PREPARED BY: Suzanne Houlden
LB 551 DATE PREPARED: March 12, 2025
PHONE: 402-471-0057
Revision: 00
FISCAL NOTE
LEGISLATIVE FISCAL ANALYST ESTIMATE
ESTIMATE OF FISCAL IMPACT – STATE AGENCIES (See narrative for political subdivision estimates)
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS $8,120,333 $8,161,061
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS $8,120,333 $8,161,061
Any Fiscal Notes received from state agencies and political subdivisions are attached f ollowing the Legislative Fiscal Analyst Estimate.
If passed, LB 551 would prohibit future tenure appointments at the University of Nebraska (NU), Nebraska’ s State College system
(NSCS), an d the state’s six community colleges.
The community colleges report no fiscal impact to its six campuses.
NU and NSCS report both fiscal and operational issues if LB 551 were to pass. The operational risk is that it would be difficult to hire
and retain qualified faculty at all campuses. NU reports the risk of losing its academic membership in the Big Ten conference, along
with the risk of not being allowed re-admission into the Association of American Universities (AAU). NU further expresses the likelihood
of litigation by current tenure-track faculty and faculty collective bargaining units.
The fiscal notes submitted by NU and NSCS explain that institutions without tenure systems often need to compensate for this lost
benefit through increased salari es.
While the potential litigation costs cannot be determined at this time, both NU and NSCS have provided their calculations of the cost to
retain current faculty and address expected faculty shortages.
NSCS calculated its projected cost using data obtained through College and University Professional Association for Human Resources
(CUPA). NU estimated a 15% increase to the salaries of current tenure -track faculty members, with related benefit costs. Costs not
included in the chart below are expenses related to potential litigation, or of potential extramural funding (e.g. federal or private grants
and contributions), which cannot be determined at this time.
In its fiscal note response, NSCS specifically requests a deficit General Fund appropriation to address the expected increase in salary
expense, and General Fund appropriation for the upcoming biennium. NU’s request for incremental funding is implied. The chart below
includes the total impact calculated by fund type for NU, but non-General Funds wou ld be omitted from an A-bill.
Salary & Benefit estimates
Fund type FY26 FY27
General Fund - NSCS $1,357,603 $1,398,331
General Fund - NU $6,762,730 $6,762,730
Cash Fund - NU $3,838,306 $3,838,306
Federal Fund - NU $731,106 $731,106
Other Funds - NU $6,945,507 $6,945,507
Total $12,689,745 $12,730,473
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 551 AM: AGENCY/POLT. SUB: Nebraska State College System
REVIEWED BY: Kimberly Burns DATE: 01/31/2025 PHONE: (402) 471-4171
COMMENTS: The Nebraska State College System’s assessment of fiscal impact appears reasonable based on the
assumptions provided.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & P OLT. SUB. RESPONSE
LB: 551 AM: AGENCY/POLT. SUB: Nebraska Community College Association
REVIEWED BY: Kimberly Burns DATE: 01/31/2025 PHONE: (402) 471-4171
COMMENTS: Concur with the Nebraska Community College Association’s assessment of no fiscal impact from LB 551.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 551 AM: AGENCY/POLT. SUB: University of Nebraska System
REVIEWED BY: Kimberly Burns DATE: 02/13/2025 PHONE: (402) 471-4171
COMMENTS: The University of Nebraska System’s assessment of fiscal impact related to salary base plus benefits for
tenure track faculty members seems reasonable. No basis to dispute the potential indeterminate impacts identified.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AG ENCY & POLT. SUB. RESPONSE
LB: 551 AM: AGENCY/POLT. SUB: Coordinating Commission for Postsecondary Education
REVIEWED BY: Kimberly Burns DATE: 02/07/2025 PHONE: (402) 471-4171
COMMENTS: Concur with the Coordinating Commission for Postsecondary Education’s estimate of no fiscal impact
from LB 551.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 551 AM: AGENCY/POLT. SUB: Metropolitan Community College
REVIEWED BY: Kimberly Burns DATE: 02/03/2025 PHONE: (402) 471-4171
COMMENTS: Concur with Metropolitan Community College’s estimate of no fiscal impact from LB 551.
