February 12, 2018
This is a difficult day for the University of Nebraska, our 53,000 students and the citizens we serve. The funding reductions recommended by the Governor have forced us to make painful decisions that will upend peoples’ lives, make it more difficult for us to educate the future workforce, and limit our ability to grow Nebraska’s economy at a time when a comprehensive plan for growth is what our state needs most.
We know state leaders are working hard to manage a difficult budget. We’re going to ask the Appropriations Committee and members of the Legislature to make a clear choice about their priorities and what kind of future they want for our children and grandchildren. My view is that the University of Nebraska, one of our state’s most powerful drivers of individual opportunity and economic growth, has to be part of the conversation. There’s never been a more important time to work together to build that future.
President, University of Nebraska
President Bounds’ testimony to the Appropriations Committee
Testimony of NU President Hank Bounds
February 14, 2018
Chairman Stinner and members of the Appropriations Committee, thank you for the opportunity to be with you. I am Hank Bounds (H-A-N-K B-O-U-N-D-S) and I am president of the University of Nebraska.
Today I’d like to have a conversation with you about Nebraska’s future. About what kind of University and state we’d like to leave to our children and grandchildren. About what we see on the horizon for our communities and our workforce, and what our plan is to get there. And I would like us to talk candidly about the hard choices we face, and the consequences that result from some of those choices.
Senators, I don’t think it’s an overstatement to say that there has never been a more important time for this conversation. We are at a defining moment in Nebraska’s history. We have a choice to make.
Are we going to reaffirm the partnership between the state and its public university that has opened the door of opportunity to young people and driven economic growth for almost 150 years?
Or will you decide that you no longer see the value that the University of Nebraska provides, and make it harder for us to offer affordable and excellent education to our 53,000 students?
You have made hard choices before and you have hard choices ahead. I recognize and appreciate the Legislature’s work, particularly that of Chairman Stinner and this Committee, and especially during these difficult times. I know you are committed to the best interests of our state and that you share our concerns about the delicate balance between budget cuts and the need to invest in long-term growth.
The University has been and will be a partner in helping you manage this challenge. But my view is that if we want Nebraska to compete, if we want this to be a place where our children and grandchildren will live and work and raise a family, if we want to build a workforce that will sustain us into the future, we have to invest in one of the primary economic drivers our state has. And that is the University of Nebraska.
I want to be clear, because I’ve been asked about the idea that the University “can’t take a cut.” It is the Legislature’s job to decide what kind of future you want for Nebraska. The University will manage the consequences of whatever choices you make. I do want to be completely candid with you about what those consequences are. You have probably read news stories about the proposed cuts we’ve announced in the past few days and I will review those in a few moments.
First let me provide some of the history that has brought us to this point.
The budget proposal before you now represents the third cut to the University in roughly the past year. Under the Governor’s recommendation, our funding would be cut $11 million this year and $23 million next year. These represent one-third of the Governor’s proposed cuts, even though we make up only 13 percent of state spending. And they come on top of cuts we took last year which, combined with our unavoidable cost increases, created a shortfall of $46 million.
We have made difficult choices to close the gap. I would remind you that we have very few levers to pull when it comes to managing our budget. I have heard the suggestion, and I think this Committee has heard in testimony over the past few weeks, that the University has greater flexibility than other agencies in tapping alternative funding sources to deal with reductions in state dollars. That’s not accurate.
Certainly we are fortunate that the private sector has invested so generously in the University, and that our faculty attract federal research grants to support their work. But those dollars don’t pay for what you think of as the educational enterprise of the University. Donors invest in scholarships and initiatives that grow our state, not in utilities. Research grants support research; they can’t be used to keep an Extension office open or fix a leaky roof.
Our day-to-day operations are funded by two main sources: state funding and tuition. So in balancing a shortfall, we have had to turn to a mix of unappealing options.
First, we launched a University-wide Budget Response Team to re-think the way we do business. These teams have examined our operations in human resources, IT, facilities, energy, purchasing and a number of other areas. And they have done extraordinary work in finding $30 million in reductions.
In fact, maybe their work has been too good, because the difficulty resulting from these reductions isn’t always obvious. But we will lose more than 150 jobs in this process, and the truth is that rebuilding our operations requires diligence and time.
The best example I can give you is IT. We experience a billion attacks on our network every single day. We have to bat a thousand. Even as we collapse five IT teams into one, we can’t make a mistake. If cybercriminals get it right even once, we would have a security disaster on our hands.
