Serving the UMN community since 1900

The Minnesota Daily

Serving the UMN community since 1900

The Minnesota Daily

Serving the UMN community since 1900

The Minnesota Daily

Daily Email Edition

Get MN Daily NEWS delivered to your inbox Monday through Friday!


“The Watchers” is a film adaptation of the 2022 book of the same name by A.M. Shine.
Review: “The Watchers”
Published June 13, 2024

Demystifying the University’s budget: reallocation, appropriation and combination

After passing this year’s budget earlier this month, next year’s process gets underway in August.
The Minnesota State Capitol on Saturday, Nov. 18.
Image by Tony Saunders
The Minnesota State Capitol on Saturday, Nov. 18.

Approval by the Board of Regents is the final step in a nearly year-long endeavor to develop the University of Minnesota’s budget — a process that will ramp up again for next year in just over a month.

Created under the University president’s vision, the budget has input from stakeholders across the system, with units given instructions on what cuts they need to identify and potential investments they could make.

“We take those variables that the president has laid out and turn it into a budget process,” Julie Tonneson, the University’s budget director, said. “We create budget instructions around those and tell the units what to assume.”

Earlier this month regents approved the president’s budget, which was influenced by a state appropriation totaling half of what the University asked for and featured a 2 percent tuition increase for Twin Cities campus students

Budget discussions center around the Operations and Maintenance budget, which is funded by tuition, state appropriation and reallocation among units. The other main chunk of the budget is comprised of targeted funding, like research grants or contracts. These funds must be spent on the defined purpose and cannot generally be used for anything else.

Reaching a balanced budget involves a combination of an increased state appropriation, internal reallocation, other revenues or a tuition increase.

Each yearly process takes place within the two-year biennial funding request from the state legislature. University officials develop this request in the summer of even years, it is approved by the board, and then presented to the state. Various state government officials then develop their own visions for funding the University and eventually pass the appropriation for the next two years.

The University has about 50 units, both academic, like colleges and system campuses, and support, such as information technology and the libraries. In the fall, they work with support units and in the winter the focus shifts to academic units which generate money through tuition and fees.

“We have to get [support unit] budgets tentatively set so we know what cost pool changes look like for the academic units,” Brian Burnett, senior vice president for finance and operations, said.

How much input from individuals within units depends on both the scale of the unit and the person in charge.

“We might have a vice president who is very inclusive and involves a large number of people in their unit to develop their budget response,” Tonneson said. “Or we might have a dean that uses just their senior leadership team to do it, that’s their decision.”

After these conversations, recommendations about how to deal with the concerns and needs of each unit are made to the president. 

“Everything that the board gets reconciles back to these conversations that we have had with all of the units,” Tonneson said. Because of the differences among units, there is very little consistency in each budget conversation.

The second year of the process is the same but somewhat easier because state funding is known from the start — unless the state cuts funding, something Tonneson said isn’t unheard of.

The state might cut funding because it sees a drop in its own tax revenue, something Burnett said they don’t see happening next year.

Throughout this entire process, they meet with the board four times, as well as faculty groups and other financial officials in each unit.

Additional support for the budget comes from the University’s central reserves, which must hold at least $25 million or 4 percent of the state appropriation, except under extreme circumstances, per board policy.

The University receives tuition money in a lump sum at the beginning of each semester, but they do not spend it all right away. The University’s central reserve money is generated by making short term investments.

“We don’t just let them sit in the bank earning no interest,” Burnett said. “We don’t invest in long-term things because it’s our liquid, it’s our cash.”

Leave a Comment
More to Discover

Accessibility Toolbar

Comments (0)

All The Minnesota Daily Picks Reader Picks Sort: Newest

Your email address will not be published. Required fields are marked *