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Budget Deal Relieves Higher Ed
By Patty Marsicano , Minnesota Public Radio
May 25, 2001

The budget deal announced at the state Capitol on Friday would provide an additional $176 million for higher education. While it's far less than what public colleges asked for, higher education officials say it's a lot better than some of the dollar figures they had been hearing.

Most of the increase will go to the University of Minnesota and the Minnesota State Colleges and Universities System. The $176 million compromise is much less than the two systems requested. It falls much closer to the House's $165 million than the Senate's $283 million proposal.

University of Minnesota Chief Financial Officer Richard Pfutzenreuter says the school is relieved it's not as low as rumored during budget negotiations last weekend. "Despite the fact that we're worried that the number isn't as big as we'd like, given the circumstances of what's going on at the capitol, we're going to have to make due with that from the state. We understand that," he said.

The U of M had sought an increase of $221.5 million. Under this budget target, it won't get anywhere near that. "Clearly, we're not going to be able to keep tuition at the three percent level that we had proposed going into the session. That's not going to happen. That's just not possible," Pfutzenreuter said.

The higher education package also includes a separate pot of tobacco lawsuit settlement money to eliminate the deficit in the University's Medical School. Pfutzenreuter says he and other U-of-M officials expect to get details on that proposal next week. He says it doesn't appear the tobacco money will come from a state endowment that funds the anti-youth-smoking "Target Market" campaign. The House proposed such a shift, generating considerable opposition among health officials and the teenagers who participated in the campaign.

Minnesota State Colleges and Universities Vice Chancellor for Public Affairs Linda Kohl says MnSCU is pleased with the overall increase, saying it's about where the system expected to end up. But like the U of M, MnSCU will receive a much lower increase than it requested. Kohl says individual campuses will have to decide what their spending priorities will be.

"They have talked in the past about having to cut programs, perhaps, perhaps not fill vacancies as they occur...a number of different steps that campuses have identified that they would have to undertake if the funding was not adequate," Kohl said.

MnSCU has 35 campuses comprised of state universities, vocational schools, and technical colleges.

The proposed budget increase for higher education will also affect state financial aid. The Higher Education Services Office which oversees aid programs usually gets about one-tenth of the higher education budget. This fiscal year, HESO expects to issue $120 million in grants to more than 60,000 students.

HESO Director of Communications and Legislation Phil Lewenstein says the $176 million proposed increase "sounds encouraging" but he doesn't give it a full endorsement. "This is a much lower figure than the higher education community expressed was needed to meet the needs of our citizens and our students going into the 21st century," he said. Still, Lewenstein says "it could be worse."

State Rep. Peggy Leppik, R-Golden Valley and chair of the House Higher Education Finance Committee, likes what she's hearing about the compromise. "I think this is good," she said. "It's $11 million higher than what we had in the House. It includes an endowment funding for the Academic Health Center. So I know that we can work with this."

But Sen. Dick Cohen, DFL-St. Paul, a member of the Senate Higher Education Finance Division says the proposed increase would lead to notably higher tuition and mediocre schools. He says the governor either doesn't understand higher education or doesn't choose to understand it. Cohen says if the dollar figure doesn't change, he'll vote against the bill.

The higher education conference committee will likely meet next week to decide precisely how to divide the $176 million between the U of M, MnSCU, and state financial aid.