The University of Nebraska System must absorb a state funding cut of more than $36 million in the fiscal year that just began, after Gov. Jim Pillen (R) directed all state agencies, boards, and commissions to reduce spending effective July 1.

The order, issued in a July 8 memo, responds to Nebraska income tax refunds that exceeded projections by $307 million in fiscal year 2026, leaving the state with a budget hole it now expects agencies (including its university system) to help fill.

NU System President Jeffrey P. Gold, MD, told faculty and staff in a Friday message that the cut arrived a little over two months after the Legislature adjourned and just weeks after the Board of Regents approved a 2026-27 state-aided budget that already included an $8 million annual spending reduction. "I want to be clear: What the governor's office is asking of us is significant," Gold wrote.

What The Governor's Memo Requires

Pillen's directive orders four immediate measures:

1. No positions may be created or refilled without approval from the State Budget Division (law enforcement and correctional officers are exempt)
2. Monthly allotments will be reduced by at least 5% in aggregate for fiscal year 2026-27
3. Agencies must submit monthly cash flow projections
4. Spending reduction plans are due to the State Budget Division by July 31.

The memo also calls for cuts to travel, membership dues, technology upgrades, and equipment purchases, and tells agencies to prepare for reduced appropriations. The university manages its own position control process, and Gold said further hiring instructions are forthcoming.

Years Of Cuts Are Catching Up

The NU System (which includes campuses in Lincoln, Omaha, and Kearney plus the University of Nebraska Medical Center) has cut budgets every year for the past several years.

Recent rounds eliminated academic programs at the flagship Lincoln campus and at Kearney, and contributed to a faculty no-confidence vote in former UNL Chancellor Rodney Bennett, who left the university shortly after. Omaha managed to trim $1.9 million without cutting academic programs.

"We cannot cut our way to extraordinary, nor can we fully realize our mission of exceptional teaching, research and statewide engagement if we are operating in a constant cycle of cuts and related restrictions, without the ability to predict even a single year of stability," Gold wrote.

How This Connects

Nebraska is the latest example of state budget stress landing on public university students. Minnesota lawmakers left a $131 million student aid shortfall unfixed this year, threatening grants for 88,000 students, while UConn has held tuition flat even as state funding fell to 14% of its budget. When state support shrinks, students typically pick up the difference through tuition increases, larger class sizes, or fewer program options — a real concern for Nebraska families weighing student loans and financial aid options in the state.

The university is negotiating with the governor's office over how the directives apply to NU, and system and campus budget teams are drafting implementation plans ahead of the July 31 deadline. The Nebraska Legislature won't take up deficit budget adjustments until it convenes in January 2027, meaning more cuts could still be coming.

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