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February 2013 Archives

CLA Budget 1001--Part 3: The State Appropriation

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By Brent Gustafson, Finance Director

As a public institution, the University of Minnesota relies on biennial appropriations from the Minnesota Legislature to fund a significant portion of its operations. For the College of Liberal Arts, state appropriations fund nearly $45 million of our current year's budget (19%). This week's column is intended to explain the process of how the University allocates these resources among colleges, as well as trends in the level of state resources available to the University and to CLA.

Biennial Process

Each time the State of Minnesota develops its budget, it does so for a two-year period. This "biennial budget" sets in law appropriation amounts for state agencies and the University of Minnesota, among other recipients. Typically, the state legislature makes appropriations for each two-year biennium in the spring of each odd-number year for the fiscal year that begins on July 1 of that year. The Legislature is currently in session and developing the FY 2014-15 biennial budget. Overall, the State's budget encompasses a total of $67 billion for the two-year period across all funding sources (FY 2014-15 ). However, much of the focus for the state budget each legislative session is on the $37 billion General Fund, because this is the largest and most flexible resource for state lawmakers. The General Fund is the source of the University's appropriation from the state.

While the Legislature creates an appropriation law (i.e., the budget) in the odd-numbered years, it also makes adjustments to the budget in the even-numbered years, often referred to as the supplemental budget.

University Process

Within the University, each administrative and collegiate unit undergoes an annual budget and planning process with central administrative offices. These central offices are responsible for the overall allocation of resources across the University and for presenting those plans to the Board of Regents. Academic units like CLA go through this process--known as the compact process--each spring for budget allocations for each fiscal year that begins on July 1.

As part of this annual budget process, the University will allocate what it has received from the State of Minnesota. The state appropriation is often referred to as "O&M," which stands for Operations and Maintenance. For the current fiscal year (FY 2013), the University received $545.8 million as an appropriation from the State's General Fund (the biennial amount for the U for the current biennium is $1.09 billion, or about 3% of the State's total General Fund). For the current fiscal year, CLA's allocation of state appropriations is $45 million, or about 8% of the University's allocation.

In making allocations to colleges such as CLA, central offices take into account many factors, including the availability of other resources. The budget process involves examining levels of funding and trends across all sources, so CLA's revenue from tuition and other sources is taken into account when setting allocations of state O&M funds. Other colleges receive different percentages of their budget from the state appropriation.


The amount of funding for the University--and consequently CLA--has fluctuated over time, particularly in light of state budget shortfalls. For example, the State of Minnesota faced a $5.5 billion budget shortfall for the current biennium. In setting appropriations for this two-year period, the Governor and Legislature set the amounts for the University at a level that was $126 million lower than the prior two-year period.

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Not surprisingly, as the state funding for the University has decreased, so has the amount of O&M that has been allocated to CLA. In 2008, state resources funded $75.6 million of CLA's operation (32% of CLA's budget). As noted above, the CLA's budget for the current year relies on $45 million of state funding (19% of CLA's budget).

Currently, the University has a budget request under consideration by the State Legislature. Anyone seeking more information about the University's biennial request can get information from the University's Office of Government and Community Relations:

CLA Budget 1001--Part 2: A Closer Look at Tuition

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By Brent Gustafson, Finance Director

The budget for the College of Liberal Arts is financed primarily by tuition (75%) and state appropriations (19%). These resources are then spent on CLA operations, primarily on salaries and fringe for faculty, staff, and graduate assistants (54%), as well as overhead and shared costs to the University (35%, known as "cost pools"). [See the first article of CLA Budget 1001 for more on sources and uses of the CLA budget.] This piece is going to examine the college's largest revenue source--tuition--in more detail. For the current fiscal year (2013), CLA is budgeting tuition revenue of $177.3 million.

Tuition revenue includes tuition paid by graduate, professional, and undergraduate students. In CLA, 89% of our tuition revenue comes from undergraduates.

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75/25 Split
The University of Minnesota uses a budget model that allocates all "earned income" to colleges across the system. What this means for tuition is that all the tuition is earned at the collegiate level, and only through overhead charges (known as "cost pools") does that money get back to centralized University functions.

Within this structure, tuition is "earned" in two different ways: through enrollment and instruction. The University budget model gives 25% of a student's tuition to the college in which that student is enrolled (registration tuition). The remaining 75% of the tuition paid goes to the college that provides the instruction for the course (instructional tuition). Given the individualized nature of student course taking, that 75% portion of tuition will vary from student to student. Additionally, for any given student it is possible that the 75% portion of tuition will vary from semester to semester, and even from course to course.