Second, we made the difficult decision to increase tuition by 5.4 percent this year and 3.2 percent in 2018-19. Next year’s increase was intended to help students and families plan, but it was contingent upon no further reductions in state funding. Unfortunately, we will have to revisit that figure.
And these decisions come at a time when Nebraska’s future workforce demands greater accessibility to higher education, not less.
Every analysis I’ve seen shows that a college degree is the surest pathway there is to economic mobility. Do we really want to close that door for our young people? Do we want to price out kids just because they weren’t lucky enough to be born into a family of means? Is it wise to increase their student debt loads and make it harder for them to contribute to economic growth when they graduate?
That seems exactly the wrong message to send for an institution that was founded on the principle that a University education should be accessible not just to the wealthy, but to the sons and daughters of farmers and ranchers and middle-class families who dream of a better future for their children.
Third, we have used cash. As I testified to you last year, I have significant concerns about our cash position. One of the most important financial ratios that we monitor is days of cash on hand. This is a measure of operating flexibility and cushion. We dropped almost nine days’ cash between 2016 and 2017 as we dealt with previous budget cuts and we will drop additional days of cash during the next two years. That trend puts us in the company of Kansas and not many other of our peers and neighboring states. We are now more than 50 days’ of cash below the average among institutions that have the same bond rating as us.
That matters. Think of a bond rating as a report card grade for an institution’s financial strength. We are saving millions of dollars in financing costs when we issue bonds to build new buildings and renovate existing facilities. That, I fear, will change.
There is no question we will use more cash to manage additional budget cuts. Closing an academic program isn’t like shutting off a light. We have a responsibility to help students in the affected programs finish their degrees, and we have employment obligations with our faculty. We will have no choice but to cash-flow the process. We will do this even though Moody’s has warned us that sustained erosion of cash could lead to a bond rating downgrade and the cost increases that would result as a consequence.
When the Governor informed me of his proposed cuts, I convened University-wide leadership teams to begin discussing our options. Each chancellor was tasked with identifying programmatic cuts to reach the $23 million re-basing proposed by the Governor.
I can’t speak to all of the proposals today, because we have not had an opportunity to properly communicate with students, faculty, staff and stakeholders. But per Chairman Stinner’s request for as much detail as we can provide, I am prepared to tell you how we propose to address slightly more than $9 million of the reduction.
I want to note that each campus has unique processes that will be followed as part of our shared governance process. These are recommendations that various campus committees will vet and consider.
At UNL, the initial campus proposals include:
At UNMC, the initial campus proposals include:
At UNO, the initial campus proposals include:
And at UNK, initial campus proposals include:
It is difficult for me to capture the full impact of these cuts.
In numbers alone, they will impact approximately 100 FTEs. They will upend dozens of lives and they will reduce the number of people living in our communities, buying groceries at local stores, and sending their children to our schools.
Our momentum in producing 11,000 new graduates for the workforce each year will be impacted. We will have to work that much harder to maintain our record of returning six dollars for every one dollar you invest in us. We will have to retreat at the very time we are becoming a global powerhouse in feeding the world, keeping our warfighters safe and treating cancer.
If the numbers don’t resonate, let me try to articulate the very real ways these cuts will impact people in your backyards.
Earlier I mentioned that we are losing positions at the Buffett Cancer Center and the College of Public Health. Of all the academic health science centers in the country, we are ranked 11th overall and fourth in quality and safety of care. We are in essence the “safety net” hospital in Nebraska.
Yet cancer rates in our state are significantly higher than the national average.
We are the highest in the United States in age-adjusted prevalence of cancer in men and No. 14 among women. These are driven by unusually high rates of colorectal cancer, lymphoma, leukemia, brain tumors, esophageal cancer and kidney cancer.
It is particularly painful to know that Nebraska has one of the highest rates of pediatric cancer in the country and the second-highest rate of pediatric brain cancer. The incidence of childhood tumors in Nebraska has been increasing over the past decade.
We rank low in early cancer detection. We have been unable to provide adequate colorectal cancer screening. We are 16th-lowest in the country in mammographic screening. A direct result is an abnormally high incidence of breast cancer, particularly in young women.
And unlike in other parts of the country, the incidence of pancreatic cancer, bladder cancer, malignant skin tumors, liver cancer and thyroid cancer here are increasing – an alarming trend for our state.
