University President Bob Bruininks warned the Senate Higher Education Budget Division on Tuesday that continued under-funding would move the University from a first-rate to a third-rate institution.

After last year’s budget cuts, tuition increases and employee layoffs, Bruininks said the University could not continue to providing quality education without full funding.

While committee members at the meeting questioned the distribution of Gov. Tim Pawlenty’s capital bonding proposal, a state official said higher-education funding must be balanced with other state priorities.

Bruininks told committee members that University-state relations and community partnerships were important to the request.

A governor’s office representative answered questions about Pawlenty’s capital bonding proposal.

Under the proposal, the University would receive $76.6 million of its requested $155.5 million for building renovation and construction projects.

One of the projects discussed Tuesday was a community-sponsored biomass heating plant on the Morris campus.

Pawlenty did not include the plant in the University’s budget proposal.

The plant will be funded partly through a community referendum, Bruininks said, but cannot be built without state funds.

The University also wants to fund its biogenetic research collaboration with Mayo Clinic.

During his State of the State address, Pawlenty said he supported the partnership.

Committee members said they were pleased with the University’s effort to create partnerships with communities and other institutions.

Sen. David Tomassoni, DFL- Chisholm, said he encourages the University to continue seeking ways to involve the rest of Minnesota in its partnerships.

Bruininks also stressed the amount of revenue the University brings to the state.

Each year, the University brings half a billion dollars to Minnesota. In addition, it employs more than 20,000 people in the private sector and generates $512 million in research funds.

Bruininks said the University educates most nurses and health-care professionals in the state.

“The ‘U’ of ‘M’ is a statewide resource,” Bruininks said. “It has transformed Minnesota into what we see today.”

Susan Heegard of the governor’s office summarized the governor’s proposal for the committee. She said the governor acknowledges that higher education received less funding than expected.

“We know there is a concern about higher education’s proportion of the budget,” Heegard said. “The governor is trying to look at the state as a whole.”

Heegard said expanded prison space is one of Pawlenty’s priorities and said that it is important to keep dangerous criminals in jail.

“We have to balance higher education against other needs,” she said. “The budget request should be viewed as a give and take exercise.”

Sen. Sandra Pappas, DFL-St. Paul, said education should be more important to the governor than prisons.

“It’s ironic that prisons are a higher priority,” she said. “It costs thousands to keep someone in jail; how many kids could we educate for that amount of money?”