University of Nebraska asks for $166M increase in tax dollars in 2027-29 budget

The total operations increase for NU over the 2027-29 budget cycle would be 6.47% more than if lawmakers kept NU’s share of tax dollars for operations flat each year.

“You can’t cut a bone with a knife,” said NU Regent Jim Scheer of Norfolk, a former two-term state lawmaker. “And we’re about to that extent.”

‘Vitality of our state’

NU President Jeffrey Gold echoed Scheer, saying that after years of internal reductions, NU has “reached a point where continued cuts will unfortunately and increasingly mean doing less for the people who depend on them.”

“The vitality of our state depends on the vitality of its university system,” Gold said. “At a time of economic and geopolitical uncertainty, investing in the University of Nebraska is not just an investment in higher education, it’s an investment in Nebraska’s future, Nebraska’s workforce, its economy, its communities and for generations to come.”

The non-operational increases consist of $3 million to offer scholarships to students who ace the ACT, $3 million to expand research capacity, $5 million to restore funds for biomedical research the Legislature cut this spring and $500,000 for operations and maintenance at the new U.S. Department of Agriculture facility being built at NU’s Nebraska Innovation Campus in Lincoln.

NU regents also greenlighted a request for $55 million to replace aging software that supports “nearly every aspect of the university’s operations,” Gold said.

Gold and multiple regents said NU can’t rely on donors or tuition increases to keep up with rising costs for salaries, benefits, health insurance and utilities either. They said the Legislature and Gov. Jim Pillen need to be a “partner” for NU. 

Pillen represented northeast Nebraska as a regent between 2013 and 2023, when he became governor. He is running for reelection.

Addressing brain drain

NU faces a growing cost from state mandates to reduce or waive tuition, such as for dependents of law enforcement, firefighters and correctional officers, Gold said. In addition to NU waivers for top students, Gold estimated tuition remissions will top $66 million this year.

Scheer said the NU Presidential Scholars Program — a full-ride scholarship plus an annual $5,000 stipend to students who ace the ACT — is good. However, he said it still might not be competitive with some other universities.

Despite a state promise to support that program in the winter of 2023 before it started, Gold said, lawmakers have not put money behind that commitment.

Gold said Friday that tuition waivers will continue this year, but NU will need to evaluate whether “all, some or none” can be continued long term.

If Nebraska wants to mitigate or reverse brain drain, NU can’t have the “sole responsibility, said Scheer, who was speaker of the Legislature for four years. But he said NU’s impact, such as a $10 return on every $1 state investment, is falling on “deaf ears.”

“I’m hoping that the Legislature and the governor’s budget will reflect the importance of the university system in the coming years,” Scheer said. 

Multiple regents have noted that NU is competitive nationwide in tuition, so outside observers have suggested NU increase rates. However, Scheer said doing so would lead more prospective students to look to other schools with lower costs.

Growing budget hole

Despite the unanimous vote Thursday, NU faces an uphill climb in the 2027 legislative session for its request as the state faces what is currently a nearly $850 million deficit by mid-2029. Pillen has also been more critical of NU’s budget than in his prior elected role.

In August 2024, NU requested a 3.5% increase for each year of the 2025-27 budget cycle. 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 those two years.

“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 Nebraska Examiner last week.

The outgoing Appropriations Committee chair, state Sen. Rob Clements of Elmwood, laughed when he was told about the request and said, “It’s very unlikely to be approved.”

“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,” Clements said.

Pillen has asked his state budget director to withhold 5% of monthly allotments to state agencies, as well as NU, to make room for more budget cuts this spring.

State Sen. Ashlei Spivey of Omaha, an Appropriations member returning next year, said she would 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.”

The regents, an officially nonpartisan board, currently comprise seven Republicans and one Democrat. Pillen appointed Scheer to the now-governor’s former seat in 2023.

After Thursday’s meeting, Gold told the Examiner that if NU doesn’t receive its full request, the impact depends on how much less and whether the difference is in operations or investments. If the software replacement is not approved, for instance, he said that risks the existing third-party vendor not being able to support the existing software.

But if the core operational request falls short, Gold said, NU will do everything it can to increase other sources of revenue. However, it likely will mean more budget and program cuts.

“I mean, there’s really no other choice as to what we do now,” Gold said. “Over 80% of our budget is people, and so for every dollar we cut, 80 cents of that is jobs. And as sad as that may sound, just like any mission-driven organization, we will have no choice.”

‘We all have a role to play’

NU Regent Kathy Wilmot of Beaver City, who represents 45 counties in western Nebraska, said all campus chancellors are looking for ways to find cost savings, too, without sacrificing programs.

Board Chairman Paul Kenney of Amherst, as he told the Examiner one week ago, said Thursday that the state economy could also change a lot before legislators return in January.

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

University of Nebraska at Omaha Student Regent Aditi Rai said no one takes the Legislature’s role lightly. But she echoed Gold that investing in NU is an investment in Nebraska.

“The state, the university, students, the community, we all have a role to play,” Rai said. “And quite frankly, I think if we want Nebraska to continue to grow and compete, the university has to be part of that investment.”

In other items Thursday, the regents unanimously eliminated multiple degrees that have had declining or low enrollment for multiple years and established a few new degrees at UNO. Degrees eliminated include majors in ethnic studies and insect sciences at the University of Nebraska-Lincoln. New degrees at UNO include a bachelor’s degree in statistics and operations research and a master’s degree in early childhood education and special education.

The regents’ next meeting is 9 a.m. Oct. 9 at the University of Nebraska at Kearney.

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