Tuition increases mark U budget

Mary Jane Smetanka, Star Tribune
June 12, 2004

University of Minnesota officials reluctantly passed a 2004-05 budget filled with tuition increases and cuts Friday, and then defiantly signaled that they are ready for a very public fight over further cuts in state funding.

The $2.6-billion budget includes tuition and fee increases for undergraduates that range from 12 to 14 percent as well as staff cuts. While most of the cuts are largely invisible to the public -- a secretary here, a professor there, 60 cows sold from an agriculture program -- officials said that if state funding is cut again, the kind of budget slashing that hit the University of Minnesota Extension Service last year and that raised hackles all over the state is just the beginning.

"The people of this state don't understand [that] we are approaching an emergency," said Regent Frank Berman. "The university is being placed in jeopardy, real jeopardy, for the lack of support we're getting from the state. We are going to start losing programs that the state needs and wants."

"...We can't keep having budgets with salary freezes, we can't keep [raising tuition 14 percent] and hope our students have access. ... The time has come to recognize that this institution and what it stands for is being placed in jeopardy."

President Robert Bruininks said Minnesota's health care system would be "third world" without the physicians, dentists, veterinarians and pharmacists produced by the university. A plan to produce more pharmacists on the Duluth campus has been held back because money to add facilities were in this year's bonding bill, which never passed the Legislature. And Bruininks bristled at what he called misconceptions that the university did not suffer much when the state cut base funding to the school by $185 million for the 2003-05 biennium.

Bruininks said that unlike some state workers, who got experience-based raises during the first year of the biennium, university employees took a true pay freeze and paid higher health insurance premiums as well. Unlike the state, he said, which pushed costs into the future to deal with its deficit, the school took the pain now.

"What we did not do was rely on reserves to balance this budget. I promised you last spring . . . that we would not use the easy way out," he said.

Tuition pressure

Two-thirds of the coming tuition increase is due to the state budget reduction "and nothing else," Bruininks said.

"We face very serious problems," he said. "I don't think we should be off the hook; we still will be setting priorities and making choices." He said the school needs to work out a "renewed partnership with the state of Minnesota, a partnership that recognizes that the university is absolutely critical to the state's future."

The state's general fund appropriation of $550 million in the new budget bumps state support to the university back near 1998 levels. Tuition, on the other hand, is at an all-time high. While half of Big Ten universities have not set tuition and fees for next fall, on the Twin Cities campus those costs for resident students likely will remain third among public schools on the list, behind only Penn State and Michigan. The school has begun a campaign to raise money for endowed merit scholarships that would increase the number of students receiving privately funded scholarships from 4,500 to more than 6,700.

What happens to tuition in the future depends on funding, Bruininks said. "There may be no way to shield students from large tuition increases," he said. But university Chief Financial Officer Richard Pfutzenreuter said the school is running out of less drastic options.

"We had a hard freeze on salaries, and we can't do that again," he said. "We pushed health care costs down to employees, and we can't do that again. Then we're back to high tuition increases, and we can't keep doing that. So what are our tools for next year?"

Officials worry that if salaries are frozen again, faculty members will begin to leave. About 550 jobs at the university were eliminated during this biennium, through layoffs and not filling vacancies. About 200 of those positions were cut from University Services, where janitors are cleaning more buildings, jobs have been consolidated and technology is doing some work that people once did. The four-campus university system has almost 19,000 employees.

Bruininks said that if funding forces more cuts, the school might have to begin "planned abandonment" of some university units.

The board also passed a dramatically reduced capital budget for 2004-05. Hopes for almost $188 million in renovation and health and safety improvements to university buildings were lost when legislators didn't pass a bonding bill. The $44.2 million budget includes some classroom and lab renovations, window replacements, air conditioning improvements and the like. The board resolution includes a clause allowing other items to be added if a legislative special session yields a bonding bill.

A job review

In his second annual job review, regents praised Bruininks for his handling of the school's budget difficulties and said he has made the school better despite those problems. They said they want him to develop "a new funding model" for the school and to make a renewed effort to convey the university's importance to Minnesotans. Bruininks got high marks for building strong and trusting relationships both inside and outside the university, for focusing on the school's academic strengths and building programs in cutting-edge areas, and for managing controversies such as the student riots and the issue of guns on campus.

The board also appointed neuroscience, neurology and psychiatry Prof. Apostolos Georgopoulos to a McKnight Presidential Endowed Chair, a high honor for faculty members. The McKnight chairs give recipients about $50,000 in new research support each year.

Posted by mpdean at June 12, 2004 10:09 AM