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Higher education weighs budget challenge
by Marisa Helms, Minnesota Public Radio
January 2, 2003

Minnesota's public universities planned for a couple of lean years even before state officials announced a projected $4.5 billion deficit for the biennium. Both the University of Minnesota and Minnesota State Colleges and Universities system proposed scaled down budget requests for the legislative session. Now that the projected deficit is much larger than anyone thought, officials at the university and MnSCU are hoping for the best, but preparing for the worst.

St. Paul, Minn. — The state's public university systems call their lower than usual budget requests "sensitive," "responsible," and an attempt to work with lawmakers as they figure out how to dig out of a budget hole.

The University of Minnesota is asking for a $96 million increase for the 2004-05 biennium, and the Minnesota State Colleges and Universities system, or MnSCU, wants an additional $108 million. The systems are getting about $1.2 billion apiece from the state in the current two-year budget cycle.

Senate Minority Leader Dick Day, R-Owatonna, says asking less of the state in these times shows good leadership.

"Both of them are trying to come at this as not a whine and complain type attitude." Day says. "They both have been willing to dig in, and that's great, because I think they realize the problem we have."

Republican Gov.-elect Tim Pawlenty is not as impressed by the lower than usual increase requests. He says the systems should consider how they might get by with no increase.

"We are in a crisis the likes of which the state has never seen. And so this is not a time for people to say we're going to ask for more, just not as much more as we thought," Pawlenty said. "It's a time for people to get creative, and bold and innovative and entrepreunerial - you know, what are you doing to contain costs, what are you doing to innovate, what are you doing to streamline, what are you doing to reorganize?"

University of Minnesota President Bob Bruininks responds: "I accept the challenge to be bold and creative. And I think this university community has been bold and creative."

Bruininks says submitting a budget increase request that's less than half of what it was two years ago is pretty bold.

"We've also undertaken very aggressive strategies to improve service and cut costs. I use the example of student financial aid where we've reduced the lag time between an application and an answer from six weeks to five days. We've eliminated 700,000 pieces of paper every year and a quarter of a million dollars. We need to find many wins like that, not just one or two, and our people are working hard to do that, and we're making these kinds of changes each and every day."

The MnSCU system of 34 state-supported technical colleges, community colleges and state universities educates 56 percent of all post-secondary students in Minnesota.

The state appropriation makes up about half of the system's annual budget.

MnSCU Chancellor James McCormick says like the U of M, the system is also trying to do all it can to shave costs. But he says, with enrollment increasing for the fourth year in a row, the system has a limited number of choices in dealing with the budget if lawmakers don't grant MnSCU's $108 million increase.

"We have enormous pressure on our campuses for enrollment," he says. "We've closed several of our universities admissions already in 2002, already in December. So there's tremendous pressure. It would be easier to do the cuts if you didn't have the enormous student demand. So that makes it more difficult."

Both the U of M and MnSCU systems may be headed for cuts in staff and faculty. Students could face an even greater tuition increase than previously proposed. In their biennial budget requests, the U's Bruininks and MnSCU's McCormick said they would keep tuition increases down to a minimum of 3 percent for MnSCU and 4.5 percent at the U.

But now that the public system budget is on shaky ground, those numbers are poised to go higher.

Josh Colburn is president of the University of Minnesota Student Association. He says the expected 4.5 percent increase is bad enough. He's worried that if lawmakers don't approve the U's budget increase, tuition will jump for the third year in a row into the double digits.

"The higher our tuition goes, the more we go towards excellence rather than access," he says. "It's hard to stay a true state institution, public instititution, when we're increasing the amount of fiscal aid you need, and the amount of finances it requires for us even to attend."

Full-time tuition this year at the U is $5,500. MnSCU tuition averaged $3,200 this year.

The state of Minnesota has a so-called "shared responsibility" policy under which the state subsidizes the cost of a higher education for every Minnesota resident who wants one. If the student agrees to pay at least 46 percent of her education, taxpayers will put up the rest through federal and state grants, loans and work study.

In the last couple years, more and more residents have responded to the slow economy by enrolling in a college program.

That increased enrollment means added strain on the state's financial aid programs.

The Minnesota Higher Education Services Office, or HESO, administers the state's financial aid program. Aid is funded primarily through a state appropriation. HESO's upcoming biennial request includes a 19 percent increase to its state allocation of $120 million.

HESO's Phil Lewenstein says if the Legislature does not provide an increase, access to college for low and moderate income students is going to suffer. He says ensuring access is critical to the future of the state.

"We are going to have significant needs in the work force, there are shortages already, and there's going to be fewer college graduates to replace them, unless we can continue providing access to students. Increasingly, our student body, too, will reflect changing demographics. We'll have a lot more students of color, of low income, or from families where nobody went to college. And they're going to need help gaining access."

Asking lawmakers to think beyond the current budget crisis is a tack also taken by UofM President Bob Bruininks.

The day the $4.5 billion shortfall was announced, Bruininks responded by reminding lawmakers that the U is an economic engine. Investing in the U now, he says, is good for the long-term health of the state. That's why the U will be coming back to the Legislature this session with a list of $61 million worth of bonding projects Governor Ventura vetoed last session.

"What we have in that supplemental bonding request are some projects that we think are critically important to support our long-term research investments, and we believe that those research investments -- particularly in the area of academic health - will bring new resources into our state through new discoveries, new medical devices, new drugs, a whole range of things that I think would greatly enrich not only the University of Minnesota, but the state in general."

MnSCU is also planning to submit a supplemental bonding bill this session. The system will ask the Legislature to reinstate the support it offered last session for 17 campus merger and renovation projects that Gov. Ventura vetoed.

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