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Higher ed finance bill offers funding increases, debt help for students

Rep. Bud Nornes, chair of the House Higher Education and Career Readiness Policy and Finance Committee, and Committee Legislative Assistant Megan Hennen follow along as staff review provisions of the committee’s omnibus bill March 22. Photo by Paul Battaglia
Rep. Bud Nornes, chair of the House Higher Education and Career Readiness Policy and Finance Committee, and Committee Legislative Assistant Megan Hennen follow along as staff review provisions of the committee’s omnibus bill March 22. Photo by Paul Battaglia

Updated 7:08 p.m. with committee action

Focused on investing in the future and helping students receive an affordable education, legislators are looking to ensure funding stays stable for post-secondary institutions across the state.

HF2477, the omnibus higher education finance bill sponsored by Rep. Bud Nornes (R-Fergus Falls), would increase higher education funding for state public institutions while also offering some policy provisions. It would also create a wide range of student loan forgiveness and counseling programs that could affect all higher education students.

The House Higher Education and Career Readiness Policy and Finance Committee approved the bill, as amended, on a split voice vote Thursday evening and sent it to the House Ways and Means Committee. Its companion, SF2214, sponsored by Senate President Michelle Fischbach (R-Paynesville), awaits action by the Senate Finance Committee.

In total, higher education spending would reach $3.22 billion from the General Fund in the 2018-19 biennium, an increase of $149.5 million from the current two-year total.

Rep. Gene Pelowski Jr. (DFL-Winona) noted the House target is $50 million higher than the Senate, and expressed concern that if a conference committee agreement further reduces the House number, it will lead to even more increased costs.

In the House bill, Minnesota State would receive $1.4 billion over the period, an increase of $42 million in Fiscal Year 2018 and $51 million in FY 2019.

Most notably, $35 million in Fiscal Year 2018 and $44 million in Fiscal Year 2019 would be allocated to provide student relief via reducing tuition rates by at least 1 percent at all colleges. Further protecting students’ budgets, the tuition decreases may not be offset by mandatory fees or other charges. An appropriation of $10 million over the biennium would be used to update the statewide integrated records system.

Five percent of operations funding, or $687 million, in Fiscal Year 2019, would be contingent upon meeting specific academic and enrollment performance goals.

Laura King, chief financial officer for Minnesota State, noted the bill contains only about half of the $178 million in new funding the system requested and the tuition changes are a concern. “If this bill becomes law, our campuses will have significant financial pressure,” she said.

As the state’s largest public post-secondary institution, the University of Minnesota would receive $1.1 billion over the biennium, an increase of $10 million and $12 million in the respective fiscal years. The university’s budget request was $147.2 million.

Over the period, programs funded include agriculture extension services ($85.8 million), health sciences ($18.4 million) and the Mayo Foundation partnership ($16 million). However, none would receive a base increase. The bill calls for an additional $15.6 million for health training restoration.

Similar to Minnesota State, 5 percent of Fiscal Year 2019 operations funding, or $569 million, would be contingent upon the university meeting specific academic and enrollment performance goals.

Julie Tonneson, the university’s associate vice president for budget and finance, expressed concern that the proposed funding is not enough to help the university maintain its core mission, which includes competitive compensation, research and technology infrastructure and facilities operation and maintenance. More than $68 million was sought for this.

Among her concerns, she said the university has cost increases that cannot be solely covered through reallocation and she believes it is critical to provide a modest salary increase for staff.

The Office of Higher Education would receive $501 million during the biennium, a $33.8 million increase. The largest portion would go to state grants, allocating $193 million per year.

Notable programs funded include student work-study ($14 million annually), interstate tuition reciprocity ($11 million annually), and the creation of dual-training competency grant program, as well as, the spinal cord and traumatic brain injury research grant program (both $2 million annually).

 

Other notable provisions would:

  • require a public post-secondary institution to admit an applicant who is in the top 10 percent of their high school graduating class;
  • establish a workforce development scholarship to incentivize students to enter high-demand occupations after high school graduation;
  • fund a program for student debt counseling through the Department of Education;
  • create student loan forgiveness programs for people who relocate to Greater Minnesota, or pursue aviation, agricultural or teaching degrees; 
  • prohibit mandatory student activity fees at public post-secondary institutions;
  • establish a scholarship program for qualified teachers of color; and
  • create an academic program for students with intellectual disabilities at Minnesota State.

 

What’s in the bill?

The following are selected bills that have been incorporated in part or in whole into the omnibus higher education finance bill:


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