The Minneapolis Star Tribune's lead editorial on Sunday, November 21, 2004, praised the U for its fiscal responsibility. Read the full text below.
Reprinted with permission from the Minneapolis Star Tribune
"A tighter belt/Inefficient 'U'? Don't believe it"
Neophyte Minnesota legislators (and occasionally, governors who should know better) are given to regarding the University of Minnesota as a bureaucratic behemoth that must be loaded with inefficiency and ripe for budget-cutting.
Legislators, meet Cliff Hoffman of Deloitte Touche LLP’s Minneapolis office. He has been auditing the university’s books for seven years. He just finished this year’s audit, and he wants you to know his findings: “The university has really tightened itself up. It is an excellent example of an organization that is very focused and very efficient. I’d call it a model of fiscal responsibility.”
That’s high praise for any $2 billion per year operation, let alone one as decentralized and stratified as a research university. It’s especially important that his message register at the Capitol this year. This state’s flagship university shouldn’t sustain further losses in state appropriations out of a mistaken notion that better business practices could easily bring it additional cost savings. Hoffman attests that better business practices are already in force on campus.
The auditor was impressed by the university’s management of the difficult financial hand dealt it by the 2003 Legislature. It coped with a 9 percent cut in its state appropriation in part by rigorously controlling expenses. Salaries were frozen and 500 positions eliminated, saving $3 million; changes in health insurance and other benefits resulted in another $5 million in savings. Permanent expense reductions totaled $20 million; “and that’s actual results. Usually, in these situations, there’s cost creep,” Hoffman said.
He also drew attention to a $62 million increase in revenue from grants and contracts, the bulk of them funding research. Total receipts for research at the University of Minnesota last year came to $509 million, topping the larger University of Wisconsin system and belying the claim that Minnesota’s flagship is not sufficiently focused on research.
The less positive part of the university’s financial story was the 14.7 percent increase in tuition for the 2003-04 academic year. It generated $60 million in needed new revenue, but did so in a way that imperiled access to the university by students of moderate means – especially when seen in the context of four straight years of double-digit cost hikes.
Last year, the books balanced nicely, with assets and operating cash both up, Hoffman said. “But obviously, this raises concerns going forward,” he added. Salaries cannot be frozen again, not if the university wants to keep its best and most mobile faculty on the job. Health care costs cannot be expected to go down again while they are going up for everybody else. Tuition increases are already pricing the university beyond the reach of too many students.
Meanwhile, Minnesota now ranks 21st among the 50 states in what state government spends per $1,000 of its citizens’ personal incomes on higher education. Higher ed spending my that measure has been cut in half since 1978 – even as Minnesota’s need for a highly educated workforce and industry-spawning research has soared. It’s time the Legislature stop asking its university for more efficiency and start asking what the state should do to keep its university strong.
Legislative Update #1
November 16, 2004
2005 Legislative Session: The legislature will convene on Tuesday, January 4, 2005. It is a budget year but capital bonding will also be on the agenda, as the legislature did not act on a capital bonding bill last year.
The Minnesota Legislature: Now that the election is over, you can find members of the House of Representatives and the Senate in the 2004 Election Directory of the 2005-06 Minnesota Legislature: http://www.house.leg.state.mn.us/hinfo/leginfo/elecdir04.pdf. The Minnesota House of Representatives was up for re-election this year; the Senate was not. Eight committee chairs in the House either retired or were defeated. House leadership must now begin the work of organizing their committees, in terms of membership and structure. The Speaker of the House has the option of retaining the current committee structure, making changes such as having fewer committees, or changing the jurisdiction of committees. Higher Education has been a stand-alone committee in the House. At question is whether it will remain so or be combined with another, such as the K-12 education committee. The former chair of the Higher Education Committee, Rep. Doug Stang did not seek re-election so there will be a new chair and membership of the committee will change. And because of the overall change in the number of Republicans to the number of Democrats in the House, the ratio of Republicans to Democrats will change on every committee, including higher education committee. These decisions for the House of Representatives are expected to be made no later than the end of November. Because the Senate was not up for re-election, few if any changes are likely to be made in their committee membership.
Capital Bonding: The Senate Capital Investment Committee will begin work on a new capital bonding bill. The University will resubmit the 2004 capital request, updated to reflect inflationary costs and with the request for planning funds omitted. The Capital Investment Committee has scheduled hearings: the first is Monday, November 22, 2004 to hear presentations from the Department of Finance; the second is Monday, November 29, 2004 to hear presentations from the University of Minnesota and MnSCU. On November 29, President Bruininks will present the University’s 2004 capital request, as approved by the Board of Regents at their November meeting, to the committee. The Senate leadership’s current plan is to have a bonding bill on the floor of the Senate for consideration in early January.
