Next tuition increase won’t be quite so big

by Brad Unangst

University students can expect another tuition increase next year, but nowhere near the double-digit increases of the past two years, University officials said Friday.

The proposed increase is part of the University’s upcoming two-year operating budget request headed to the Legislature for approval this session. The operating budget includes money for the University’s core operations and is approved by the Legislature every odd-numbered year.

“It will not be double digits. I think the (Board of Regents) and the president are committed to not doing that,” University Chief Financial Officer Richard Pfutzenreuter said.

The increase is only one aspect of the plan, which also includes a modest increase in state funds and a reallocation of existing funds.

While Pfutzenreuter wouldn’t discuss specific numbers, he said the University is prepared to ask for significantly less that it has in previous years because of the looming state deficit, which some officials estimate at nearly $3 billion.

“The last three biennium we’ve been in the $200-plus million asks. Frankly, we’ll be half that,” Pfutzenreuter said.

According to a state Web site, the University received $109 million after asking for $221.5 million for 2002-2003. Last spring, the state rescinded approximately $24 million in funding, as lawmakers cut state spending to balance the budget.

Provost Christine Maziar said the University’s need to get by on less state funding is common to other public research institutions.

“That won’t make some of the choices that as a campus we need to make any easier,” she said, “but it does help us feel that we can make the choices that will help ensure we’re in a position when the economy takes a turn around.”

Officials said the plan does not include all of the University’s needs and is “reasonable” given the state’s financial situation because it balances funding between the state, the University and its students.

The budget plan will be sent to the Board of Regents for review in early October and is expected to be approved at its November meeting. The University plans to present it to the state following board approval.

But what the University asks for and what it gets could be completely different.

The state’s new governor and Legislature, along with the final economic forecast, will have an effect on the University’s final state appropriation. While elections this November leave some question, the state’s financial situation seems clearer.

State officials called Minnesota’s deficit a “sizable financial problem.”

In July, the Minnesota Department of Finance asked all agencies that receive state funding to prepare for a 10 percent budget reduction based on the forecasted state deficit.

State officials recommended agencies prioritize their budgets and create alternative plans in case the reduction occurs.

“It’s always difficult to ask agencies to propose reductions, but it is better to put things on the table than to have the Legislature do an across-the-board reduction,” said Charlie Bieleck, budget planning director at the finance department.

The University is preparing alternatives but hoping its pared-down budget request will be approved as is.

“This has been a state that has a long history in investing in education,” Maziar said. “I’m placing my bets with the state.”

If the University doesn’t get what it asks for, it would likely not cut specific programs or activities, Pfutzenreuter said. Instead, students will see higher-than-planned tuition increases and University staff will experience cutbacks.

Donna Peterson, the University’s chief lobbyist, said even with the uncertainty in the upcoming legislative session, she plans to present the University’s case for the proposed budget by highlighting its accomplishments in accountability, research and faculty.

“We need to talk about what are the outcomes in spending money (on the University),” she said.

Interim University President Robert Bruininks, who called the budget plans the most challenging in 15-20 years, said the University’s request will be credible and only include its true needs.

“By being credible, we have a greater opportunity to tell the University’s story,” he said.

The University isn’t the only state higher education system to propose a scaled-back budget plan. Minnesota State Colleges and Universities is preparing to request less from the state as well.

MnSCU, which is made up of the state’s other universities, community colleges and technical schools, will ask for $107.3 million – less than half of its last two-year request, officials said.

The University and MnSCU receive roughly 10 percent of the state’s overall 2002-2003 operating budget, which also includes funding for health care, housing, public safety, natural resources, agriculture and state agencies and local governments.