The news last Friday wasn’t good.
The state’s economic forecasting board cut another $69 million from projected tax collections, meaning the state of Nebraska is faced with a $761 million budget shortfall over the next biennium.
For sure, some of those reductions will be made to the University of Nebraska.
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NU President L. Dennis Smith, Ph.D., will announce partial budget reductions for all four NU campuses during his presentation to the Legislature’s Appropriations Committee on Monday, March 10. A special announcement will be sent to UNMC employees during the afternoon of March 10, stating what the president will report regarding the UNMC budget reduction item. During the forums, Chancellor Harold M. Maurer, M.D., will discuss Phase I of the UNMC budget reductions, which have been agreed to by the Chancellor’s Council. Although the Legislature’s Appropriations Committee added funding not included in the governor’s original proposal, UNMC still faces severe reductions. Dr. Maurer will present a budget reduction model that highlights the extent of the cuts that UNMC most likely will have to confront. “This specific budget reduction, which we call Phase I, is basically a done deal,” Dr. Maurer said. “We’re very appreciative of the actions of the Appropriations Committee, but the magnitude of the potential cuts is sobering. I want to take the opportunity at the forums to inform employees of the budget reduction process employed prior to this time and what that process will be during the next several months to develop recommended cuts in later phases. “Due to several statewide economic and political factors, a lot of uncertainty exists at this time over the final amount UNMC will need to cut.” NOTE: A sign language interpreter will be available at both forums. |
“Certainly, we expect that we’ll take a budget reduction over the next two years,” UNMC Chancellor Harold M. Maurer, M.D., said. “How deep those reductions are really will affect who we are as a university, however. We hope that legislators will realize that we are a major supplier of health professionals and economic engine for the state, and that our success is vital to the state’s long-term future.”
During the rest of this week, UNMC Today will present some of the basics about the budget situation at the university, how the university’s appropriation has compared with other state agencies during the past decade, and how Nebraska’s budget situation compares with other states.
First, it’s important to understand a little bit about UNMC’s budget.
The FY 2002-2003 UNMC budget is $342 million. Only 28 percent of the budget’s revenue is provided by the state’s general fund.
“To say that UNMC is state-funded is bit of a misrepresentation,” said John Adams, assistant vice chancellor for budgets and strategic planning at UNMC. “To say we’re state-assisted would be a truer statement. However, this state-funding support is absolutely essential to our mission.”
In addition to the state funds, other major revenue sources at UNMC include:
- Cash funds account for about 16 percent of UNMC’s revenue. These funds include items such as student tuition and revenue from clinics at Munroe-Meyer Institute, the UNMC College of Dentistry and some University Medical Associates locations.
- Federal grants and contracts account for about 11 percent of the budget revenue.
- Restricted, “trust” funds, which account for about 28 percent of the budget, include non-federal grants and contracts, private gifts, professional fee income, and distributions from the University of Nebraska Foundation and Nebraska Health System.
- Auxiliary and revolving funds total 17 percent of the budget revenue. These funds come from areas such as the print shop, bookstore, parking and child care center.
Of the above revenue categories, the state general fund has grown more slowly, percentage-wise, than the others. That means UNMC’s reliance on state funds is shrinking. Whereas the percentage of state money in UNMC’s budget was over 32 percent two years ago, today it stands at 28.5 percent.
Of the revenue, only the state support and cash funds are unrestricted, meaning UNMC can budget them in the areas of greatest need or highest strategic importance. Commonly, those two funds together are referred to the “state-aided” portion of the budget. The federal grants, trust funds, and auxiliary and revolving funds are earmarked for specific purposes and can’t be shifted to fill pressing needs, Adams said.
“These funds are used to support specific, dedicated activities and are not transferable,” Adams said. “When scientists apply for grants to conduct specific research projects, the university can’t use those funds for other purposes. The same is true for fees for parking or to the Center for Healthy Living, or gifts to the University of Nebraska Foundation.
“When cuts occur in the amount appropriated by the Legislature, the state-aided portion of the budget must absorb all of the cuts.”