Until the organization of the House is complete, we won’t know when their Capital Investment Committee will hear the University’s request.
Biennial Budget: President Bruininks met with Governor Pawlenty during the week of November 8 to discuss the University’s biennial budget request and to reaffirm the urgent need for a capital bonding appropriation. The President made an impassioned argument for state investment in the University through its biennial request. The Governor expressed his hope that higher education will not receive any further budget reductions and that there can be new money appropriated to the University.
The University is asking the state for $42 million in new funding each of the next two years. State funds would be used to invest in academic initiatives in the biosciences and initiatives to attract and retain talented faculty, students (grad and undergrad), and staff. A third area of state investment would be support for research and technology infrastructure. The biennial budget request is a partnership proposal to the state. The University will likewise fund $42 million each year, through tuition increases and reallocation, to cover basic operating costs including base compensation increases. For information on the 2006–2007 Biennial Budget Partnership Proposal, go to: http://www.umn.edu/govrel.
The next budget forecast for the state will be the end of November and the predication is that the forecast will remain the same as it is now—a shortfall of at least $400 million. It appears the Governor is still holding to his “no new tax” pledge. Even so, he appears to support the need for state investment in the University.
The University’s biennial budget request will be submitted to the Department of Finance this month. The Governor’s office will assemble the Governor’s budget throughout the month of December and will present it to the legislature no latter than January 25, 2005.
Presentations and Reports: Although session isn’t officially underway, President Bruininks and other University leaders have begun presenting the University’s legislative requests to legislators and others. Last week, President Bruininks presented the University’s biennial budget request to Department of Finance Commissioner Peggy Ingison, her staff, staff from the Governor’s office, and HESO Commissioner Susan Heegaard. The Department of Finance routinely conducts hearings for each of the agencies that are a component of the state’s budget.
Also of interest to the University, the Citizens League Higher Education Study Committee recently released a report on higher education in Minnesota. The report can be found at: http://www.govdocs.com/service/edition.html?document_id=35114&edition_id=73830
Call to Action: Hold the date of January 27, 2005 for the Legislative Briefing. This annual event will give attendees information about the University’s requests and, more importantly, information on how advocates can support the University with their legislators.
Pioneer Press
Published November 10, 2004
By Kermit Pattison
"Echoing a report warning that Minnesota's system of higher education is in danger of slipping, Governor Tim Pawlenty on Tuesday proposed raising standards for college preparation, sharpening missions of public campuses and increasing the state investment in education."
This Pioneer Press article also reports recommendations made by the Citizens League in their report titled "Trouble on the Horizon".
"Our rankings are due to past investments and what we have now is not sustainable," said Rondi Erickson, co-chair of the study.
The report urged the state to exercise greater oversight by holding insitututions accountable to measureable outcomes and evaluate them with online report cards.
Pawlenty said more investment in higher education is needed in the wake of several years of budget crisis. He said his budget would give highest priority to areas with greatest payoff, such as investment in teaching and research at the University of Minnesota.
University of Minnesota President Robert Bruininks said he hoped the coming budget discussions with the state would prove less divisive than those of recent years.
To read the full story visit:
http://www.twincities.com/mld/twincities/living/education/10140408.htm
Minneapolis Star Tribune
Mary Jane Smetanka
Published November 10, 2004
"Minnesota's star status as an education leader is dimming, and changes are needed both in high schools and colleges if the state is to stop its slide toward becoming just another "cold small state," a Citizens League study concludes."
The article continues with recommendations from the Citizens League study and initial reactions from Governor Pawlenty and University of Minnesota President Robert Bruininks.
"Minnesotans have lost a shared understanding that education is a public good and not just a private one," said Rondi Erickson of Duluth, co-chairwoman of the League's study group. "We are losing our edge. We cannot sustain what we have, and our economic competitiveness and our way of life is at risk."
"In a state where we are trying to answer the question in a hypercompetitive world economy. 'why Minnesota?,' one of the first and most important answers is because we have a world-class teaching and research university or universities," Pawlenty said. "If that's the case, then we should make sure that's a pretty high priority on where the funds go."
One of the recommendations from the Citizen's League is:
Promoting excellence and adding focus by investing more money in research on the University of Minnesota's Twin Cities campus, which should become increasingly elite by being "nationally selective" in undergraduate admissions, and having MnSCU pursue "centers of excellence" on some campuses.
To read the full story visit:
http://www.startribune.com/stories/1592/5077738.html
In this Minnesota Daily column, Fran Zerr suggests shifting attention and energy from the election to important issues like advocating for increased state funding for the U. http://www.mndaily.com/articles/2004/11/05/11121
Read a MPR story on youth voter turnout at the U and the impact that it had on the election.