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 551 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Nebraska Community College Association
Prepared by:
(3) Courtney Wittstruck Date Prepared:
(4)
Jan. 24, 2025 Phone:
(5)
402-471-4685
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate:
No expected fiscal impact.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Benefits………………………………...……
Operating………………………… ...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 551 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Nebraska State College System
Prepared by:
(3) Brenda Owen Date Prepared:
(4)
1-29-25 Phone:
(5)
471-2507
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
$1,357,603 $1,398,331
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
$1,357,603 $1,398,331
Explanation of Estimate:
The Nebraska State Colleges would face a structural challenge in faculty recruitment if they were no longer able to offer
tenure-track appointments. Data from the College and University Professional Association for Human Resources (CUPA)
indicate that the median salary for an instructor at peer institutions is $59,729, while the median salary for an assistant
professor on a tenure track is $71,741. We would estimate this $12,012 differential to reflect the additional value placed
on tenure eligibility.
If tenure were no longer an option at the State Colleges, salary adjustments would be necessary to ensure competitiveness
in hiring qualified faculty. Based on CUPA data, institutions without tenure systems often need to compensate for this lost
benefit through increased salaries. A salary adjustment of up to 20% - or approximately $11,946 - would be required to
attract candidates at a level consistent with tenure-track assistant professor appointments at peer institutions.
Without such adjustments, the State Colleges risk losing strong candidates to institutions that can offer both tenure and
higher salaries. This deficit request seeks funding to close this gap, ensuring that the Nebraska State Colleges remain
competitive in faculty recruitment and retention, maintaining the quality of instruction necessary to serve students
effectively.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Tenure Track Faculty 88 88 $1,171,155 $1,206,290
Benefits………………………………...…… $186,448 $192,041
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… ..... $1,357,603 $1,398,331
0551Prohibit tenure at certain postsecondary educational institutions and
require a written policy regarding terms and conditions of employment
__________________________________
EXPENDITURESEXPENDITURES
NUMBER OF POSITIONS
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1)
FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
University of Nebraska System
Prepared by:
(3)
Anne Barnes Date Prepared:
(4)
02/03/2025 Phone:
(5)
(402) 559-6300
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025 - 26 FY 2026 - 27
EXPENDITURES REVENUE
GENERAL FUNDS
6,762,730.00 0.00
CASH FUNDS
3,838,306.00 0.00
FEDERAL FUNDS
731,106.00 0.00
OTHER FUNDS
6,945,507.00 0.00
TOTAL FUNDS
18,277,649.00 0.00
EXPENDITURES REVENUE
6,762,730.00 0.00
3,838,306.00 0.00
731,106.00 0.00
6,945,507.00 0.00
18,277,649.00 0.00
Explanation of Estimate:
If passed, LB 551 would prohibit future tenure appointments at the University of Nebraska. This could lead to the loss of successful tenure track
faculty and challenges to recruiting new faculty who may look to go to other universities that grant tenure, handcuffing the University's ability to
compete with the best Universities across the country. Additionally, if passed, LB 551 would jeopardize UNL#s membership in the Big 10, future
aspirations of rejoining the AAU, and extramural funding (federal and private grants, private contributions, etc.).
We believe the passage of LB 551 would likely result in litigation with current tenure track faculty members and the faculty collective bargaining units
at UNO and UNK. The amount of potential litigation costs is unknown.
Additionally, if tenure is no longer available, we believe that salaries and related benefits would need to be increased to attract and retain faculty
employees. We would roughly estimate the cost to be approximately $18,277,649 in FY 26 and FY 27. This estimate is based on a 15% salary
increase to the 2024-25 salary base for tenure track faculty members, plus associated benefit costs (increases in employer retirement plan
contributions and FICA).
With so many unknown variables, we cannot estimate the full fiscal impact of the potential faculty loss.
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
Benefits..............................................
Operating...........................................
Travel.................................................
Capital outlay....................................
Aid...................................................
Capital improvements........................
TOTAL......................................
25 - 26
0
0
26 - 27
0
0
2025 - 26
15,804,279.00
2,473,370.00
18,277,649.00
2026 - 27
15,804,279.00
2,473,370.00
18,277,649.00 Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 551 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Metropolitan Community College
Prepared by:
(3) Brenda Schumacher Date Prepared:
(4)
1/29/2025 Phone:
(5)
(531)622-2406
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
0 0 0 0
CASH FUNDS
0 0 0 0
FEDERAL FUNDS
0 0 0 0
OTHER FUNDS
0 0 0 0
TOTAL FUNDS
0 0 0 0
Explanation of Estimate
MCC believes that this bill would not have any financial impact.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………… ……...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 551 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Coordinating Commission for Postsecondary Education
Prepared by:
(3) Gary Timm Date Prepared:
(4)
1/23/2025 Phone:
(5)
402.471.0020
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate:
No fiscal impact
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements………… …………...
TOTAL……………………………… .....