The Nebraska Legislature’s Appropriations Committee voted to recommend a 1.25% increase in state funding for the University of Nebraska system. The increase will bring an additional $17.6 million in state dollars to the system for the next fiscal year.
Jeffrey Gold, president of the University of Nebraska system, and the University’s government relations team have been meeting with members of the Legislature to inform them of the challenges created by cutting state funding for the University system.
“Most of that was President Gold, with the governor, just talking about the significant impact that the initial 2% cut was going to be, and how that was such a huge impact on the University system, and the value that the University brings as an economic engine to our state,” said Stan Clouse, State Senator for Kearney and District 37.
This decision goes back on Gov. Jim Pillen’s plan to cut 2.07% in funding for the University to combat the state’s $289 million budget shortfall for the 2025-2026 fiscal year. The measures Pillen recommended would have decreased the University system’s budget by approximately $31.5 million across the next biennium.
The measures in Pillen’s January recommendation included a 2.07% reduction in state funding for the NU system, the removal of the University’s $11 million share of the Nebraska Tobacco Settlement Biomedical Research Fund and the preservation of statutory tuition waivers that cost the University $6.25 million annually.
The preliminary decision of the appropriations committee was to adopt the 2.07% cut to the University system in agreement with Pillen. The University received $717 million in state appropriations for the current fiscal year.
Last spring, UNK cut 24.5 faculty positions and nine academic degrees in response to the system’s projected $58 million budget shortfall for the 2024-2025 fiscal year. UNK was facing a $4.3 million budget deficit, and the faculty and program eliminations saved $2.3 million, with the other $2 million identified through other departments.
“The University has been tightening their belt for the last number of years,” Clouse said. “And so, you get to the point that eventually it’s going to result in some pretty significant cuts.”
Paul Kenney, chairperson of the Board of Regents, said a 2.07% decrease in state funding would equate to the termination of almost 70 employees. He also said that under the governor’s budget, the Board of Regents will have to hold discussions on raising tuition and cutting programs.
Gold said state and federal funding cuts could force the University system to evaluate what programs are offered by multiple campuses and eliminate those programs on certain campuses.
“We’ll do what we can do to decrease where we can,” Kenney said. “It’s a tough thing for us to do, but we’ll play with the cards we’re dealt with.”
A 1.25% increase is an improvement on the state side, but University officials were originally seeking a 3.5% increase in state funding.
In August 2024, the Board of Regents approved a 3.5% increase in state-aided funding with consultation from the governor’s office, which would equate to about $50 million over two years.
A request for this funding was sent to the Coordinating Commission of Public Higher Education, which outlines a series of budget requests for the University system and transmits it to the state fiscal officers.
The governor’s office reviews requests from all the agencies receiving state funding and creates its own recommendations for the biennial budget for the appropriations committee.
The state’s economic forecasting board determines what funds are available to be appropriated to different agencies across the state. The amount the appropriations committee can spend is limited to the forecast of funds available.
When reviewing the budget, the priorities of the appropriations committee are to sustain funding for agencies that are essential to the oversight of the state, such as road maintenance and prison functioning.
The appropriations committee is required to send a balanced budget to the floor at the end of the 90-day legislative session.
The appropriations committee held agency hearings for each of the 75 agencies that receive appropriations from the state. This is where agencies have an opportunity to discuss their various budget items and advocate for the committee to consider their requests. The University of Nebraska is Agency 51.
On Feb. 25, the Nebraska Appropriations Committee held a hearing where administrators, regents and supporters of the Nebraska University system advocated for the state government to increase its appropriations to the University system instead of Pillen’s proposed decrease.
Among those who testified were Jeffrey Gold, president of the NU system, Paul Kenney, chairperson of the Board of Regents, Bri Hoffman, co-founder and Board Chair of the Team Jack Foundation, and Dr. Joann Sweasy, director of the Eppley Institute for Research in Cancer and Allied Diseases at the University of Nebraska Medical Center.
“The point of it really is to share what the University needs, how well those funds will be used and what the return on that investment will be to the people of the state of Nebraska,” Gold said. “At the end of the day, we are asking for Nebraska taxpayer dollars to be provided to the University.”
Hoffman testified to the importance of the University’s research, specifically in the pediatric cancer field. The Team Jack organization plays a role in funding pediatric cancer research and clinical trials at UNMC.
“We’re working our tails off to try to raise money for research,” Hoffman said. “We need help.”
The federal government allocates 4% of the National Cancer Institute to pediatrics. The proposed cuts by the state will not affect Team Jack’s work, but Hoffman said it will set back research in the field.
Hoffman’s son, Jack, was a student at UNK during the fall 2024 semester. He died in January after a lifelong battle with pediatric brain cancer. Jack’s battle inspired his parents to start the Team Jack Foundation in 2011. Hoffman’s husband, Andy, also died from a brain tumor in 2021.
