Dear Colleagues,
I want to provide an update regarding the Governor's recent budget directive and what it means for the Nebraska State College System.
As many of you are aware, the Governor has directed state agencies to reduce FY27 expenditures by five percent. Unless the Legislature modifies or rejects these reductions when it reconvenes in January, the current expectation is that our state appropriation for FY27 will be reduced accordingly.
Our leadership teams are actively evaluating a range of options to respond to this directive. Our highest priority is to preserve the exceptional educational experience our students expect while maintaining our focus on teaching, learning, and student success. To the greatest extent possible, we intend to address this challenge through one-time savings, prudent fiscal management, and careful stewardship of our financial resources for the remainder of the fiscal year. However, since this year’s fiscal challenges for the state are expected to continue into the next biennial budget cycle, the need to explore and evaluate potential opportunities to reduce our budgets long-term is warranted.
As we move through the coming months, fiscal responsibility will be more important than ever. Every expenditure should be thoughtfully considered, and we encourage all employees to look for opportunities to reduce discretionary spending and maximize the efficient use of existing resources. While no single action will solve this challenge, our collective commitment to responsible financial management will help position us for long-term success.
While this development is disappointing, it is important to recognize how much we have accomplished together. Earlier this year, through the collective efforts of our campuses, Board of Trustees, and many external partners, we successfully avoided nearly $8 million in proposed reductions during the biennial budget process. Based on the information available at that time, the Board approved tuition and fee rates and adopted balanced FY27 operating budgets during its June meeting.
Unfortunately, the state's fiscal outlook has continued to soften. General Fund revenues have now fallen below forecast for four consecutive months, reflecting the same financial conditions that prompted the Nebraska Economic Forecasting Advisory Board to lower its revenue projections in April and ultimately shaped the budget enacted during the 2026 legislative session. The Governor's directive is a response to these ongoing statewide revenue challenges.
Although this presents another unexpected hurdle, our System has consistently demonstrated its ability to navigate challenges with resilience, collaboration, and a steadfast commitment to our mission. We will continue working closely with campus leadership to identify thoughtful and responsible solutions, communicate openly as additional information becomes available, and advocate for the resources needed to support our students and the vital role the State Colleges play in Nebraska's future.
Thank you for your continued dedication, flexibility, and commitment to our students and one another. Your professionalism and careful stewardship of our resources are essential as we work through this period together. We will keep you informed as our planning progresses and as additional guidance becomes available.
Sincerely,
Paul Turman, PhD
Chancellor
