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May 5, 2011

Year-End Legislative and Budget Update


Dear Colleagues,

My presidency began with substantial state budget cuts, and as my term comes to a close, we face the most challenging legislative session I've seen in my four decades in Minnesota. On Tuesday, May 3, I testified before the legislature's higher education budget conference committee, perhaps for the last time as president of this great University. I thanked the legislature for the many things we've accomplished with state support over the past several years, reminded the committee members that we've already been cut deeply twice in the past decade, and again urged them to consider something less than the severe budget reductions and additional regulations currently under consideration for the University of Minnesota.

Legislative outlook
Ordinarily at this point in the budget process -- with both a House and Senate bill on the table and a conference committee working -- we can see the likely outcomes and work toward our preferred end. This time, however, neither bill is acceptable:

  • Both cut the University too deeply (especially given previous reductions).
  • Both restrict our ability to set our own priorities to address these deep cuts. 
  • And both contain language that will damage our ability to attract and retain researchers and external funding. 

The proposed deep reductions roll state funding back to 1998 levels -- when the price of oil was at an all-time low and our freshmen were entering kindergarten -- and will erode our ability to deliver on our unique mission of world-class educational opportunities and innovation through research and discovery.  

Addressing the budget challenge
That said, we expect to be a part of the state's budget solution, and we must adopt a budget that addresses state cuts between now and the end of my term as president on June 30. We remain committed to our budget planning principles and will work hard to moderate tuition increases and preserve employment. In order to manage such deep reductions, however, we must necessarily focus on our biggest cost driver: people. To that end, the following initiatives are currently under way:

  • A wage freeze for fiscal year 2012 (July 1, 2011, through June 30, 2012);
  • A third voluntary retirement incentive option (RIO) program;
  • Higher retirement contributions for new academic employees;
  • Increased medical premiums and co-pays for employees; and
  • Changes to the way our healthcare plan is managed in order to reduce administrative costs. 

We are also aggressively implementing additional long-term cost reductions across our operations, including capital investment, facilities operation, energy, technology, procurement, and more. 

We intend to balance the budget as we have in the past, with approximately two-thirds of the solution resulting from differential budget reductions and productivity gains in academic and support units, and the remaining one-third from a modest tuition increase. If the legislature cuts the U's state funding to the levels currently proposed, tuition for Minnesota undergraduates will likely increase 5 percent.

To help offset this increase, we are maintaining our deep commitment to affordability for Minnesota students with financial need. In the coming year, all current recipients of the University of Minnesota Promise Scholarship (U Promise) will receive at least as much U Promise support as they did this year, and new/incoming students will receive a guaranteed need-based scholarship based on their Expected Family Contribution. This continued strong support will enable us to control the net price Minnesota students pay to attend the University -- which, on average, has increased less than 3.5 percent per year over the past 10 years.

What can you do? 
In my nine years as president, we've seen deep budget cuts in 2003-04, 2010-11, and now in 2012-13 -- and we've consistently balanced our budget and improved academic quality, services, and productivity. The University has faced many challenges, but you have continued to work hard, delivering on our shared mission and values each and every day -- a fact for which I am personally grateful. Unfortunately, the proposed cuts to our state funding are now so deep that we will find it increasingly difficult to sustain our momentum even with your best efforts. For the better part of 160 years, Minnesota has made its research and land-grant university a top priority. We must help our leaders regain that sense of priority in order to restore the state's long-held commitment to higher education.

I know that many of you have already spoken out on behalf of the University. Please consider doing so again in the next few days, so our legislators clearly understand that the University of Minnesota matters to you -- and to the future of Minnesota. Our latest talking points are now available online, and you can find contact information for your legislators and even send pre-written messages through our online Legislative Action Center. State funding is essential to the strength of the U -- and I hope you will speak out on behalf of the University and its mission. 

I'm proud of this great community, and you should be, too. We've transformed the University of Minnesota into one of the strongest public research university systems in the country, and outstanding faculty and staff like all of you have been essential to that effort. With your continued support and engagement, I am confident that we can weather this storm and emerge a stronger University. Thank you for all that you do.

Sincerely,

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Robert H. Bruininks
President