The University of Nebraska-Lincoln plans to start budgeting with a more businesslike approach next year, measuring academic programs’ revenues and expenses.

University administrators here and elsewhere say they must be more financially aware and “transparent,” to use the popular word, in this era of flat state funding, worries over enrollment trends and questions about how well higher education prepares students for careers and serves the workforce.

Leaders of the UNL initiative say the change doesn’t mean that programs will be slashed or that the institution will become a trade school. But the new budget strategy, called an incentive-based budget, gives college deans at UNL more authority over their own revenue and costs. And it calls on professors to be more innovative to bolster enrollment.

For the most part, faculty members say they trust the process and the administration.

“I think this will be a positive for the university,” UNL Faculty Senate President Kevin Hanrahan said. “We’re in agreement that we have to do something.”

At the same time, faculty members are apprehensive “because this is going to bring about change, no doubt,” Hanrahan said. “We also don’t want to go too far.”

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Sarah Zuckerman, an assistant professor in UNL’s department of educational administration, said her discipline isn’t a profit-maker. “Nor should it be. ... My department plays a key role in serving the state of Nebraska’s public school system by providing highly trained school leaders.”

Zuckerman, who said she only speaks for herself and not her department, added: “I fear any effort to turn an institution that serves the common good into a corporation.”

UNL administrators say it’s not about making profits or going corporate. The land-grant mission of teaching, research and service remains, they say.

Hanrahan, a voice professor in the College of Fine and Performing Arts, is in the kind of discipline in which professors worry about how they will fare under incentive-based budgeting. Hanrahan said he has numerous one-on-one voice sessions with students, as well as one course per semester on “vocal pedagogy,” or teaching, that can attract anywhere from eight to 25 students.

The low student-faculty ratio of voice lessons and of doctoral programs in many fields isn’t designed to make more money than they cost. “We like to have music in our world,” he said. “Those things are never going to be self-supporting.”

Kathy Farrell, dean of UNL’s College of Business, said the incentive-based budgeting will not require colleges and programs to be moneymakers. There will be money to support the university’s strategic priorities and funds built in to support the classics, music, fine arts, engineering and other expensive programs, Farrell said.

In rare instances, Farrell said, universities have required colleges or programs to balance budgets without subsidies. That will not be the model used by UNL, she said.

Nevertheless, more responsibility will rest with the college deans. “It makes you think about things in a different way,” she said.

The existing budget system involves a top-down allocation, bumping colleges’ funding up or down based on the university’s overall state money and enrollment.

Under the new system, deans may get help with high-cost programs but will also be “taxed” for the space they consume, library services, university administrative costs and other overhead.

The new system is expected to take effect on July 1, 2020. The brainstorming, studying, committee work and expert consultations have been going on for about three years. A steering committee of administrators, professors and staffers has taken the lead this year.

Some programs will be bolstered through creativity, said Bill Nunez, UNL’s vice chancellor for business and finance. Nunez and Farrell are co-chairs of the steering committee.

For instance, UNL geography, once marked for elimination, lives on after teaming up with global studies and the department of anthropology.

Nunez said there is no question that UNL will continue to value theater, philosophy, classics and other programs that don’t necessarily generate big numbers of students or dollars. The goal is for deans to have a greater sense of fiscal responsibility, Nunez said.

Information from Huron, a Chicago-based consulting group, indicates that budget redesigns started in 1974 at the University of Pennsylvania. But over the past 10 years, more and more institutions have changed how they budget, Huron said. They include Iowa State, South Dakota, Kansas, Kansas State and Wyoming, Huron reported.

Andrew Laws, managing director in education at Huron, said he is personally aware of about 65 universities moving to incentive-based budgeting over the past few years. Laws, who has written a book on the topic, said only two that changed went back to the original form of budgeting.

And those two — South Carolina and Vanderbilt — have since returned to incentive-based budgeting, he said.

The University of South Dakota, which moved to incentive-based budgeting about six years ago, hasn’t closed many, if any, programs, said Robert Turner, chairman of the University Senate.

“It works OK,” said Turner, an associate professor of Spanish. “I’m not a superfan, but I don’t hate it.”

Student demand has led to a program in environmental sustainability, Turner said. And starting next fall, there will be classes in Spanish for legal professions and masterworks of Spanish, a new version of the unattractively named Intro to Literature 335.

Faculty members at South Dakota haven’t seen radical changes, Turner said. It’s hard to argue that professors should not have a role in actively recruiting students into their programs, he said.

Laws said incentive-based budgeting might lead to the creation of classes in “the history of rock ‘n’ roll” or “the history of hip-hop.” And if they draw large enrollments, then those classes can help support a Russian literature class, he said.

A university offers an academic program for two reasons, he said — its profitability and the fact that it’s critical to the mission. Incentive-based budgeting, he said, helps universities think about the balance between those two.