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« Transforming the U: Progress and Impact | Main | What's At Stake: Legislative Testimony and Video »


February 21, 2011

Legislative Update and Budget-Balancing Strategies


Dear Colleagues,

Last month I shared with you our state budget request for the next two years. The request was modest--essentially, that legislators honor the funding level established by the 2010 legislature. Even so, we knew that maintaining state funding at current levels would be very difficult in the face of a $6 billion state budget shortfall. Instead, on Tuesday I will appear before the legislature to testify as to the serious long-term consequences of state funding cuts as deep as 15 to 20 percent, as requested by legislative leaders in the Minnesota House of Representatives. Once again we face the hard reality of budget cuts--potentially, deeper cuts than we've ever seen.

Clearly the governor's proposed budget was welcome news compared with this possibility. However, even if the governor and the legislature honor our current funding level, rising costs would still have required us to continue to reduce budgets and reallocate savings to other priorities. While we will continue to fight for strong state support, we must all acknowledge that significant reductions are likely. As a result, we must take significant actions now to protect the University's academic quality and ensure a balanced budget.

The actions currently planned for 2011-12 include:
  • freezing employee wages (subject to collective bargaining);
  • re-examining and reforming benefits to achieve significant savings;
  • implementing a third Retirement Incentive Option, as announced last week, in order to further reduce our workforce through planful, proactive, and voluntary means;
  • reducing new investments in academic priorities and emerging opportunities, and forgoing the possibility of increasing financial aid for students; and
  • differentially reducing levels of state support in our academic units and reducing administrative support unit budgets statewide.
I know these strategies will impact many of you personally, both at work and at home. We have asked the entire University community to set clear priorities, to reduce costs and increase productivity, to grow new revenues, and to hire carefully and strategically. Our decisions continue to be strategic, guided by consistent principles, and focused on the long-term academic strength and vitality of the University--and it is our firm intention to preserve employment wherever possible.

It is important for the entire University community to understand that we have already been cut, $111.5 million in the past two years, to a level of state funding last seen in 2001. The University has paid for the past decade's worth of academic progress and rising costs of health care, energy, and other essential expenditures primarily by using careful strategic planning, conservative budgeting, significant reallocation of existing resources, and our own entrepreneurship and creativity, as well as by growing revenues, including tuition and private support. We have reduced budgets across the University, including $36 million in cuts to central administration in the past two years, and have consistently balanced our budget even as the state has run a deficit. Despite these unprecedented cuts, we should take great pride in the fact that we have managed to improve our key academic and productivity measures every step of the way.

It is also important for you to know that, in my discussions with the legislature, I will be frank about the serious impact of another cut of 15 to 20 percent. I intend to share examples from our systemwide operations to offer perspective on the scope and magnitude of such a cut. These examples are not intended to foreshadow likely reductions; instead, they are intended to illustrate that the proposed state budget reductions, combined with $111.5 million in state reductions in the last two years, will force us to eliminate or sharply curtail mission-critical priorities and operations. We must aggressively drive home the reality that cuts of this depth could permanently damage our great university. I will share my remarks with you later in the week; in the meantime, please know that my comments are illustrative only.

Finally, I want to ask for your help. In the coming weeks, as the legislature puts together its budget plan, it will be important for many more voices to be added to mine at our state's Capitol. The University of Minnesota has never been more relevant to the future of our state, and we must work together to make the case for strong support for the University to our state leaders. Please consider taking action through the University of Minnesota's Legislative Network.

I want you to know that your hard work and dedication to the mission and students of the University of Minnesota is truly inspiring. This community has been good to me for more than 40 years now, and I intend to spend the remainder of my tenure as president doing my level best to secure its academic strength and financial vitality for the foreseeable future. Thank you for your continued support in these efforts.

Sincerely,

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Robert H. Bruininks
President