A state Senate higher education committee voted to increase the University of Minnesota’s funding by $80 million Tuesday, despite some reservations from policymakers.
The Senate’s recommended allocation comes after both the House committee and Gov. Mark Dayton proposed increasing state funding, something the University said was crucial to freeze tuition for undergraduate in-state students in 2014 and 2015.
The bill splits higher education funding almost evenly between the University, state-funded colleges and universities and the Minnesota State Grant Program, which mirrors what the governor recommended in his initial budget proposal.
“We really did do what the governor requested,” said Sen. Terri Bonoff, DFL-Minnetonka, who chairs the committee.
University Chief Financial Officer Richard Pfutzenreuter said the committee’s action is “terrific news” for Minnesota undergraduate students because it would hold tuition down for the next two years.
“We’re really thrilled that the Senate has agreed with the governor on that proposal,” he said.
While the House, Senate and governor each allocated $42.6 million to freeze tuition, the House gave $18 million less for research. It also proposed giving about $11 million to the state grant program, about $70 million less than the governor and Senate.
Although passed, several legislators proposed amendments and voiced concerns about the University’s request for increased state funds.
Bonoff said she “didn’t appreciate” the University’s approach.
“We did actually meet the University’s request for funding, but I felt as though it was a … threat and wasn’t the way I like to work,” she said.
At the hearing, Sen. Kathy Sheran, DFL-Mankato, presented an amendment, which was defeated, to the bill that would have increased the Minnesota State Grant Program’s allocation by nearly $24 million — money that some legislators suggested would have come from the University’s portion.
She said she would rather have the state dollars go directly into the hands of students for financial aid instead of into the institutions to decide where to spend.
Some voiced concerns the state money set aside for tuition relief wouldn’t be used to offset the costs for students.
Sen. Julianne E. Ortman, R-Chanhassen, said she was concerned with where state appropriations would be going in light of the news concerning the University potentially buying Fairview Health Services.
“I don’t want this $80 million to be put into a pot” for expenses that don’t benefit the University’s students, she said.
Bonoff said she plans to schedule a committee hearing in the upcoming weeks to evaluate the University’s role in the Fairview talks.
Sen. Eric Pratt, R-Prior Lake, offered an amendment, which was later withdrawn, that would have required the at least 50 percent of the University’s portion of the state funds go toward academics.
“I don’t think it’s our role, the Legislature’s role specifically, to numerate ways the University spends money down to the percentage,” Sen. Branden Peterson, R-Andover, said. “But I do in some respect blame the University for their approach in particular this biennium” as to why legislators are proposing these regulations.
Julie Tonneson, associate vice president for budget and finance at the University said the institution would need time to evaluate Pratt’s proposal to “gauge what it really means.”
Pratt said the amendment will get another look when the bill moves to the House Finance Committee next week.
The $80 million allocated in the bill for the University would freeze undergraduate resident tuition for the next two years and aid in funding research initiatives.
The legislation would save families thousands of dollars and help relieve the financial burdens students face, Bonoff said.
Not just yet
Like in past years, the University must meet three of five performance goals in order to get all of its funding. But this year, 5 percent of money for operations and maintenance could be withheld — not 1 percent.
One of the goals aims to decrease the University’s budget on administrative oversight — an action following criticism of alleged administrative bloat.
Bonoff said at Tuesday’s hearing that reports analyzing administrative costs, similar to the March analysis, must continue throughout the year.
Other goals pertain to increasing graduation rates and the number of science, technology, engineering and mathematics degrees awarded at the University.
Other stipulations attached to the University’s funding require it to improve health care in rural communities, show progress in specific agricultural initiatives and improve its mental health centers by increasing the number of professionals.
The House Higher Education and Finance Committee, chaired by Rep. Gene Pelowski Jr., DFL-Winona, is scheduled to vote on its omnibus higher education bill Monday April 15.
Pfutzenreuter said the University will keep “making their case” until the session adjourns in May.