tech Incubator and Accelerator, which is a companion to the U.S. Department of Agriculture’s National Center for Resilient and Regenerative Precision Agriculture being built at NU’s Nebraska Innovation Campus in Lincoln.

‘Cat’s been out of the bag’

NU’s latest proposal comes as Gov. Jim Pillen, a former NU regent, eyes reelection and as the state faces a nearly $850 million deficit for the 2027-29 budget cycle. Pillen became governor in 2023 and has been more critical of NU’s budget than in his prior role.

For example, NU requested a 3.5% increase for each year of the 2025-27 budget cycle in August 2024. But come January 2025, Pillen suggested a 2% cut in the first fiscal year.

Ultimately, lawmakers increased NU’s budget by about 0.6% each year of the 2025-27 cycle.

Pillen told the Nebraska Examiner in a mid-July interview that one of his “greatest frustrations” from his early days as a regent was increasing spending, sometimes upward of 5% every year, no matter whether NU faced inflationary or deflationary pressures.

“The cat’s been out of the bag, and I believe it’s time to rein it back in,” Pillen said in July.

The governor has directed all state agencies to do more with less, and he’s asked his budget director to withhold 5% of legislatively authorized monthly allotments to prepare for more cuts. Lawmakers will have the final say and could choose to release the withheld funds next spring.

NU’s total share of the reductions, if they all go through, would be just shy of $30 million, which NU officials have criticized. Pillen, however, says that “just tells you how severe and how much opportunity there is” to take a deeper look at NU’s budget.

Pillen said he is asking that NU provide “measurables” to justify any increase, such as whether every faculty member can be held accountable to be a teacher and researcher while working full time. He noted that NU takes a larger per-capita portion of taxpayer dollars than its regional peers and other Big Ten universities but is “critical to Nebraska.”

“The taxpayers are clear on their expectation to reduce government spending, and as the largest operating program in the General Fund budget, the university should be part of the solution,” Pillen told the Examiner on Thursday, when NU released its proposed request.

The Nebraska Department of Health and Human Services and Department of Education receive a greater share of income and sales tax revenue. However, after removing non-operational spending, such as for Medicaid and aid to K-12 schools, NU ranks highest in operational costs.

‘Attitude of priorities’

NU Regent Paul Kenney of Amherst, board chair, told the Examiner it will be interesting to see how the year comes out, especially with Pillen calling for more cuts.

Kenney noted the request is based on inflation and seeks to keep up with increased costs for salaries, benefits, health insurance and utilities. Asked if he had concerns heading into the next legislative session, he said NU has to understand what’s out there and what’s available.

“Maybe the corn market turns around or the bean market turns around and we have a different picture in six months,” Kenney said.

NU Regent Barbara Weitz of Omaha similarly said NU is helping to shape the next generation of scholars who will determine the well-being of the state and country.

“I think creating an attitude of priorities around educational goals for the state is really important and, clearly, when state revenues are hurt by policies that mean our crop prices go down, it’s a real concern,” Weitz said.

State Sen. Ashlei Spivey of Omaha, a returning member of the Legislature’s budget-writing Appropriations Committee, said she hadn’t reviewed NU’s proposed budget request but has talked to NU leaders. She said NU is an “important and integral asset of Nebraska,” which helps produce the next workforce, attracts and retains talent, and spurs economic development.

“I did not support the cuts previously and will be advocating and championing for the university to be able to be more sustainable and made whole from some of the other decisions that have been made in the previous biennium,” Spivey said.

‘Unlikely to be approved’

The outgoing Appropriations Committee chair, however, had a different view. State Sen. Rob Clements of Elmwood, when told about the proposed 4.25% increase both years, initially laughed and said the Legislature will look at the request, “but it’s very unlikely to be approved.”

“That’s a real big increase,” said Clements, who will be term-limited in January after 10 years. “All the other state agencies are being asked to reduce their expenses, and so, I guess I would say they’re thinking it doesn’t hurt to ask, but they should not be expecting to get fully funded at that level. That’s a lot of money.”

Weitz said some people have encouraged regents to look at tuition rates. Compared to other Big Ten and regional universities, NU continues to be competitive with tuition rates. However, Weitz said she doesn’t want to see NU using increased student debt as a means to offer those very students the education regents think they deserve.

“The struggle here is all the unknowns, and I think it’s so hard to be a state senator who’s got to balance all the needs across the whole state,” Weitz said. “I get that that’s very difficult, and I know that means setting priorities.”

The regents meeting begins at 9 a.m. Thursday in NU’s Varner Hall in Lincoln.

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