LINCOLN — University of Nebraska President Jeffrey Gold said Thursday that impending systemwide budget cuts of more than $40 million will be “incredibly painful” but “necessary” for NU’s survival.

Dr. Gold, speaking at his inaugural “State of the University” address, said NU will still embark on what he’s coined the “Odyssey to the Extraordinary.” He set out his vision one year ago during the formal ceremony celebrating him as NU’s ninth president. Gold returned Thursday to say he still seeks to make an “already good, already excellent” NU “something more.”

Gold didn’t shy away from NU’s challenges, such as slowing state support and uncertainty in federal research dollars or policies, in an event believed by NU officials to be the first NU presidential address of its kind, and which Gold hopes to make an annual tradition.

“While the challenges are significant, I see this as a time of profound opportunity,” Gold said Thursday. “An opportunity to actively reimagine our university. An opportunity to lead. An opportunity to help define what higher education in the next decades must look like.”

Thursday’s address and Gold’s 2024 investiture were both held in the Nebraska State Capitol, which Gold said was purposefully in the “people’s house.”

Fiscal uncertainties

Gold said Thursday that since 2016, NU has had an average annual net loss of $206 million across the NU system, when accounting for inflation and state funding growth. He said the university system is funded to about 74% of where it would be if available money had matched inflationary expectations.

Tuition increases have also been kept lower over the past six years than many of NU’s national peers, increasing tuition by 13.8% in that time frame, slightly more than half what many other universities increased tuition by during that period. 

Combined, those pressures mean an NU budget that has annually been about $260 million leaner in recent years.

Under President Donald Trump, NU now also faces a tightening research environment in which competition is growing for more-limited funding. Universities also need to absorb the costs of more cutting-edge research, Gold said, which he said isn’t sustainable in the long term. He said federal research dollars often make discoveries possible.

“Fewer federal resources put this nationwide research enterprise at risk,” Gold said.

At NU, nearly three out of every four students are Pell Grant-eligible, stressing federal dollars, and Gold noted that student demographics are also shifting. Instead of 18-year-old high school graduates, NU is seeing more teenagers taking dual-credit courses to get a leg up or attending community college first. Many also prefer online courses or online-only degree programs.

Combined with inflation and a smaller-than-requested bump in state dollars this spring, NU faces a $20 million shortfall by the end of this year. That comes even as the NU Board of Regents raised tuition by 5% ahead of this academic year.

‘Cannot cut out way to excellence’

NU’s four main campuses in Lincoln, Omaha and Kearney have already unveiled how much each campus will have to cut to shore up that systemwide deficit and campus-specific structural deficits, though specifics of most of these cuts have yet to be announced:

  • University of Nebraska-Lincoln: $27.5 million.
  • University of Nebraska Medical Center: $9.1 million.
  • University of Nebraska at Kearney: $4.5 million.
  • University of Nebraska at Omaha: $1.9 million. 
At UNL, for example, costs have outpaced revenues. UNL Chancellor Rodney Bennett, the lone campus chancellor not to attend Gold’s address, is expected to announce UNL’s proposed cuts next week. UNL’s target of $27.5 million in cuts is greater than the combined budgets of the UNL College of Journalism and Mass Communications, UNL College of Architecture and Nebraska College of Law.

Gold said the Office of the NU President also would make cuts. He did not specify by how much, but said the combined efforts are required for a “sustainable, viable future” for an NU that still contributes to students, the state’s economy and communities.

“Make no mistake: We cannot cut our way to excellence, and certainly we cannot cut our way to our extraordinary destiny,” Gold said.

Gold told reporters that cuts would likely include eliminating whole degree programs and possibly departments, along wit combining some departments or degrees, while some new degrees might be established.

Any cuts of that nature would need the approval of the eight-member NU Board of Regents, likely by the board’s December meeting. Most campuses hope to finalize budget decisions by late October.

Changing state dynamics

Nebraska Gov. Jim Pillen served as an NU regent for 10 years before becoming governor in 2023, a period that included confirming Gold as UNMC chancellor in 2013.

Pillen in January initially proposed cutting NU’s budget by 2% over the next two fiscal years. Gold and Pillen negotiated, landing at a staggered increase this fiscal year and a smaller bump next year.

Asked whether Pillen had indicated whether NU would not get its increase next year, a 0.625% increase, Gold said no. He said Pillen has also not asked NU to make deeper cuts.

Laura Strimple, a Pillen spokesperson, said Thursday that Nebraska provides more than $720 million to NU each year, equivalent to 13% of state tax spending and the largest spending area that comes out of the main state piggy bank. She said Nebraskans expect fiscal responsibility across state government.

“Governor Pillen applauds the university for recent steps to curb spending and notes that more can and should be done as a good steward of taxpayer dollars to meet the mission of educating students and ultimately making sure that the university’s focus is on improving graduate outcomes,” Strimple said.

A recent third-party analysis of NU’s annual economic impact, done at NU’s direction, indicates an impact of $6.4 billion and a return on investment for every state dollar of $10. NU also educates one in seven working-age Nebraskans and represents 9% of Nebraska’s gross domestic product.

Lawmaker reactions

State Sen. Dave Murma of Glenvil, chair of the Legislature’s Education Committee, was one of about a dozen lawmakers to attend Gold’s event. He said NU is vital as an economic driver and for research and education that officials hope to build and grow, even in tight budget times.

“We will do what we can to fund the university,” Murman said. “Our goal is that the university will continue to be the premier university in Nebraska … and one of the best universities nationwide.”

State Sen. Danielle Conrad of Lincoln, also a member of the Education Committee and the Legislature’s most senior member at 11 years of service, said she is proud of NU’s accomplishments but placed the blame for NU’s challenges on Pillen and the Legislature.

Conrad said support for higher education, such as during her first two legislative terms in the 2000s and early 2010s under former Gov. Dave Heineman, wasn’t political. But now, NU and others are caught in the “crosshairs of ridiculous political battles” that she said have passed on the state’s “fiscal mismanagement” to NU students and families. She called it a “Pillen tax.”

“Being a supporter of the university means more than just waving a flag on game day,” Conrad said.

‘Ability to emerge stronger’

Gold said the 10:1 return is a good deal for state officials but that NU leaders will not waver from quality and growth, even if that means a deep cut in one area to help preserve NU’s ability in the others.

“I’d rather see programs disappear than do anything to dilute the quality of what that diploma means to people,” Gold said.

Any students in degree programs slated for elimination would still be guaranteed a chance to graduate, Gold said, adding: “Rest assured, we’ve got you and we’ll take care of you.”

Gold also took his address Thursday to explain how NU is already engaging in its “odyssey” to improve despite budget challenges, including major investments in health care, a groundbreaking clinical trial in a multiple sclerosis treatment, continued emphasis on digital and precision agriculture, growing collaborations in national defense and security, athletics achievements and a record-setting year in philanthropic support (though about 99% of the $416.6 million raised is restricted and must be used for specific purposes, not for core budget functions).

“If I were to go to the major donors and say, ‘Listen, we’ve got a leaky roof down on city campus. Maybe you’d like to help us replace that roof.’ I can only tell you that it would never work,” Gold told reporters.

NU will also create a new center for excellence in artificial intelligence for “groundbreaking discovery” for every campus, college and NU faculty, staff or student. Gold said that for Nebraska to thrive in an increasingly complex and competitive world, it needs bold investment, particularly from state leaders.

“We must acknowledge the hard truths of our challenges … but never lose faith in our ability to emerge stronger,” Gold said. “Our ‘Odyssey to the Extraordinary’ requires nothing less.”

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