NU asks for more funding to avoid deeper cuts, higher tuition

The University of Nebraska and business interests that say the state benefits from a well-prepared workforce made the argument Friday that the university should receive 1 percentage point more in state funding than currently proposed in order to avoid increased tuition and deeper spending cuts.

NU President Ted Carter, a retired Navy admiral, put the challenges facing the university system into naval terms.

Carter called them “headwinds.” He discussed the demographic challenges of declining enrollment at a time when significant inflation is hitting the university’s fixed costs for heating, cooling and insurance, plus the need to increase faculty pay.

Carter told the Legislature’s Appropriations Committee during Friday’s budget hearing that NU needs 1 percentage point more in state taxpayer funding than the 2% budget increase that Gov. Jim Pillen included in his budget proposal for 2023-25.

Without it, he and others testified, the university might need to increase tuition. He shared with the committee that he and his team have already proposed budget cuts to make the 3% increase they requested work. One reason: Faculty are getting a 3% raise and need it, Carter said, if NU is to stay competitive for talent at a time when costs are increasing faster than pay.

NU requested a 3% annual increase, starting with $679.7 million from state general funds in 2023-24. Pillen had proposed a 2% annual increase, starting with $664.7 million.

Among others testifying in support of additional funding were Tim Clare, chairman of the NU Board of Regents, and a pair of student regents.

Carter and Clare highlighted the budget proposal’s investments in the University of Nebraska at Kearney and the University of Nebraska Medical Center’s rural health facility in Kearney, which both said would fill a gap in greater Nebraska’s workforce.

Carter praised proposed funding for scholarship programs that will keep the university accessible to more students.

But het said the university is combating rising expenses and limited revenues. He told the committee that he doesn’t expect the state to make up for dipping enrollment and that he is not asking for more money than the university needs. 

“I want you to know it’s because I have studied the numbers carefully and believe it’s exactly what we need and not a penny more,” Carter said, adding that he is trimming his own office’s staff by 20%.

NU has frozen tuition increases over the past two years. Carter said the NU Board of Regents is still deciding whether the current tuition rates can be sustained. He said the decisions the Legislature makes about the NU budget will impact that decision.

He stressed that, NU has no desire to “balance our budget on the backs of our students.” So more spending cuts would be sought before NU turns to students and families.

NU Student Regent Emily Saadi relayed the stresses students on her UNK  campus told her they face, trying to make sure they can afford to attend the university. She encouraged lawmakers to continue state support to contain costs.

“Financial burdens affect students’ mental health,” she said. “The affordability of the NU system was one of its biggest draws.”

Clare testified that after 14 years as a regent, he is more convinced than ever that NU is the state’s “No. 1 partner” when it comes to workforce development and economic growth.

Bryan Slone, president of the  Nebraska Chamber of Commerce and Industry, said the top challenges facing Nebraska businesses are recruiting, training and retaining 18- to- 34-year-old workers.

Slone supported the additional investment in the university, saying the state’s businesses need the infusion of local talent.

“The cliff is coming,” he said of people retiring and have fewer young people of college age. “Our postsecondary institutions are the front door of that process.”

State Sen. Christy Armendariz of Omaha questioned Carter about whether the decline in enrollment might be tied to questions about the political climate on campus. Carter said no, pointing to national declines in enrollment higher than NU has faced.

Enrollment nationally from 2012-22 is down 10%. During the pandemic, it dropped 5%. NU enrollment fell 2.2% last year but went up slightly during the pandemic, he said. However, he said, a demographic dropoff is coming in the mid-2020s that will see enrollments drop by double digits in some places.

“Compared to the national averages, our enrollment drop is significantly better than the national average,” he said.

Mark McHargue, president of the Nebraska Farm Bureau, emphasized the work the university is doing to provide rural health care workers closer to the communities they serve. He credited the university for its contributions to Nebraska agriculture.

Nicole Kent, a student regent from the University of Nebraska Medical Center, testified about the benefits of her NU education. She said targeted investments in rural medical education are part of how she’ll become a primary care doctor.

She looks forward to living and practicing in a rural community, and she said she knows she’ll see teachers, business leaders, ag leaders and more when she gets there who got their start at NU.

“Sometimes we hear stories like mine, and we think they are rare or unique — especially for a kid from small-town Nebraska — but I do not believe that is the case,” Kent said. 

In a long legislative session like this one, the Appropriations Committee must issue its recommendations for the 2023-25 state budget by early May. 

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