“I have a son that died of a pediatric brain tumor and a husband that died of a pediatric brain tumor,” Hoffman said. “I’ve been told that it’s not related, but you know another doctor said maybe there’s something we haven’t discovered yet. So, there’s so much research to be done in this field.”
Sweasy said the funding from the state allows UNMC to recruit the best scientists, clinicians and researchers to Nebraska, and help the University of Nebraska become prominent nationally as a research institution in many fields.
“We need the research to work towards better cures for cancer and other diseases like Alzheimer’s, Parkinson’s, etc., which is what UNMC is known for,” Sweasy said.
The committee is finalizing its budget recommendations that will be voted on by the full Legislature on day 70 of the legislative session, which falls on April 29. The Legislature will debate on the proposed budget and pass a final budget within 10 legislative days of this vote. Clements said by May 15, the final budget will be approved.
Clouse said the committee is putting together the budget based on a 1.25% increase to the University system.
Sen. Robert Clements, chair of the appropriations committee, said they are still short on funds.
“We’re holding almost all of our state budgets down, because we still have, currently, $289 million of shortfall to come up with,” Clements said.
The committee is using a “last-in-first-out” approach to target newer initiatives and reduce expenditures. Legislative Bill 650, a package of bills pieced together by the Revenue Committee, is expected to save $71 million in state spending over the biennium by cutting 12 tax incentives and credit programs. This proposal is in the second of three rounds of debate by the Legislature.
The committee’s budget is subject to the governor’s vetoes. Pillen has line-item veto, meaning he can sign the budget, or he can reduce and eliminate items recommended before signing.
The budget will go into effect at the beginning of the next fiscal year, which will begin on July 1 and go until June 30, 2027.
When the budget is final, the chancellors of each institution in the University system will begin making decisions about tuition and other investments.
Even with the increase in state funding, the University system is still facing up to $178 million in cuts in federal funding.
“For us to be dealing with the state stuff and the Federal stuff simultaneously creates a double-edged sword,” Gold said. “I spend part of my day every day, almost seven days a week, either in the capital or visiting with state senators or the governor’s office.”
President Donald Trump’s administration has been cutting back federal funding across several departments. Trump created the Department of Government Efficiency, led by Tesla CEO Elon Musk, which is tasked with reducing federal spending.
There were 10 federal grants terminated from Jan. 22 to Feb. 27. The grants awarded to the University system totaled $15.4 million from 2021 to 2024, and approximately $8 million will be lost for unfinished work.
The grants terminated were $4.7 million from the U.S. Department of State for student exchange programs with Serbia, Montenegro, southeast Asia and Egypt; $9 million from USAID for Feed the Future Irrigation and Mechanization Innovation Lab, early childhood healthcare, vision care in West Africa and antibacterial drug delivery; $1.1 million from the U.S. Department of Education Institute of Education Sciences for Project RAICES training teachers; and $250,000 from the National Institute of Health for the tribal summer science program.
The University system has also had seven federal grants placed on pause from Jan. 24 to Feb. 12 with a value of $1.5 million.
The grants paused include $813,000 from the U.S. Department of State for study abroad and student exchanges and pathogens of concern in Egypt; $139,360 from the U.S. Department of Treasury for mental health clinician stipends; and $592,500 from USDA for crash-tested bridge railings on wooden bridges.
The National Institute of Health Facilities and Administrative rate has been capped at 15% of each grant awarded to biomedical research institutions across the nation. The Facilities and Administrative rate is not a source of revenue, but it is a mechanism used to reimburse research institutions, such as the University of Nebraska, for the infrastructure support costs associated with their sponsored work.
The University of Nebraska system had a 53% reimbursement rate prior to the policy change. Gold said the University system would have to absorb more than $27 million a year to sustain its current research and facilities.
The NIH said this policy would save more than $4 billion annually.
The Facilities and Administrative costs reduction is currently under injunction following a temporary restraining order filed by 22 state attorney generals against the NIH. Judge Angel Kelley of the United States District Court for the District of Massachusetts has expanded the block nationwide.
“It will be devastating for all biomedical research supported by the National Institute of Health,” Gold said. “Literally billions of dollars of cuts in research across the country.”
Federal agencies have not released new requests for research grant proposals, and grant review study sections have been cancelled. Gold said these actions cost an ongoing loss in research funding of an average of $52 million per month beginning in January.
In March, Congress passed the Full-Year Continuing Appropriations and Extensions Act, which successfully averted a government shutdown.
Gold said $40 to $66 million in funding for the University of Nebraska will be eliminated through the passage of this bill. The act extends funding levels from the 2024 fiscal year but reduces non-defense funding and increases defense spending and immigration enforcement funds.
“Having made the state legislature aware of what is going on federally impacting the University gives them some pause as to how much they can actually cut from us,” Gold said. “Then again, the state is facing significant challenges as well.”
