As budget discussions ramp up, colleges and units across the University of Minnesota system are designating funds for possible reallocation.
The University’s compact process requires different schools and non-academic units in the University system to reallocate money from their budgets to be used for investment across the five campuses. Colleges and non-academic University units are beginning to present their reallocation plans to budget officials to shore up potential budget shortfalls systemwide.
Some regents and budget officials view the compact as an added revenue stream beyond state appropriations and tuition.
“We count on this as a necessary part to balance our budget,” Julie Tonneson, the University’s budget director, said at a February Board of Regents meeting said at the meeting. “We expect our managers to find efficiencies every year.”‘
The current fiscal year’s process requires units to create plans targeting 0.6 percent and 1.2 percent of its budget. The plans are decided depending on the amount of state funding and tuition dollars.
This year, Gov. Tim Walz’s proposed budget would fund a little over a third of the University’s request.
“As we go above 1 percent, we start worrying about and having to think about the greater impact on our program’s scope, in some cases, and on quality,” Tonneson said.
For the College of Liberal Arts, which has the largest budget and the most money on the table for reallocation, the targets mean the plans would propose cuts of $1.37 million and $2.74 million. Proposed cuts won’t necessarily be reallocated, and less than half of CLA’s proposal left the college last year.
The compact process for fiscal year 2019 resulted in $22.3 million in reallocations systemwide, which made up roughly half of the year’s increased resources, according to University budget documents. More than a quarter of reallocations came from mission-related reductions, such as eliminations of faculty positions and reduction in research, education programs and outreach.
Last fiscal year, a total of about $1.5 million was moved to the Morris and Crookston campuses as part of the budget process to address tuition shortfalls. Another $1.5 million went to the Duluth campus, and $1.8 million went to the Law School to offset financial deficits, according to University budget documents.
The upcoming fiscal year’s process is the first after the conclusion of a six-year initiative by President Eric Kaler to reallocate $90 million in administrative spending. As state appropriations have lagged in recent years and as tuition has increased, reallocation through the compact process has been vital for balancing the University’s systemwide budget.
The Board of Regents approved tuition hikes for out-of-state students in December on the Twin Cities campus. Kaler has also discussed increases on tuition that roughly matches inflation rates for resident students on the Twin Cities. While at other campuses, Tonneson said the University has tried to keep tuition flat for “competitive reasons.”
After a concerted push for cutting administrative spending, John Coleman, dean of CLA, said this year’s compact process proves difficult.
“If there were any low hanging fruit, it would have already been plucked from the tree,” Coleman said.
The compact process also allows academic units to identify areas of investment to further the mission of the college and provide more benefits to students.
Pointing to scholarships for rural students and an increase in mental health professionals funded by reallocation, Regent Thomas Anderson said the process helps the University prioritize.
“We’re not saving the total budget dollars, we are reallocating them to the top,” Anderson said in the meeting.
