I am sure many of our IANR community members were puzzled and perhaps even perplexed when Chancellor Perlman announced to the campus community in February that once again, UNL would need to adjust its state-aided budget in order to achieve a balanced budget in the current year and moving forward. Unfortunately, this is an all-too familiar process and situation for our campus. However, this time it may seem quite illogical that we should be required to make budget cuts when we have been experiencing such rapid growth and momentum, particularly in IANR. After all, haven’t we seen 9 consecutive years of student growth in CASNR, record growth in support for our research and extension programs, a very robust and sound agricultural economy, all leading to increased support from the state of Nebraska in the current biennium with no tuition increase for our resident students? And, furthermore, aren’t we just completing the largest hiring initiative in our faculty in over 40 years, resulting in 61 new faculty joining our IANR team since 2012? That does not sound like an environment where a budget cut should be required!
As the Chancellor has since explained to the campus, this is a result of a carry-over deficit of $2M in fiscal year 2013 coupled with a $2.65M deficit that has been added in the current fiscal year. The campus leadership had thought our growth in student numbers might address the deficit moving forward, so we found ways internally last year to cash flow the deficit on a one-time basis. Unfortunately, that did not come to pass, and we find ourselves now needing to fix this issue moving forward. As Harvey pointed out in March, part of the reason for this deficit at the campus level is an increasing level of distance education tuition that now resides in the Colleges resulting from the policy established several years ago to incentivize the development of distance courses, leaving an operating deficit at the campus level. Unfortunately, that policy was enacted not expecting the majority of such tuition to be generated over time from resident students. Moving forward this will be addressed with a new policy to prevent this situation from occurring in the
In the meantime, that has left us with a $4.65M deficit to fix in this year, and as you know that process has been moving forward over the past couple of months. The administration proposed that the deficit be eliminated primarily from a 1% reduction in the proposed 3% salary increase pool for all faculty and staff. This would account for $3.2M of the amount required, leaving $1.45M to be contributed proportionally across the campus operating units. Under our standing UNL policy, this means that IANR is responsible for covering 28%, or in this case approximately $400K of the remainder.
We carefully analyzed where this $400K would come from in our permanent state-appropriated budget. You may recall that several years ago, the former Communications and Information Technology (CIT) unit of IANR went through a re-formulation as a part of two budget reduction cycles. The then newly formed Educational Media (EdMedia) unit was reduced in personnel and was moved to a cost recovery model with approximately $1.1M of state-funding still budgeted annually across the IANR divisions for purchase of such services, especially from UNL Extension. That is the model we have been operating under since 2011.
We have been evaluating over the past year how this model has worked to date, and have determined that significant further reform of the unit is needed, which will be done in the coming months as a part of this budget reallocation process. In short, we have determined that our cost structure for delivery of these services is higher than should be the case based on the market, and thus we need to bring this important part of our operations into a higher level of financial sustainability and accountability. In an earlier blog on March 28th, I described the charge of a task force currently at work on state-wide optimization of our resources across IANR being led by associate vice chancellor Ron Yoder. The task force has also been asked to carefully review the needs of IANR in the educational media arena and come forth with a proposal by July 1st for how we can effectively deliver the services needed for all of IANR’s diverse portfolio across our teaching, research, and extension missions under a re-formulated budget model.
We are very sensitive and empathetic to the fact that any time a budgetary adjustment process is done, there are ultimately people who are directly impacted by such change. There is uncertainty associated with change and transition, and in the educational media support area, that is the certainly the case for both staff in the EdMedia organization, as well as customers and consumers of the services provided. We are committed to getting this right for the long term, and I am confident the new model that emerges will put IANR in a better position than currently exists for relaying our story to the greater public across the board.
In the mean-time, please know for all involved that we are seeking a great future for IANR in this area and will assure our needs will be met better than ever before, while being sensitive to this being a time of great change for some of our staff and faculty in this area.
So, yes, we are growing IANR in unprecedented ways (and expect to continue to do so for years ahead), but, we also are committed to a healthy operating budget for our University and see this as an opportunity to develop a highly successful and sustainable educational media support services structure and system for all of IANR.