Last week, via a bonding bill, the Minnesota state government bequeathed the University $48.7 million for several building and infrastructure improvement projects. A significant portion of the $48.7 given to the University will be funded by state borrowing.
The University’s top bonding priority, the Translational Research Facility – a resource meant to facilitate researcher and physician collaboration in the discoveries and implementation of medicine – will receive $24.7 million from the state. In addition, the 100-year-old Jones Hall will be renovated and updated at a cost of $8 million. Additional projects on the Twin Cities and Morris campuses have also been funded.
The passage of the bonding bill has given the University’s top brass a reason to smile in a year of awful budgetary news. Not only does the state’s funding of the Translational Research Facility reaffirm the Tim Pawlenty administration’s commitment to make the University a leading bioscience research institution, but that the bonding money was granted at all is somewhat of a surprise. Capital investments like those found in the bonding bill are usually funded in even-numbered years.
However, despite the legislature’s extra-session generosity, the current state government’s overall lack of support for the University is deeply troubling. Even though the University will accrue great benefit from the projects funded by the bonding bill, the relative lack of operating budget support will generate problems that dwarf the benefits engendered by the bonding bill.
In fact, one could cogently argue that in a year where the University’s 2004-05 operating budget was slashed by $196 million, a legislative initiative to borrow approximately $50 million to defray the impact of the University’s operating budget cuts would have been a wiser use of the state’s limited credit. Before unequivocally praising the bonding bill investment, University advocates must ask themselves whether, in the long-run, an additional $50 million investment in the University’s overall budget would have produced better returns than the narrow investment in a few University buildings and research facilities will.
In addition, spending $237 million on bonding at the state level in times of state financial crisis might cause University funding problems in the future. If economic fortunes in Minnesota do not improve soon, the debt load generated by the bonding bill and other state borrowing this year could erode Minnesota’s financial standing and raise the cost of state investment and borrowing in the future. Given that the University often relies on funds the state borrows, the $48.7 million investment today could unintentionally cause less bonded investment tomorrow.
The bonding bill largess, while a welcome investment in a year of budgetary disaster at the University, will not relieve the University of the hardships to come. With University tuition jumping to more than $8,000 per year, one can only hope University students will find that investment in buildings and research facilities compensates for the lack of investment in the University in general.