I think most Nebraskans would consider these statistics unacceptable.
I point these facts out because the Fred & Pamela Buffett Cancer Center, the boldest public-private partnership in Nebraska history, has worked hard to obtain National Cancer Center Institute designation and is now poised to achieve the highest possible level, known as a Comprehensive National Cancer Center Institute.
This requires robust upstream research and treatment efforts in population health, which is primarily focused on the upstream determinants of causes, early detection, screening and treatment. We can’t achieve Comprehensive Cancer Center designation without hiring population health cancer researchers. But our current fiscal issues mean we can't afford to do that. That’s a huge negative for economic development in our state – and it will markedly impede our ability to recruit and retain faculty in the future.
Much more importantly, it’s a blow to every Nebraskan – and this is 1 out of every 2 of us – who will at some point in their lifetime hear the words, “You have cancer.”
Senators, we have some of the best cancer doctors in the nation right here in Nebraska who are working day and night to find answers to the statistics I just gave. But if we don’t invest, the numbers aren’t going to improve.
Meanwhile, more of our neighbors – more of our children – will die from this awful disease.
Cuts mean we have had to tell our UNK police chief that he must do the same work of keeping our kids safe with one less officer.
The cuts mean a $1 million hit to Concord, Nebraska, alone – not to mention the loss of an ag and extension lab that has done important work in driving innovation in our state’s No. 1 industry.
UNK has been playing baseball since 1906. With these cuts, that tradition will end.
The cuts mean less career services support for UNO students – the same young people we would hope to welcome into our workforce. And we will see decreased access to the Omaha business community for our business students.
With reduced support for our Offutt Air Force Base programs, our position as a national leader in serving the needs of military learners will be threatened.
Put simply, budget cuts mean that your University would be less able to contribute to the goal we all share to grow our state. They mean that the future of Nebraska – the future for our children and children’s children – looks different than it otherwise would.
And these are not the full scope of what we would be forced to do if you and the Legislature adopt the Governor’s proposal. The list I just gave you totals slightly more than $9 million. We would still have more than $14 million to go. The decisions won’t get any easier.
And when we consider the unavoidable cost increases coming in the next biennium, I don’t see an end to these extraordinarily painful conversations unless you, our elected leaders, decide that higher education, and all the individual and economic promises it brings, is a priority for Nebraska.
So today, I am asking you to limit future damage to your University and restore our base funding to $580 million in 2018-19. I am asking you to similarly restore funding for all of public higher education in Nebraska.
Everyone I’ve talked to is optimistic that the next revenue forecast will be brighter. Assuming that’s the case, shouldn’t we declare that higher education is worthy of investment? Aren’t our 53,000 students, our talented employees, our 187,000 alumni in the state, and our generous private partners important enough to wait before finalizing cuts that would halt our trajectory? Don’t we want to send the right message to the young people, the faculty and the companies we are trying to recruit in this hyper-competitive environment?
And even if the forecast doesn’t improve in February, wouldn’t a special legislative session in August or September, when we know more about the state’s financial picture, be preferable to imposing cuts now that would do long-term harm to the institutions that can help you grow our state out of this fiscal challenge?
Senators, I am asking you to make a choice about the future of Nebraska.
If we don’t figure out a way to grow our state, to provide opportunities for our children and grandchildren and compete in a global economy, we’re in trouble. There will be no money for tax relief, there will be no money for K-12 education, and there will be no dollars to help the people who need assistance. There are those who want to divide us, but we need to unify this state. The folks here today understand that there is a critical linkage between education, public-private partnerships and the future of Nebraska. We must work together, all of us, and chart a plan for growth.
The proposed cuts on top of the previous cuts are sending the wrong message at a time when Nebraska has great momentum. Even the headlines in the past several days are damaging our efforts not only in the recruitment and retention of students, athletes, researchers and faculty, but also in how Nebraska is viewed by those on the outside looking in. I hope you will decide that the University of Nebraska is a priority for our state.
Thank you for your time. I’d be pleased to respond to your questions.
President Bounds’ follow-up statement on Turning Point USA incident
President Bounds’ follow-up statement on Turning Point USA incident
August 29, 2017
Chancellor Green and I are continuing a thorough investigation of the incident that occurred on the UNL campus last Friday. After ensuring the safety of the student involved, we began our review. We take the incident seriously and our priority is gathering all of the facts. As soon as we have completed that process, we will take appropriate action.