1. A forestry major (CFANS) enrolls in a Spanish class. Of the tuition paid, 25% goes to CFANS, 75% to CLA.
2. A sociology major (CLA) enrolls in a Family Social Science class (CEHD). Of the tuition paid, 25% goes to CLA, 75% to CEHD.
3. A psychology major (CLA) enrolls in an art class. 100% of tuition is paid to CLA.

CLA has financial challenges related to tuition based on both aspects of the 75/25 tuition split. Overall enrollment in the college (undergraduate and graduate students) has declined from just over 17,000 students in fall 2009 to just under 16,000 students in fall 2012. This reduces the tuition available from the 25% paid to the college of enrollment.

Additionally, CLA has experienced a decline in the number of student credit hours of instruction taught in our courses. In academic year 2008-09, CLA delivered approximately 434,000 student credit hours (SCH) of instruction, while last year (AY 2011-12) that figure was approximately 393,000 student credit hours. While some decrease in SCH should accompany the decrease in the size of the student body, another trend has created pressure on CLA instructional tuition. CLA students are taking an increasing share of their credits in colleges outside of CLA:

• In 2008-09, CLA students took 73% of their credits in CLA, with the remaining 27% at other colleges;
• Last year (AY 2011-12), only 66% of CLA credits were taken here, while 34% were taken at other colleges.

There are likely a number of factors that are influencing these trends, reflecting trends in demand for particular fields of study as well as the menu of what's offered in CLA and other colleges.

Regardless of the source, the implication is that the combined effect of fewer students overall and a declining share of the instructional pie results in budgetary challenges for the college, as this creates downward pressure on our single largest revenue source.

Often the most visible aspect of tuition is the overall rate set by the Board of Regents, as well as any rate of increase. However, for any college within the University, the total amount of tuition earned is driven not just by price, but by volume. As a result of a decline in volume, CLA's tuition revenue does not change by the same percentage as the price increases of recent years. For example, for the current fiscal year, while the rate of in-state undergraduate tuition increased 3.5% (and 4% for non-resident and graduate student tuition), CLA has only budgeted a 2.4% increase in revenue from tuition due to the declines in enrollment and student credit hours described above.

Accolades February 7, 2013

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Assistant Professor Alice Lovejoy (cultural studies and comparative literature) has been named a McKnight Land Grant Professor for 2013-2015.

Two CLA professors are nominated for Minnesota Book Awards in the General Nonfiction category. Winners will be announced on April 13.

Professor Emerius David Noble (American studies) is nominated for Debating the End of History: The Marketplace, Utopia, and the Fragmentation of Intellectual Life (U of Minnesota Press).
Professor Brenda Child (American Indian studies/history) is nominated for Holding Our World Together: Ojibwe Women and the Survival of Community (Viking/Penguin).
Also, former associate professor David Treuer (English) was nominated for Rez Life: An Indian's Journey Through Reservation Life (Atlantic Monthly Press/Grove/Atlantic, Inc.).

Associate Professor Dona Schwartz (journalism and mass communication) has received a $10,000 2013 Artist Initiative Grant from the Minnesota State Arts Board. With the award, Dona will produce framed exhibition prints from her award-winning project On the Nest. The prints will be exhibited in association with the launch of a published monograph of the series.

Professor Mary Schuster (writing studies) and Ph.D. alumna Jessica Reyman (now assistant professor at Northern Illinois University) were awarded the 2013 Technical and Scientific Communication Award in the category of Best Original Collection of Essays in Technical and Scientific Communication by the Conference on College Composition and Communication. The award is for their co-editorship of a special issue of the journal Technical Communication Quarterly on "Technical Communication and the Law."

Professor Nabil Matar (English), with co-editor Judy Hayden, has published Through the Eyes of the Beholder: The Holy Land, 1517-1713 (Brill, 2013). The collection examines the view of holiness in the "Holy Land" through the writings of pilgrims, travelers, and missionaries. More info

Christopher Buckley (career services), along with Jeannie Stumne (CEHD Career Services) and Heidi Perman (St. Paul Campus Career and Internship Services), was presented with the Career Development Network's Golden Gopher Merit Award for his work this year creating the CDN Diversity and Inclusion program, which provides structure for career services staff to grow in their multicultural competence. This program has helped CDN members purposefully seek out experiences and resources that challenge the way they approach their work.