The University of Minnesota has become a likely victim of the stateâÄôs fight to close the $5 billion deficit, facing almost $250 million in projected cuts over the next two years.
Gov. Mark Dayton vetoed the higher education funding bill, which would cut 18.9 percent in the UniversityâÄôs forecast funding from the state, on Tuesday afternoon.
Though the cuts to the University will be uncertain until the budget is finalized in a special session, University administrators are preparing for the worst.
In a preview of a budget that will be released in the coming weeks, President Bob Bruininks said the University may institute a 5-percent tuition increase, a year-long wage freeze for employees and a decrease in contributions to retirement funds.
âÄúIf you want to compromise the long-term future of the state, then I think you pass budgets with deep and long term sustained reductions to higher education,âÄù Bruininks said. âÄúBut if you care about protecting the stateâÄôs future, you moderate these cuts.âÄù
While acknowledging that the budget cuts were significant, Sen. Michelle Fischbach, R-Paynesville, chairwoman of the Senate Higher Education Committee, said the legislation provides institutions with âÄúsome increased revenueâÄù through tuition increases, though students would be protected from drastic âÄúdouble-digitâÄù tuition increases.
The funding bill caps tuition increases at 5 percent.
The proposed cuts will leave the University scrambling to cover a gap of more than $120 million when additional costs like software upgrades and building operating expenses are considered, said Richard Pfutzenreuter, chief financial officer at the University.
Board of Regents chairman Clyde Allen said undergraduate tuition rates would increase by 5 percent in the first year and 4 percent in the second.
The University had planned to increase tuition by about 5 percent before the funding billâÄôs passage, Allen said.
Graduate programs are likely to follow the same rates, but professional programs âÄî like those in medical and law fields âÄî may see higher tuition hikes.
There will also likely be larger class sizes and fewer class offerings in the future, Bruininks said.
In a letter to Fischbach, Sheila Wright, director of MinnesotaâÄôs Office of Higher Education, wrote that cuts in funding to the University and the resulting tuition hikes âÄúwill have adverse effects on the middle class.âÄù
Bruininks added legislators werenâÄôt considering the UniversityâÄôs role in creating and maintaining jobs through its economic activity.
âÄúIf you cut the University of Minnesota, youâÄôre cutting jobs in the private economy,âÄù Bruininks said. âÄúItâÄôs just that simple.âÄù
Allen agreed that the large cuts to the University in recent years could lead to difficulties in recruiting new employees seeking a reasonable salary.
âÄúWeâÄôre already beginning to see slippage in wages compared to our peers,âÄù Allen said.
If the trend of deep cuts continues, he said the University might lose its ability to compete as a quality educational institution in the future.
âÄúI donâÄôt think weâÄôre at a dangerous point right now, but weâÄôre close a tipping point when you do this year after year after year,âÄù Bruininks said.
