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The Minnesota Daily

Serving the UMN community since 1900

The Minnesota Daily

Serving the UMN community since 1900

The Minnesota Daily

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U budget a balancing act

Managing a checkbook can be tedious for some people, but so can managing the finances of one of the largest universities in the nation.

With unions picketing before their offices along with limited state funding, the University administration has to work hard to provide a balance with their expenses, according to officials.

Every two years, the University goes to the state Legislature with its budget request, University Chief Financial Officer Richard Pfutzenreuter said.

It is rare when the state’s response to the budget proposal provides any money for salary increases, he said.

“The governor and Legislature seem to think that pay increases for state employees have to get carved out of already existing budgets,” Pfutzenreuter said.

One group of state employees, the American Federation of State, County and Municipal Employees, began its next round of contract negotiations with the University on Thursday.

Carol Carrier, vice president of Human Resources, said the University does not have an abundance of reserves lined up for salary increases for staff and faculty members.

Pfutzenreuter said that after the state creates its budget, there is no asking for more money, and the University has to work with what it is offered.

“I’ve been in front of the unions to say, At this point in time, here’s your choice. It’s pretty standard,” Pfutzenreuter said.

The Legislature prefers to fund new developments in higher education, he said.

The previous budget request proposed raising tuition to pay for debt, salaries and new buildings, he said.

The second part of the request was to allocate new money for student scholarships, research and new faculty.

Pfutzenreuter said the University does not always get everything it asks for.

“Things like new buildings and new faculty seem more attractive than giving employees salary increases,” he said.

“If it’s not glitzy stuff, the state tends to shy away,” Pfutzenreuter said.

Budget and Finance director Julie Tonneson said the University went into its last budget request knowing the University did not have money for salary increases, building operations and debt assistance.

“So with that, our requests focus on things we assume the state will respond to,” Tonneson said.

Pfutzenreuter said 85 percent of the budget is tied up in salary and fringe costs.

“We’re a people business, and we’d love to give our employees raises and make them better than the marketplace,” he said. “But in reality, we’re not going to massively lay people off or massively raise tuition.”

With state funding cuts, University financial resources are strained. This leaves the options of terminating employees or raising tuition, Pfutzenreuter said.

Tonneson said, “The state has not done a good job of funding us, and general wages have not been funded in a long time.”

She said University President Bob Bruininks has a tough balancing act to make.

Carrier said the University has to worry about turnover and recruitment for employees.

“We have to always keep an eye on the market,” she said.

There are committees that create market tests and salary comparisons for faculty and staff members both regionally and nationally, Carrier said, and employees are being recruited on a regional and national level.

The University administration understands there are different kinds of employees for different kinds of work, Carrier said.

“We want strong people in all of those fields,” she said.

Carrier said that on average, staff employee salaries are close to the local average, but the University is always trying to improve.

Pfutzenreuter said that if there were a strike, employees would not earn compensation and the institution would not get its work done.

“A strike would hurt everyone as a whole,” he said.

While dealing with the budget, the University sincerely strives to treat all employees fairly, she said.

“Personally, I feel strongly about making life as good as it can be for our employees,” Carrier said.

Pfutzenreuter said sometimes people forget about the hidden operating costs of the institution.

“Yes, being competitive in the market is important, but so is keeping the lights on.”

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