Hank M. Bounds, Ph.D.
A message from President Bounds following NU’s Appropriations hearing
A message from President Bounds following NU’s Appropriations hearing
February 15, 2018
To the Students, Faculty and Staff of the University of Nebraska:
Perhaps it is appropriate that I write to you on the 149th anniversary of the University of Nebraska’s founding.
Our University was created to serve the people of Nebraska through education, research and outreach.
Yesterday, in a legislative hearing room filled to overflow with students, colleagues, partners in agriculture and business, and community members, I was reminded that our mission of opening the doors of opportunity for our fellow citizens is as important today as it was 149 years ago.
Those testifying to the Appropriations Committee in support of continued investment in the University included first-generation students, like our UNO student body president, Carlo Eby, who asked senators on behalf of our 53,000 students to send a message that they care about Nebraska’s young people.
“In our next 149 years, the University of Nebraska can be an even more powerful force of change and opportunity. But we can’t do it without continued partnership with the state.”
We heard from a young wife and mother from Elkhorn, a breast cancer survivor who recalled that watching the Fred & Pamela Buffett Cancer Center being built was like seeing “hope built from the ground to the sky” and asked legislators not to walk away from that commitment.
We heard from leaders in agriculture who spoke of the University’s indispensable role in driving innovation in Nebraska’s No. 1 industry and helping to feed a growing and hungry world.
We heard from business leaders who depend on the 11,000 graduates we produce each year to keep our workforce strong.
Listening to the testimonies, hearing our students’ stories, witnessing the remarkable show of support by a broad range of University stakeholders reaffirmed my belief that in our next 149 years we can be an even more powerful force of change and opportunity for people in Nebraska and around the world.
As we told Appropriations Committee members yesterday, however, we can’t do it without continued partnership with the state.
As you recall, the Governor has recommended an $11 million cut to our funding this year and a $23 million reduction to next year’s appropriation. When you consider that we have already taken steps to close the $46 million gap created in part by previous funding cuts – including $30 million in administrative reductions and two years of tuition increases – the Governor’s proposal creates a serious challenge for us.
Even if our request to legislators to restore our 2018-19 base funding is successful, rising costs mean we will still be forced to make reductions. All campuses have begun this process and this week rolled out painful proposals for cuts, including elimination of academic programs, job reductions and retreats from our statewide presence.
While they are still proposals, subject to shared governance processes and legislative decisions on our budget, they represent the scale and gravity of the decisions we are facing. Lives of our students and colleagues have been upended. We would retreat at the very time that our workforce demands more college graduates, not fewer, and when the needs of our citizens are as great as they have ever been.
As one example, Nebraska has the second-highest rate of pediatric brain cancer in the country. We have some of the best cancer researchers in the nation working to figure out why. But if we don’t invest, the numbers won’t improve.
It’s my hope that senators found our case to be as compelling as I did. The Appropriations Committee will now begin its deliberations and has until March 9 to advance a budget recommendation to the full Legislature.
We have asked senators to think with us about what kind of future we want for our children and grandchildren. Affordable, excellent higher education has been a tradition in Nebraska for almost a century and a half. We hope they will decide to make higher education a priority for Nebraska’s future.
Thank you for all you do for the University of Nebraska. It is a privilege to serve alongside you.
President Bounds’ statement on Turning Point USA incident
President Bounds’ statement on Turning Point USA incident
August 28, 2017
A number of Nebraskans have expressed concerns about the recent treatment of one of our students in a public space by a University of Nebraska faculty member. I have reviewed the incident in question. The behavior involved vulgar gestures and language that many people would consider offensive. It was unprofessional and not in keeping with the standards of conduct I expect from members of the University of Nebraska community.
I am a vigorous defender of free speech and I stand by the rights of all employees and students to express their opinions, no matter how provocative. I also believe that as educators, we have an especially high bar for responsibly exercising our First Amendment rights. We have the unique privilege of helping shape young minds, and everything we do is a teachable moment. In this case, we had an opportunity to model how differing opinions can be exchanged with civility, respect and dignity. It appears that opportunity was missed. I’m deeply troubled that a student has been treated this way. I will continue to support free speech, but we must allow for the healthy exchange of ideas without personal attacks, especially against young people who are our future.
Hank M. Bounds, Ph.D.