U to add $58M to budget request

Molly Moker

The Office of Budget and Finance plans to add $58 million to its 2006-07 budget request, University chief financial officer Richard Pfutzenreuter said Monday.

The University is entitled to add the money because of a state statute that makes the University of Minnesota system and Minnesota State Colleges and Universities eligible for extra state funding if their enrollments increase by more than 2 percent, said Julie Tonneson, University budget director.

Although the University will request the money, the state does not automatically have to fund it. Or, the state could give the entire enrollment formula and treat it as a replacement for the University’s budget request, Tonneson said.

The $58 million will be in addition to the $84 million the University plans to ask from the state during the next two years.

If the state contributes that much, the University will also supply $84 million through a 5.5 percent tuition increase and internal reallocations.

The Board of Regents will vote on the finalized proposal Nov. 12.

Despite Minnesota’s economic shortcomings, the University is still optimistic about its budget request.

Bruininks said he considered the request to be “cheap” at the Board of Regents meeting last month.

Pfutzenreuter said the University is thinking about ways to finance itself if the state does not award the full budget request. He said it is possible tuition and internal reallocations could increase if the state does not fully fund the plan.

“$42 million is a realistic budget plan, and we’re going to fight like heck to get it,” Pfutzenreuter said.

Lobbying efforts

For the state to fill the University’s request, the University will need better lobbying efforts than last year, said Sen. Sandy Pappas, DFL-St. Paul, who is chairwoman of the Senate Higher Education Budget Division.

Pappas said the University’s lobbying attempts were not strong enough.

“Why weren’t people contacting legislators over the summer, demanding that there be a special session? It’s lost opportunity,” Pappas said. “If the University had the lobbying effort the (National Riffle Association) does, we would not have these cuts.”

Pappas said she is pleased with the efforts of Bruininks’ office, but it does not make up for the efforts of the other hordes of University stakeholders.

Although the state is in economic hardship, Pappas said, the University’s request seems fair.

“Even students who have been hit with double-digit tuition increases are willing to go along with the 5.5 percent increase,” she said. “(The University is the) undercutting economic engine and the success of our state, and we need to support it.”

Pappas said she is still in favor of passing a University bonding bill in a special session.

“I’m prepared to ask the governor to do a special session,” Pappas said. “If we passed (a bonding bill) in the next couple weeks or months, people could be in the ground by March.”

If the State Legislature waits until the 2005 session, Pappas said, projects will not be able to start at the University until May or later.

Economic outlook

State economist Tom Stinson said he could not say whether the University’s request is a good bargain for the state.

” ‘Fair’ is really in the mind of each beholder,” Stinson said. “What I do know is (the state) is starting $400 million in the hole.”

In February, the state’s deficit was set at several million dollars. Another economic forecast will be released in early December.

Pfutzenreuter said the deficit has increased since February, but he does not know by how much.

Stinson said fulfilling the University’s request will be a balancing game for legislators.

“To get more money, that means if there’s no new revenue, someone has to get less,” he said.

Stinson said he does not think the Legislature will be sympathetic to the University, because it did not pass the institution’s 2004 bonding bill.

But the University’s lean request is surely appreciated by legislators, Stinson said.

“The University was wise to have a modest agenda,” he said. “But whether it’s successful depends on the governor and the Legislature.”