Northern Illinois University Office of the President

Dear colleagues:

As you know, our NIU community has been working diligently for the past few years to present a balanced budget plan for fiscal year 2026 (FY26) to our Board of Trustees, and we will do so at its Thursday, June 12 meeting. So first and foremost, I want to begin by sincerely thanking faculty and staff for your many contributions.

For FY26, NIU shifted away from incremental budgeting and instead used a variant of “zero-based budgeting” to establish a structurally balanced budget. Together we have collaboratively built a budget from the ground up while targeting a significant overall reduction, as outlined in our 2025 university goals, through prioritization, realistic revenue growth, and strategic reductions.

The proposed FY26 budget honors the feedback received from our university community during our inclusive budget planning and development process. The university’s executive and academic leaders, as well as the 2022 Budget Planning Resource Group Report, the President’s Budget Roundtable, the Ad-Hoc Resource, Space and Budget Committee, and the Academic Planning Council, advised Provost Elish-Piper, Vice President Middlemist and me to make decisions that are strategic, difficult and even unpopular to preserve the important mission of our university in a sustainable way.

Positioning NIU for sustainability

Over the past decade, NIU has faced declining resources and significant operational challenges, including the Illinois budget impasse and the COVID-19 pandemic. Only two years ago, our budget deficit was over $32 million.

To navigate strong headwinds and position our university for continued success and long-term sustainability, NIU committed to setting annual budgets that are academically responsive and fiscally responsible; student-centric and equity-minded; reflective of ongoing investment in faculty and staff; and aligned with our mission, vision and values. At the direction of the Board of Trustees, and in alignment with expectations from our Higher Learning Commission accreditors, the university also committed to reducing the budget deficit by half in FY25, and to achieving a structurally balanced budget in FY26.

During FY25, we have been able to cut the deficit by more than half (exceeding our goal) by managing recurring revenues and expenses, increasing revenue generation and reallocating existing resources. Our balanced spending plan for the coming year — which includes $442.5 million in projected spending against $442.5 million in anticipated revenues — represents another key step in addressing the significant structural deficit.

FY26 budget

The proposed FY26 balanced budget is based on known or anticipated factors such as the inflation forecast, as well as projected student enrollment based on recruitment, retention and graduation trends. It does not reflect unknown factors such as the emerging or unpredictable challenges at the federal and state level. If these or other external factors impact our university’s financial outlook, the university will need to take further actions to achieve the proposed budget. This will mean reducing expenses and growing additional revenue where possible during the year to meet our budget targets.

The FY26 internal spending plan:

Projects a level of funding for state appropriations at $103.69 million. The state appropriation includes a 1% increase from FY25 and an additional 2% increase that can be spent with approval from the governor. It’s important to note that federal actions could impact Illinois’ revenue and the state’s ability to provide that additional increase.
Reflects approved tuition and fee rates set by the Board of Trustees.
Maintains planned commitments for financial aid and scholarships for students, including AIM HIGH matching funds.
Provides resources to support mission-aligned infrastructure investments involving repairs to buildings, utility systems and other campus infrastructure to support a variety of university operations.
Reflects revised debt service schedules as the result of 2020 and 2021 bond refinancing.

Employee increments

Throughout the budgeting process, we have stressed that it remains important to reward talent and recognize the great potential of our employees, who at every level work very hard on behalf of this institution. Employees who are represented by a recognized collective bargaining unit will receive a negotiated increment pursuant to the specific provisions of the applicable, existing or future agreements. Moreover, the recommendation to the Board also includes a tiered-increment approach for eligible, non-represented personnel with pay raises implemented July 1 for FY 2026. The table below documents that plan.

Increment Amount	Non-represented Employee Groups
0%	Employees who earn more an hourly rate of $102.57 or greater/ salary of $199,992.01 or greater, except for chairs, law school faculty and individuals with contracts that stipulate increases.
1.5%	Eligible employees who earn an hourly rate of $76.93 to $102.56/salary of $149,994.01 to $199,992.00.
2.5%	Eligible employees who earn an hourly rate of $51.29 to $76.92/salary of $99,996.01 to $149,994.00.
3%	Eligible employees who earn an hourly rate of $0 to $51.28/salary of $0 to $99,996.00; eligible, non-represented faculty, department chairs and school directors in a non-represented group.

Guiding stewardship principles

Our work is not done. Even without disruptions at the state or federal levels, to realize the mandate of a balanced budget for FY26 NIU must continue to adopt operational changes. This includes pursuing shared service models, leveraging efficiencies associated with technology implementation and ensuring that expense reduction is accompanied by opportunities for shared savings and strategic reinvestment.

The following financial stewardship principles were developed collaboratively with significant input from shared governance and shared leadership groups. They will guide us in the coming year:

NIU is committed to attracting, retaining and motivating a diverse and talented workforce, and our compensation practices focus on equity and fairness, competitiveness, and total rewards.
Additional funding for instructors and scholarships will be allocated as needed to accommodate increases in student enrollment.
In alignment with the Shared Services Working Group’s recommendations, shared services models will be implemented to enhance efficiency and reduce duplication. Campus feedback will be critically important as our strategy is developed further.
Position control measures will remain in place with the specifics reviewed and revised as needed at the beginning of the calendar year.
Nonessential spending will continue to be restricted.
Current travel guidelines will remain in effect.
All promotional items, information technology hardware and software, and advertising/marketing purchases will be routed through the appropriate division to leverage economies of scale.

I will present the university’s proposed FY26 internal budget to the Board of Trustees for approval at the June 12, 2025 meeting. We are grateful for their guidance and look forward to an engaged conversation that ends with an approved budget.

Despite the challenges that we are facing, I am confident that our NIU community will emerge stronger, more resilient and more focused on Huskie students’ success.

Together Forward

Lisa C. Freeman
President

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