U confronts budget crunch

The University has yet to target specific cuts

by Paul Sand

Facing tough choices on how to address a recently announced $25 million reduction in state funding, University officials said they are not prepared to discuss where the pending institutional budget cuts will be made.

The reduction is part of Gov. Tim Pawlenty’s emergency plan to balance the state’s $356 million budget deficit by June 30.

This reduction comes less than one year after the state rescinded approximately $24 million in University funding in an attempt to balance the state’s budget before the end of the last fiscal year.

The University’s cuts make up a more than 7 percent reduction of the institution’s original 2003 operating budget and will have far reaching institutional effects, said University Provost Christine Mazier.

“These cuts will be felt by every campus, every school and every support unity at the University,” she said.

Richard Pfutzenreuter, the University’s chief financial officer, said it will take time to determine where cuts can be made because most of the University’s finances are controlled by individual colleges. He said the University will have an itemized list of accounts ready by Jan. 27.

Pfuztenreuter stressed the difficulty in making cuts because some University funds are designated for a specific use, for a particular research project or equipment.

The $25 million cut comes at a time when the state is grappling with another problem – an estimated $4.2 billion state deficit in 2004. However, lawmakers must first address these cuts in a relatively short window of time.

“Finding a solution to the state’s $350 million deficit is a great challenge with less than six months remaining in the fiscal year,” Maziar said.

Managing these cuts will prove difficult, particularly given the rising number of applicants to the University, she said. First-year student applications are up 22 percent from this time last year.

“It’s important, especially when young people are making decisions about whether or where to go to college, that the people of Minnesota are assured: The University is open for business,” Maziar said.

Pawlenty unveiled his emergency budget plan Jan. 14, just days after swearing in. The plan calls for a $50 million reduction in higher education spending. The Minnesota State Colleges and Universities System will also see a $25 million cut. The MnSCU system includes St. Cloud State University, Minnesota State-Mankato and Winona State University among others.

Pawlenty’s plan also includes permanent state government budget reductions and the transfer of funds from existing projects, including the refinancing of highway projects. The reductions total $171 million.

The plan gives more flexibility to state agencies and higher education systems by allowing them to shorten the work week and retain a pre-existing hiring freeze to stave off potential layoffs.

Maziar said efforts will be made to shield University students from absorbing the cut. She said the University will not raise tuition for this semester and will try to leave scholarship funds untouched.

Mazier has previously said any further reduction of state funding will result in a higher-than-proposed tuition increase next year.

Although the University will not have firm answers for another week, Maziar is maintaining a realistic outlook.

“We understand that we in higher education and at the University must be a part of the solution,” she said.

Paul Sand welcomes comments at [email protected]