Read the story here.
Read the Minnesota Daily editorial on how the University community must ratchet up its lobbying efforts in the state government.
http://www.mndaily.com/articles/2004/11/03/11060
By Robert H. Bruininks
This article appeared in the Star Tribune on October 31, 2004
Visionary leaders in Minnesota's business community have for years known this truth: The University of Minnesota's ability to attract the best minds available is a critical asset in assuring a robust economic future for the state in general and for their companies in particular.
Within a global, knowledge-based economy, the University of Minnesota, as the state's only major research university, is the foundry for new ideas and innovations that help drive our economy. But in addition to that intellectual capital, the university is an important source of human capital, the skilled and knowledgeable graduates whose productivity makes our state and regional economy competitive.
Economist Richard Florida's work mapping the geography of talent in today's economy indicates that businesses increasingly seek locations where they can hire creative and skilled employees and that major research institutions play a starring role in attracting and retaining such talent within a region.
In our region, prominent business and community leaders associated with the Itasca Project have identified the university's role as a "talent magnet" that is essential to the state's future economy and quality of life.
Over the past decade, the university has improved central elements of student life and learning. By class rank and test scores, the academic quality of our student body has never been higher at the University of Minnesota.
Attraction and retention
But I believe much more must be done to retain Minnesota's best students and to attract more from elsewhere. Although the university offers nearly unparalleled opportunities for its students, we are uncompetitive for some top prospects because we lack sufficient scholarships.
The University of Minnesota ranks at the very bottom of the Big Ten in the percentage of freshmen being awarded merit scholarships. That simply isn't a rank we can maintain and also continue to compete for top students, the kind that will provide the innovations and the workforce for Minnesota companies in the future.
College graduates tend to take up permanent residence near where they went to school. At the university, we know that most of the 11,000 students who graduate annually stay in Minnesota to live and work and contribute to the state's economy, culture and quality of life.
We also know that high school students admitted to the university who decide to go elsewhere -- most of them in the top 25 percent of their high school class -- choose out-of-state schools. When we lose them, Minnesota loses many of them for good.
Building scholarships
What's to be done? At the university, we've launched a multi-year scholarship drive to raise $150 million in new gifts, the biggest such effort in our history. I've made scholarships the top fund-raising priority across the university by pledging a university match to major scholarship endowments and designating October, a month when many of our alumni reconnect with our campuses, as Scholarship Month to focus attention on the drive.
Our fund-raising encompasses both merit and need-based scholarships. Severe budget cuts by the Legislature and governor have produced back-to-back double-digit tuition increases, meaning that while students might be better-prepared academically than ever, many of them also are more financially challenged than ever.
If the University of Minnesota is to meet its promise of being the talent magnet for the knowledge economy, business leaders must help make it happen. We need their help in persuading the Legislature and the governor that adequate support for the University of Minnesota is critical to the quality that allows a research university to attract hundreds of millions of dollars in competitive grants and contracts, as well as top scholars and students.
By the way, we're still awaiting action on a modest package of capital projects laid over from the 2004 session.
Case in point
But we also need the help of business leaders in creating scholarships. Let me describe how one visionary company, 3M Co., has done just that.
At 3M, a $1 million challenge grant was established by the company to match, on a 3-to-1 basis, scholarship gifts to the university from employees and retirees. As a result of the generosity of the company and its scientists, managers, sales representatives and workers at every level, a scholarship for top students majoring in business, engineering and science-related disciplines was created three years ago.
Nathan Olson is a freshman at the University of Minnesota this fall majoring in civil engineering. He was co-valedictorian of his class at Duluth's Marshall School, where he was captain of the cross-country team and a member of the student council. He competed in math league and mock trial and was named to the tri-state honor band.
Nathan is one of three National Merit Scholars that the university attracted this year with the help of the 3M/Alumni Undergraduate Merit Scholarships. So far, 56 students have received the 3M scholarships. They all have academic profiles similar to Nathan's (this year's contingent has an average 4.09 GPA), and like Nathan, they were recruited by Ivy League schools and other Big Ten universities. The 3M scholarship helped make the difference.
Nathan and students like him represent a big part of Minnesota's future. They might represent a big part of the future of your companies. They might be the doctors who care for your children and grandchildren. They might lead our classrooms and labs or our courthouses and capitol. And it might be your vision of the future that we all have to thank for helping to make it happen.
Robert H. Bruininks is president of the University of Minnesota.
This article appeared in the Star Tribune on October 31, 2004