U preps state funding request amidst bleak budget forecast

A worse-than-expected state budget outlook creates challenges for the University of Minnesota as it prepares to request $1.3 billion in funding.

by Conor Shine

A grim state budget forecast will not deter University of Minnesota officials from seeking $1.3 billion in aid for the school next spring.

An updated budget forecast released last week projected the stateâÄôs deficit for the next biennium at $6.2 billion, nearly $600 million worse than anticipated. 

Nonetheless, the University is headed into the legislative session seeking two-yearâÄôs worth of funding for academic programs, new faculty hires and to offset the cost of inflation, Chief Financial Officer Richard Pfutzenreuter said.

âÄúWe knew about the sizable deficit âĦ so it was not unexpected,âÄù he said. âÄúWeâÄôre definitely sticking to the plan. WeâÄôre going to pull out every tool weâÄôve got to convince people the University is a valuable resource to the state.âÄù

Pfutzenreuter said he hopes lawmakers take a âÄúbalancedâÄù approach that mixes increasing revenues with cuts.

âÄúWe know there will need to be cuts,âÄù he said. âÄúItâÄôs not practical that itâÄôs all going to be solved with new revenue, but itâÄôs not practical to solve it by just cuts.âÄù

 If the University receives a cut in its funding, it will continue a decade-long trend of decreased state support. 

Since 1997, the University has never had a budget request fully met by the state. Meanwhile, the stateâÄôs budget grew nearly 70 percent, but funding for the University increased only 20 percent.

The winding down of federal stimulus funding and the use of short-term fixes for past budget problems have contributed to the stateâÄôs current predicament, state economist Tom Stinson said.

Structural problems mean deficits are likely to persist until at least 2015, Stinson said, and simple solutions will be hard to come by.

âÄúEven if we find some smoke and mirrors, itâÄôs going to be very difficult to find more than $3 billion or $3.5 billion dollars,âÄù he said. âÄúThat still leaves you with a $3 billion shortfall.âÄù

Pfutzenreuter said short-term solutions contributed to the âÄúunnecessaryâÄù deficit, but that the University can play a role in helping the state rebound.

The University needs to continue producing well-educated graduates, Stinson said, calling MinnesotaâÄôs workforce itâÄôs greatest asset.

He detailed the stateâÄôs budget situation in a meeting with the Board of Regents Thursday. Afterwards, he fielded questions, but the regents had few to ask.

 âÄúEither the group is too shocked or too frustrated,âÄù Regent John Frobenius said, as he waited for further questions.

Regents Chairman Clyde Allen asked whether the budget data showed any areas of potential growth in industry where the University could invest.

An abundance of heavy metals in northern Minnesota will make mining an increasingly important industry in the state, Stinson said.

While predicting the direction of the economy is difficult, Stinson said, âÄúIt seems to me investing in research in metallurgy in particular might be an appropriate way to take further advantage of this resource.âÄù