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   from the issue of February 23, 2006

Chancellor outlines budget strategy

Harvey Perlman, chancellor, issued this message concerning the UNL budget situation in a Feb. 15 campuswide e-mail.

Dear Colleagues:

At the beginning of this academic year we faced a budget deficit of approximately $5 million caused in part by our enrollment decline.

At that time, after much deliberation, I decided to ask each unit to cut expenditures by 2 percent this year and to permanently reduce their budgets for next year by 1.66 percent. I have now had the opportunity to review the proposed permanent cuts and, frankly, it is not a pretty picture. I don't need to tell you that several years of budget cutting have left us very lean financially. I might have said "lean and mean" because we continue to make wonderful progress across the university. All of you have really risen to the challenge of maximizing the impact of the resources that remained. But I now believe that the permanent reductions proposed to me by vice chancellors, deans and directors would unduly diminish our quality and restrain our progress. So I have struggled to figure out how to manage our situation consistent with our core value of an uncompromising pursuit of excellence.

Two uncertainties cloud our future. First, we have asked the legislature to help us with our utility shortfall and our cleanup obligations at Mead. We are hopeful we will get the requested relief. If we do not, it could require another $6 million cut in our budget.

The other uncertainty is more positive. Early application figures for next year appear strong. Many of you, along with our admission staff, have worked hard on retention and recruitment, and apparently with some success. All of us need to continue to work hard over the next months so we will finish strong.

While it is unlikely that a projected enrollment increase will eliminate entirely the shortfall it will certainly help. (Notice I have restrained myself and not given undue credit to Tommy Lee for these increased applications).

Given our situation and these uncertainties, I have decided to finesse once more the budget shortfall. We will reinstitute a process used here in the 1980s called the "assigned minus." Unit budgets will, in general, be reduced by a proportion of the shortfall and these reductions can be managed by deans and directors as they determine best. Thus they can take advantage of opportunities to temporarily save money or they can make permanent reductions to meet their assigned minus. As resources increase, we will "buy back" some of these minuses in relationship to our priorities.

This may sound unduly complex but for now it avoids permanent cuts with the hope that for the most part they will become unnecessary. This also gives deans and directors maximum flexibility to reduce expenditures where the reduction will do the least harm. This exercise of asking for more or less across-the-board reductions has confirmed in my own mind that we engaged the right strategy in the past in making vertical reductions. In looking at the more horizontal proposals made this time, they just inflict too much damage on too many vital programs. It would be with the deepest of regret if I am forced to return to a vertical cut strategy. But you should know that if our deficit grows larger than our current situation, I will have no choice but to do so.

Thank you again for what you do and for your understanding and support.

Harvey Perlman, UNL Chancellor



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