Sept. 27, 2016
The University of Nebraska has joined other state agencies in submitting our request for state funding for the next two years. As you know, we depend on state support for salaries and benefits as well as many of the day-to-day costs of running the university. We look forward to discussing our funding needs with the Legislature and Governor in the months ahead.
Our request includes components that directly impact employees. I want to briefly review these with you.
“Our budget request builds on a long and successful partnership between the state and its public university that allows us to have a $3.9 billion impact on Nebraska’s economy each year.”
Like most universities, the University of Nebraska is a people-driven enterprise. As such, the bulk of our request – more than 90 percent – is related to salaries and benefits. We will have a clearer picture of our salary needs after collective bargaining concludes at UNO and UNK. Let me say a few words about benefits. In April I wrote to you about a three-month health insurance “premium holiday” that we were able to offer. I wrote that given our challenge of navigating an uncertain future for the health insurance industry, we expected future premium increases would be required. That will be the case. We are planning a 10 percent increase in health insurance premiums – both the employer and employee contributions – each of the next two years.
I know increases are never welcome news. In working with our independent actuaries, we determined that these increases – the first since 2009 – are necessary to help us manage the significant growth we’re seeing this year in both high-cost claims and claims overall. When you consider that health care costs in general are also rising, the premium increases will ensure that our health plan remains stable and well-positioned to meet the needs of our employees and their families.
You may ask why we implemented a premium holiday knowing these increases were coming. The premium holiday brought our health plan’s reserves – one-time savings that have accumulated over a number of years – near targeted levels. However, the plan depends on the monthly premiums that you and the university pay to cover its recurring expenses, primarily medical claims. So using one-time resources to offset future premium increases would create a “fiscal cliff” that ultimately would require premium increases significantly higher than the 10 percent being proposed.
Our intent is to keep future premium increases as moderate as possible. We will provide you with more information about your benefits options for 2017 in advance of our annual NUFlex enrollment period, which begins in November.
Our two-year budget request to the state also seeks funding for the following priority initiatives, which were developed in consultation with your chancellors:
- $250,000 for student access and success initiatives at UNK that will support timely degree completion, in line with our goal for the University of Nebraska to be the best place in the nation to be a student.
- $500,000 for our National Strategic Research Institute, which is conducting timely and important research in support of USSTRATCOM’s mission to combat weapons of mass destruction.
- $500,000 for the Nebraska Applied Research Institute, a new institute housed at UNO that will contract with clients in industry and government in areas like data science, cybersecurity and modeling/simulation.
We have also submitted a two-year budget request for the Nebraska College of Technical Agriculture that seeks new state funding for compensation and general operations to advance NCTA’s momentum in meeting the needs of Nebraska agriculture.
Necessarily, we cannot ask the state to fund every priority – even in the best economic times. You have likely seen news reports about the current fiscal challenges Nebraska is facing. We will be a partner in navigating these challenges. Our budget request does not cover all our needs; in fact, over time we have had to do more with less given that the university accounts for a much smaller share of state spending than we did 30 years ago.
But our request does represent responsible budgeting that will position us for continued success. Most importantly, it builds on a long and successful partnership between the state and its public university that allows us to have a $3.9 billion impact on Nebraska’s economy each year – to say nothing of the innumerable ways we improve the health and quality of life in communities across our state.
That impact would not be possible without the good work you do daily on behalf of our students and stakeholders. Thank you for making this university an institution Nebraskans can be proud of.
President, University of Nebraska