U makes its budget pitch

by Chris Vetter

For the first time since the Legislature opened in January, University administrators on Tuesday got down to the nuts and bolts of their budget request at the Capitol.
With several weeks of campaigning under their belt, officials presented the University’s budget proposal to the Senate Higher Education Committee. The nine-member committee will consider the University’s request, along with Gov. Arne Carlson’s recommendations, before formulating a bill to appropriate state funds for the next two years.
Committee members also were formally introduced to University President-elect Mark Yudof for the first time.
The University is requesting $580 million per year over the next two years from the Legislature, which constitutes a 17 percent increase above the amount approved during the 1995-96 session. Last year, the University received $497 million from the state.
Officials, including University President Nils Hasselmo, have been giving presentations before various education committees in the Legislature during the past several weeks in hopes of justifying the large increase.
Marvin Marshak, senior vice president for Academic Affairs, said the governor’s proposed budget, which is about $100 million short of what the University requested, is a step in the right direction for the University, but he hopes the Senate committee will improve upon Carlson’s figures.
“We would like to see the governor’s recommendation be amended to give us the money we are asking for,” Marshak said.
University administrators displayed a breakdown of the budget request as it appears on a World Wide Web site. The $580 million per year would account for 47 percent of the University’s budget, with 47 percent raised by the University and the remaining 6 percent coming from tuition. This plan would make for a 2.5 percent tuition increase next year.
Each college’s request is outlined on the Website, with historical background of the level of funding each college received in past sessions.
“Every college fills out these fiscal pages,” said Richard Pfutzenreuter, associate vice president of Budget and Finance. “That was not done four years ago.” The availability of the numbers lends accountability to the University, he added.
“We are a public University,” Marshak said. “We don’t have any secrets.”
Committee members’ questions focused largely on endowed chairs, which have increased to more than 300 in the University system. An endowed chair is a gift, usually between $500,000 to $2 million, given by a private donor to the University. The money is used to pay for a professor’s salary or for a specific department’s use.
Sen. Cal Larson, R-Fergus Falls, questioned if endowed chairs could be used to replace a drop-off in funding from the Legislature.
Marshak told the committee that an endowed chair is used to give a department an edge over the competition, and cannot be factored into the budget request.
“There is no more powerful disincentive to a donor than to say that their money is replacing state funds,” Marshak said.
Each year, the University of Minnesota Foundation uses approximately 5.5 percent of the money raised through endowed chairs to fund a department or a salary. The remaining money is then invested into stocks and bonds, Marshak said.
The University ranks 15th overall among all universities, and fourth among public institutions, in the amount of money it brings in through endowed chairs.
Prior to the discussion of endowments, legislators held an informal discussion with Yudof, who on July 1 will replace Hasselmo. Yudof answered questions ranging from his work on property taxes in Texas to a book he wrote on gender equity. Yudof displayed his characteristic wit in his answers to committee questions.
“My experience with property taxes is very much like a Russian novel: it is long, tedious and everyone dies in the end,” Yudof joked.
Yudof praised Hasselmo’s work at the University, specifically mentioning his commitment to improving undergraduate education by getting more students to live on campus, and moving more professors from the laboratory to the classroom.
However, the University can improve, Yudof said. University classrooms need to be updated with changing technology, and University staff and faculty need to be properly paid, he said.
“I do think it is important that we pay appropriate attention to faculty salaries,” Yudof said.
The senate will hear more of the University’s budget request today.