At the June 2025 Quarterly Board of Regents meeting, the Board voted to suspend the merit pay policy for the next biennium. Citing the continued cost of funding the historic COLAs awarded the previous biennium, institutional budget officers noted continued inability to address ongoing budget deficits and therefore inability to budget for merit increases with current revenue projections. NSHE noted that even with the one-shot state appropriations, this bridge funding would not be included in any increased state operating base budgets going forward. NSHE Chris Viton noted that all the institution budget officers were in agreement and had already agreed to this proposal before the NSHE Legislative Budget close. No institution President commented one way or the other about this agenda item. Similarly, this agenda item was not mentioned in the Chair of the Senate Chairs Council report.
NFA gave comment in the meeting that institutions should have come forward sooner to ask for suspension of the policy if they did not believe they had the budget for it; we pointed out that it was clear institutions made no effort to prioritize merit in their biennial budget planning (a point that Board Chair Carvalho underscored). There was some movement from Regents to look at this issue in case funding might allow for merit in fiscal year 2027, but without increases in student fees or some other revenue stream, faculty compensation might yet be left at the bottom of the priorities list.
NFA also addressed the Board regarding whether NSHE institutions could afford the 1% performance pay policy. AB568 provides $29 million/year in funding for the COLAs from FY2024 and FY2025. Caseload growth was funded except for a new inflation increment. The legislature appropriated $11.9 million/year for increased utilities costs which releases funds diverted from academic programs, and the state funded 100% of fringe rate increases. The extra 5% increase in student fees adds $16 million/year beginning in FY2025 is continuing, and scheduled increases in student fees add another $25 million/year for FY2027 and beyond. There are no faculty COLAs for FY2026 and FY2027. The current round of performance pay would cost about $7.4 million/year statewide in the state-supported budgets. A former chancellor once said a 1% salary adjustment was “budget dust”. Even while academic programs were cut and positions held vacant, the presidents managed to find money for Administrators–between November 2023 and November 2024 alone, NSHE executive and upper management compensation increased by about $6 million in excess of the 11% COLAs. So yes, NSHE can afford the 1% faculty merit pool. This is not a bad budget year that would require suspension of the merit policy, which was approved by the Regents to address salary compression and high faculty attrition. The Board decided to cancel faculty merit pay anyway.
NFA reminded the Regents that issues such as merit is not simply because faculty "deserve" it. As state employees, we see our pay decreased, benefits reduced, and benefits in retirement taken away to balance the state budget. Without advocating for our salary, we cannot plan for our futures.
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