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The Minnesota Daily

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U’s financial future worries Gov. Carlson

In a letter to Board of Regents Chairman Tom Reagan, Gov. Arne Carlson chastised the University because he said it will run up a $300 million debt by the year 2000.
But Carlson has those numbers wrong, University President Nils Hasselmo said Friday.
Hasselmo said the numbers Carlson used to determine the potential budget shortfall came from the University Plan, which is a framework for University spending until the year 2000. The regents approved the plan Friday, but there has been misunderstanding about its numbers.
Cyndy Brucato, Carlson’s press secretary, said the Minnesota Department of Finance used figures from the University Plan to come up with the projections Carlson cited.
But Hasselmo said the Carlson camp just misunderstood the plan. He said the numbers the governor came up with were based on different wish lists the University would like to strive for, not the concrete fiscal reality for which administrators have already planned.
“The $300 million is the gap between our most ambitious wish list and what the reality is with a flat budget,” Hasselmo said. “There is a profound difference between a deficit and that.”
However, Brucato said she was under the impression that the $300 million was the difference between the University’s projected revenue and its least ambitious wish list.
“The governor is very confident that these budget scenarios require more money and, in fact, would put them into a deficit unless they make these changes,” Brucato said.
Reagan said he could understand Carlson’s concern when he saw the University’s projected financial picture.
“He has every right to be concerned,” Reagan said. “I don’t blame him.”
He also said the possibility that the University will fall $300 million into the hole is a slim one.
“I don’t think there’s any prospect that would ever happen,” Reagan said. “It’s unfortunate that figure is even out there.”
Every year when the board approves a new budget for the University, there are several things dropped from the list of funding priorities because the University simply can’t afford them all, Reagan said.
Reagan said Monday that he is in the process of responding to Carlson’s letter.
Brucato said the point of Carlson’s letter was not really to question the University on budget scenarios, but to raise issues about the University’s long-term financial plans.
The University Plan contains four different budget scenarios based on Hasselmo’s wish lists — ranging from the least ambitious of goals for the University to the most ambitious — all of which would require more money than is currently available, Brucato said. She added that the governor wants to know where the University will find that funding.
“The governor is looking for a strategic set of goals,” she said.
Carlson said in the letter that “the University must be the first to bear responsibility and feel the impact of fiscal decisions.”
The University is already addressing many of the concerns Carlson raised in his letter, including seeking a flat amount of revenue through tuition and state allocation, articulating a realistic vision for the University and targeting money for high-priority areas like technology, tenure changes and teaching productivity.
Reagan said he would try to make that clear in his response to the governor.
Hasselmo outlined some of the ways University officials are trying to make up the gap between what they project as revenue from the state and the amount of money needed to fund the proposed programs and projects for the future of the school.
Hasselmo said administrators are increasing enrollment, offering new programs such as new master’s professional degrees and trying to get more research funding.
The University will also be investing in ways to increase efficiency and fund-raising, as well as trying to use tuition and fee money better.
“We are refining ways to meet the needs of the University,” Hasselmo said.

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