U educational services hit by economy

The University charges fees for a variety of services it provides outside of the classroom.

The sale of educational services is safe from potential state budget cuts facing the rest of the University of Minnesota, but these services have been hit hard by the economy. University departments raised $159 million by charging the public for the services they provided in 2008, a 14.7 percent increase from 2007. A lionâÄôs share of that money, $141 million, came in through branches of the Academic Health Center last year, and made up 11 percent of the centerâÄôs budget. Nick Hanson, a spokesman for the AHC, said the money mostly comes from the Veterinary Medical Center and University dental clinics . But they will not be able to increase that revenue to grow out of present financial difficulties. The VMCâÄôs hospital started feeling the effects of the recession as demand for veterinary care began to decrease over a year ago, said Dr. David Lee, the VMCâÄôs hospital director. The animal hospitalâÄôs case load has been down about 10 percent, he said. And because $20 million of the VMCâÄôs $25 million total budget comes from service fees, direct impacts of the recession are more damaging than potential state budget cuts. The hospital has had some layoffs, but it made it through last year primarily by freezing positions and reallocating faculty, Lee said. University dental clinics also count on fees to cover the costs of providing care. But, Hanson said, they still lose money because of the high number of uninsured patients they take on. Also, many of the clinicsâÄô patients are covered by government programs that set prices, so the clinics donâÄôt even cover their own operating costs. The University maintains the dental clinics and the VMC because they provide training opportunities for students. Other areas of the University, like its Extension Service, have seen fees grow as a part of their revenue stream. The Extension Service has gotten most of its funding from government sources for the greater part of its history, and there has been little or no charge for the extensionâÄôs educational services, said Beverly Durgan, the dean of extension. But now, because of budget reductions, many extension programs âÄî such as agricultural education workshops âÄî have been starting to charge fees, she said. The roughly $2 million the Extension Service charged in fees last year made up about 4 percent of the budget, Durgan said. Those fees will be more important to the extension in the future, as other revenues decrease, she said.