University officials could dig into students’ pockets to revamp Walter Library and construct a new biotechnology center.
As parts of the University’s $249 million capital budget request, the school and state would have to pay back the loan which essentially makes up the proposal. School officials are investigating a variety of options for funding the debt payments, with tuition increases as one possibility.
Several legislators pressed University President Mark Yudof on Friday to say whether tuition hikes would fund the budget request. Yudof was presenting the largest request in school history to the House Higher Education Finance Division.
If approved, the bonding bill would finance building construction and renovation, including restoration of Ford and Murphy Halls and the transformation of Walter Library into a digital technology center.
The state pays for budget appropriations by selling state bonds, giving it the name “bonding bill.” People who purchase the bonds basically loan money to the state.
Over the next 20 years, the state will pay two-thirds of the debt and the University is responsible for the remaining portion, or more than $70 million.
“I just want to be sure that as we move forward we are sensitive to the tuition question,” said Rep. Lyndon Carlson, DFL-Crystal.
Because of the sheer size of the University’s request, some legislators worry the school will have no choice but to hike tuition.
“We’re going to owe more money on the debt to the state because of this bill,” acknowledged Richard Pfutzenreuter, the University’s assistant vice president for the Office of Budget and Finance. He added that an increase in the debt does not translate directly into an increase in tuition.
When questioned about tuition hikes by House members, Yudof gave vague answers, which leaves open the possibility for such increases, said Rep. Satveer Chaudhary, DFL-Fridley.
Although Yudof did not promise the committee that tuition would remain stable, he told others he intends to keep tuition low, suggesting a 2.5 percent to 3 percent raise for next year.
Yudof did indicate that food service, housing, parking and other revenue producing organizations at the University would partially fund debt payments.