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Republicans continue one-time higher ed cuts

The Republican legislative leadership announced a plan today to cut about $1 billion in state spending, including continuing about $90 million in unallotments to the University of Minnesota over the next two years.

Flat state funding is nothing new to the University of Minnesota. A Republican proposal unveiled today would continue the trend over the next two years.

The bill, meant to tackle the state’s $6.2 billion budget deficit, would effectively transfer Gov. Tim Pawlenty’s one time cuts, or unallotments, into the 2012-2013 budget cycle. It includes $840.5 million in total reductions. 

Continuing the cuts would take $89.2 million in funding from projected state aid to the University for the next biennium. The move doesnâÄôt cut real dollars, but instead stops automatic spending increases built into the budget.

It’s “phase one” in a series of Republican proposals aimed at curbing the current shortfall. Rep. Mary Liz Holberg, House Ways and Means Committee chairwoman, said the Republican leadership hopes to pass the bill by Feb. 10.

“This is the first step in the budget process to bring that deficit down,” said Sen. Claire Robling, Senate Finance Committee chairwoman. The bill was introduced on the floor Tuesday and will be vetted through the taxes and finance committees.

But Gov. Mark Dayton, forgoing his usual calls for cooperation, blasted the proposal in a statement.

âÄúI will not agree to piecemeal cuts and partial solutions eliminating the $6.2 billion deficit in the next biennium,” he said. “I will propose a reasonable, balanced and complete budget solution on February 15th, and I ask the legislature to do the same thereafter, with citizen participation through hearings and very careful consideration of the effects of their decisions on peopleâÄôs lives.âÄù

State aid to the University for the next biennium is now projected to hover around $1.195 billion, although it requested $1.28 billion. Chief Financial Officer Richard Pfutzenreuter said state aid has been rolled back to levels from roughly a decade ago.

Rep. Bud Nornes, House Higher Education Committee chairman, said the University probably expected the cuts, a thought Pfutzenreuter echoed.

The University wasnâÄôt âÄúfoolish enoughâÄù to allocate the money included in last sessionâÄôs increase, Pfutzenreuter said, but if the state funding had come, it would have been spent on increasing financial aid for students, restoring faculty positions and âÄúcore costsâÄù like maintenance.

Last session, the state built a $100 million aid increase to the University into it’s budget projection for 2012-2013, but this bill would keep funding levels roughly the same.

Because the bill leaves a $5.2 billion deficit in itâÄôs wake, further reductions are likely. Dayton will release his preliminary budget proposal in mid-February.

âÄúWeâÄôd like to think this is the end of the cutting with this bill, but I doubt it,âÄù Pfutzenreuter said.

He said the next round of cuts to the University will be devastating and counseled the Legislature to take a more balanced approach to higher education funding.

Pfutzenreuter pointed to moves taken by the University to keep its budget under control like pay freezes and furlough days.

Under ideal budgetary conditions, higher education institutions would see an increase in state aid, Nornes, R-Fergus Falls, said. The issue of higher education funding is likely to come up during ThursdayâÄôs House Higher Education Committee meeting.

But with the current shortfall and a Republican legislative majority standing strong against tax increases, thereâÄôs little hope for any uptick in aid.

Rep. Tom Rukavina, ranking DFLer on the House Higher Education Committee, said the state funding freeze would only mean higher tuition for students. To him, âÄúa tuition increase is a tax increase,âÄù he said.

Rukavina said he supports income tax hikes as part of an effort to offset some tuition costs. Dayton campaigned on raising about $1.9 billion in new state revenue by taxing MinnesotaâÄôs highest earners.

 Although Pfutzenreuter said the University is typically successful lobbying the Legislature, it hasnâÄôt been successful in grabbing a piece of the pie. Still, itâÄôs important to remain calm and illuminate the benefits the University brings to the state, he said.

âÄúWeâÄôre mad, but it doesnâÄôt do a lot of good to go and scream at people about it,âÄù he said.

State general fund aid for higher education has decreased by more than one-half since 1967. Over the past decade, tuition and fees at the University have nearly tripled, according to Minnesota Office of Higher Education data.

One bright spot for higher education this session could come in the form of a bonding bill. Rep. Alice Hausman, DFL-St. Paul, introduced legislation last week that includes $128 million for University capital improvement projects and maintenance. She is also part of a bipartisan effort aimed at specifically allocating maintenance dollars – formally known as Higher Education Asset Preservation and Replacement funding – to higher education institutions.

Jumping party lines, Nornes said he supports this sort of funding despite typical Republican reprehension to bonding. Last session, the University received $56 million in HEAPR funds.

“That’s a very important part of what we do, is to maintain the facilities as we would our own house,” he said. 

Also included in the bill is a continuation of nearly $100 million in unallotments to the Minnesota Colleges and Universities system for the 2012-2013 biennium and Nearly $600 million in cuts to local government aid.

For this fiscal year, Republican lawmakers asked Minnesota Management and Budget to identify $200 million in cuts to state agencies. Included in the bill is a provision exempting higher education, K-12 and special education from the cuts.

The cuts are part of an effort to reduce the size of the deficit represented in the state’s February economic forecast.

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