A Board of Regents subcommittee Thursday discussed ways for the University to find new revenue sources besides further tuition hikes or an increased dependence on state money.

In a presentation to the committee, chief financial officer Richard Pfutzenreuter said the University received a $9.3 million drop in state funding between July 1, 2002, and June 30.

However, he said total University revenue increased by $108 million, or 5.4 percent, during that time, largely because of tuition and student fee increases.

Regents said continued tuition increases are not a long-term revenue solution.

Pfutzenreuter opened the revenue generation discussion by posing a hypothetical question: What innovative concepts or ideas would be available to raise $50 million in new, recurring revenue from nontraditional sources?

Fifty million, he said, was just a hypothetical number.

Aside from the Medical School and the Institute of Technology, most University schools depend on tuition for most of their revenue, Pfutzenreuter said.

Any new revenue sources would have to be broadly distributed and not limited to any one school, he said.

Regent William Hogan said he appreciated Pfutzenreuter’s candor when discussing a topic filled with potential problems for the University.

“This can be unnerving, finding these different ways to generate revenue,” Hogan said.

Ideas were slow to come out of the committee, but among the possible options would be more initial investment in Minnesota start-up companies, with the University sharing in the revenue stream as opposed to receiving royalties or equity.

“We’ve obviously been quiet today,” Hogan said of the lack of ideas put forth.

Buying, overseeing or investing in Minnesota companies is different than the academic business investments in which the University normally participates, such as start-ups built off of University research developments, Pfutzenreuter said. Any new revenue sources must stay true to the University’s guiding principles.

“We are an educational institution,” he said. “We couldn’t run the hospital.”

Hogan said this must be explored further, because tuition is too high and expanding too fast to maintain.

The next step, Hogan said, will be for University staff and departmental heads to discuss appropriate ways for the University to generate more revenue.

“Don’t go out and buy companies that make cookies,” Hogan said. “Let’s be innovative within the confines of what we should do as a University.”