University officials weigh in on tuition cuts

State representatives proposed a $6.5 million cut to the University's budget.

Ahnalese Rushmann

State Rep. Tom Rukavina, DFL-Virginia, said he’ll present a proposal to state legislators Tuesday that offers an approximate $6.5 million budget cut to the University.

The offer would cut significantly less than the $27 million proposed by Gov. Tim Pawlenty.

The governor, facing a $935 million state budget deficit, has proposed a $54 million cut to state higher education – half of which would be slashed from University funding.

“I think any reasonable person would try to solve this problem with a combination of cuts and revenue increases,” said Rukavina, chairman of the Higher Education and Work Force Development Policy and Finance Division.

Officials from both the University and Minnesota State Colleges and Universities have said they could live with a $6.5 million budget decrease, he said, adding the smaller cut is less likely to affect students through sharp tuition hikes.

Research and technology scalebacks, layoffs and a tuition increase could be the University’s only options, University President Bob Bruininks said to the House Higher Education Committee earlier this month.

Next year, tuition cost is expected to climb 7.5 percent for students with a family income more than $150,000.

Raising tuition is a last resort, said University Chief Financial Officer Richard Pfutzenreuter, adding he hoped the eventual cut would be in the $7 million to $10 million range.

State public four-year institutions’ average net tuition and fees was $4,720 for first-year, full time students in 2005-2006, according to a 2008 report from the Minnesota Office of Higher Education.

The state cost was nearly twice the national average for similar institutions, which was around $2,440.

University senior analyst Peter Zetterberg said large states, where many low-income students receive Pell and state grants, drive the national average down.  Public campuses in states such as California and Texas typically have lower tuition rates than the upper Midwest and Northeast, he said. 

“The problem with the statistic is the suggestion that ‘this is what college costs’ as in ‘this is how much tuition is,”  Zetterberg said. 

The numbers indicate net tuition after scholarships and grants, he said, using weighted averages for all students in all public institutions.

“It isn’t that we sit here and say ‘let’s raise tuition 2 percent because we think we can

get away with it with the students,’ ” Pfutzenreuter said. “We’re Ö looking at what we can delay or slow down, what we can cut.”

Tightening library investments and hiring new faculty are examples of such postponements, he said.

Expenses like fuel costs and technology licensing contracts have to be paid, Pfutzenreuter said, which means cuts could take place within the University’s human resources.

“We’re a people business,” he said. And if necessary, “it comes to cutting people.”

With the proposed tuition increase for the 2008-09 academic year, students from families with an income less than $150,000 would be able to receive a 2 percent buy-down.

“The president wants to stay committed to that buy-down,” he said. “To stay committed, that cut has to be smaller from the state.”

Earlier this month, Pawlenty spokesman Alex Carey told the Daily that $27 million represents just 0.9 percent of the University’s budget.

But Pfutzenreuter said the seemingly small number is still significant, because the University can’t use federal dollars for things state funding would’ve covered.

“It’s restricted to a purpose,” Pfutzenreuter said. “Money’s not all green at the University.”

Almost 67 percent of graduating seniors at Minnesota’s public four-year universities in 2006 had borrowed to pay for their education, according to the report – roughly 6 percent more than in peer states.

The total average debt for those students was $20,933, compared with $19,406 for students in similar states.

Rukavina said House spending and finance bills should be on the floor by the end of this week.

Pfutzenreuter said the University’s budget, including a tuition proposal, will go before the Board of Regents in May, instead of April, when it was originally scheduled.

“That’s as late as we can wait,” he said.

The Regents’ budget review will be followed by a public hearing, Pfutzenreuter said, with a vote for approval at the June Board meeting.