Pawlenty’s reallocation plan will not adversely affect health center

by Dan Haugen

Gov. Tim Pawlenty’s plan to reallocate money from Minnesota’s tobacco settlement endowments would not adversely affect the University’s Academic Health Center, said Frank Cerra, senior vice president for health services.

Following Minnesota’s $6.1 billion settlement with the tobacco industry in 1998, the Legislature created two endowments benefiting the Academic Health Center.

Pawlenty’s proposed fix for the state’s projected $4.2 billion budget shortfall for 2004-05 would drain both funds, but would also give the Academic Health Center approximately $21.5 million per year from the state’s existing tobacco tax revenue.

Cerra said the University initially expected the endowments to generate approximately $25 million per year, but recent market conditions lowered those hopes. Pawlenty’s proposed $21.5 million annual allocation is based on the endowment funds’ estimated 2003 fiscal year return.

“What’s important to us is a sustained source of dollars over a long period of time that allows us to continue doing what we were doing with this revenue,” Cerra said.

In October’s State of the Academic Health Center address, Cerra credited the endowments with financially stabilizing the Medical School.

Without lowering enrollment in any other areas, the University has increased enrollment in nursing, pharmacy and public health programs since 2001, according to an accountability report delivered to state lawmakers this winter.

-Dan Haugen