Stimulus doesn’t offer answers to possible U layoffs

The stimulus funds are unlikely to prevent layoffs in the future.

Even as the University of Minnesota prepares for stimulus funds from the state to alleviate the strain of Gov. Tim PawlentyâÄôs budget cuts, state and school officials say the funds are just delaying the inevitable The exact amount of money the University will receive from the stimulus package wonâÄôt be finalized until May, University Vice President of Budget and Finance Richard Pfutzenreuter said, and any money received by the University will only go to fill the gap in funding made by the governorâÄôs initial cuts. Currently, the governorâÄôs proposed budget decreases the UniversityâÄôs base funding by $36 million for 2010-11 on top of his initial $75.5 million cut. The cut in base funding means that at least $72 million of the stimulus money received by the University will go toward filling the gap created by the governorâÄôs proposed decrease in yearly funding. In this way, the one-time stimulus money is less like an answer for the University, instead offering it more time to better decide where cuts need to be made. According to Pfutzenreuter, after the stimulus money is depleted, the UniversityâÄôs budget will be lower than before receiving the money, making the University cautious as how to spend it. âÄúKnowing what the future holds, we cannot spend this money in a manner where we will have to make cuts all over again in two years,âÄù Pfutzenreuter said. âÄúBut the priority is to retain jobs, provide financial support for students, and help the University move along the way to the smaller base budget in two years.âÄù Pfutzenreuter acknowledged that while the stimulus money may delay University workers from being let go, it will not prevent possibly hundreds of positions from being cut in 2012. âÄúThe money will allow the University to give notice,âÄù Sen. Sandy Pappas , DFL-St. Paul, chairwoman of the Minnesota Senate Higher Education Committee, said. Besides allowing the University to gradually downsize as opposed to initial drastic job cuts, Pappas said she hopes the stimulus money will also mitigate higher tuition rates for students, citing 2004-05 when tuition increases were high after big cuts were made to University funding. In an attempt to alleviate job cuts, the University offered a Retirement Incentive Offer (RIO) to all employees, giving the retiree three years of medical and dental coverage. According to the University, 449 employees took the RIO, which states the person can become reemployed by the University after four months, but only in a non-benefits position and at 19.5 hours a week. Although the current budget and stimulus package have not been confirmed, Pfutzenreuter said the University is already looking beyond to 2012. He said if the base funding for 2012-13 biennium decreases, it could mean the University will find itself in a dire situation financially where higher tuition and even more cuts would be necessary.