Nebraska tax revenue drops, forcing NSCS budget cut

The State of Nebraska tax revenues have fallen below the projected levels due to the agricultural portion of the economy not flourishing as it has in the past several years, according to Nebraska State College System Chancellor Stan Carpenter.
Funds are projected to be about $900 million short of the 2017-19 state biennium budget.
The biennium budget has two components. First the governor will propose a budget, then the Nebraska State Legislature will propose one. After deliberations, a final budget will be voted on by the legislature.
The Nebraska Economic Forecasting Advisory Board updated the forecast of revenues through the 2018-19 fiscal year, and announced the near $1 billion shortfall.
According to Carpenter, there is a possible 4 percent decrease in general fund appropriations from the state for the 2016-2017 fiscal year, ending June 30, 2017, depending on the state legislature’s decision when they get back in session in January 2017.
Carpenter said the State of Nebraska provides about 60-64 percent of the general fund and tuition provides the rest.
“The governor has sent a message to all state agencies and to all independent organizations, like us (NSCS), saying, ‘I am urging you to use spending restraint and I am going to withhold 1 percent of your appropriation each quarter,’” Carpenter said. “So, that adds up to a 4 percent cut. That will have to be ratified by the legislature and I suspect it will be. We are moving forward now, assuming that that is going to be the case.
“It is now fairly certain that there will be mid-year budget cuts for the current fiscal year (FY 2016-17) and there is a very real potential that there will be little or no additional general funds provided to the NSCS for the upcoming biennium (FY 2017-18 and FY 2018-19),” an email sent from Carpenter Thursday, Dec. 1 states.
In a normal process, the NSCS would ask for an increase in funds from the state each year, but for the next two years of the biennium, the NSCS will begin at a lower base of at least the 4 percent cut, according to Carpenter.
In response, CSC President Randy Rhine has asked that CSC departments reduce spending for the remainder of the fiscal year by 25 percent in operations, travel, major equipment, and contracted services.
A 25 percent budget reduction over the next seven months is estimated to save $778,123. According to the email that Rhine sent, Thursday, Dec. 1, that “should cover” the 4 percent decrease of the budget.
“We haven’t made any decision on it but I think we would be hard pressed not to have a tuition increase, given the circumstances in which we find ourselves,” Carpenter said. “The (NSCS) Board generally will act on that sometime in the spring at one of our spring meetings. I’m guessing we won’t know what that’s going to be until after the legislature has made its decision on the appropriation level because that will have an impact on tuition.”
The tuition for the spring 2017 semester would not be affected, Carpenter said.
Carpenter said he does not foresee any employee terminations, pay cuts, or program cuts, but he said no decisions have been made and, “If things progress as we fear they might, everything is going to be on the table, kind of.”
He said the NSCS goal will be to protect employee positions, if possible, and he doesn’t predict program cuts because they want to make sure they continue to serve the students and provide them with a “very high-quality educational product.”
In relation with the budget up in the air, Rhine clarified Tuesday that the budget cuts will not affect the capital improvement project to the football stadium. According to Rhine, the funds for that project are “in hand” and construction will begin after the 2017 football season and will be completed by August 2018, before the football season starts.
But, the Math and Science building is still up for improvements, and Rhine said Tuesday that he did not want to speculate if the budget cuts would affect the funds allotted for the construction project.
Rhine said that CSC will ask the legislature for the funds but must wait until the next session, which convenes Jan. 4, 2017.
“It is our No. 1 construction project right now,” Rhine said. “It will remain our priority and we will continue to seek funding.”
Rhine also said that clubs on campus and Student Senate should not be affected by the reduction because student fees provide the budget for Student Senate.
“We don’t know for certain what is going to happen,” Rhine said. “We are going to watch it like everyone else and see what happens.”
Gov. Pete Ricketts did not respond to messages by press time.