Legislature gives health center a band-aid

It is difficult to predict how much money the University can squeeze out of the state Legislature, but after this week one thing looks obvious: the Academic Health Center will have to fight tooth and nail for every penny.
Health Center head-honcho Dr. Frank Cerra came to the Legislature asking for $37 million — a sizable request — explaining that declining federal funds and other factors have put the University’s Medical School in financial agony.
Then, like a dog looking at his reflection in the water, Cerra dropped his $37 million bone to bark at a mirage. Gov. Jesse Ventura proposed creating a $350 million endowment at the University with the state’s tobacco settlement money to fund medical education. The endowment would generate about $39 million a year.
So what happened to the endowment? The Senate adopted the general idea, but spread out the endowment to the Mayo Clinic and any other public Minnesota medical schools. Then they carved out $87.7 million for a program to help elderly people afford prescription medications. A worthy cause, but it will not help Cerra or students struggling to pay for med school. Now, the Senate endowment will only generate between $7 million and $10 million each year.
The new House Republican majority, for their part, just does not like the endowments. They want to use the money for tax cuts and they have the power to push the cuts through the House. They did not give enough money to the higher education committee to fund the endowments.
Not only that, said committee chair Rep. Peggy Leppik, R-Golden Valley, but the higher education panel did not get enough money to fund Cerra’s original request, either. Instead, the higher education spending bill passed the House Friday night with only $6 million for the Academic Health Center.
House Democrats seem to have turned their backs on Cerra’s request too. While bemoaning higher education’s tight budget, the Democrats willingly voted for a nearly $3 billion tax cut and rebate on Tuesday. That tax break gives back money to taxpayers that University officials would like to see in endowments.
Even one of the strongest supporters for education in the Legislature, Rep. Lyndon Carlson, DFL-Crystal, cast a yes vote for the tax break. He said the decision against endowments had already been made, now it is a matter of deciding who will get the tax break.
“Where I cast my no vote was on the budget resolution and on the targets,” Carlson said of the bill that allotted money to committees.
Only St. Paul Democrat Rep. Andy Dawkins took the high road and voted no on Tuesday’s tax bill. He reminded his colleagues on Friday night that some of the tax refund money could have helped the University’s Medical School, as well as financial aid programs and basic funding for all higher education needs.
So what happens next? The House abandoned all endowment plans and the Senate watered down the University’s share, leaving relatively little profit for the Academic Health Center.
Cerra and his medical students have to wait for the conference committee — the do-or-die last step at the Legislature — when a group of senators and representatives will cut their losses and iron out the differences in the two versions of higher education bills.
Last year, then-Gov. Arne Carlson flew in at the last minute to help his new buddy, University President Mark Yudof, wrestle out $242.8 million from begrudging legislators. This year Ventura, who also took a liking to our Texas-transplant prez, could do the same.
But if he does not, the good doctor and his pancake-popping boss could learn a really tough lesson: If the endowment sounds too good to be true, it probably is.

Coralie Carlson is a Daily alumna and currently covers the state Capitol for Murphy McGinnis Media. She can be contacted at [email protected]