With the ink barely dry on the latest round of state cuts to higher education funding, officials from the University of Minnesota and the Minnesota State Colleges and Universities system are already planning for more cuts next year.
“The state’s fiscal outlook at this juncture in the process is as bad as I’ve ever seen it,” said MnSCU Vice Chancellor and Chief Financial Officer Laura King. “As we think about biennial budget planning, it’s a question of bad or worse, from an outlook standpoint.”
During the last two years, the state’s ongoing fiscal problems have led to a series of budget cuts and unallotments to higher education. From $713 million in fiscal year 2008, the university has seen its state funding drop to just $591 million for fiscal year 2011. During that same period, MnSCU has gone from $667 million to $606 million.
The supplemental budget bill signed by Gov. Tim Pawlenty April 1 sets the institutions’ base funding at a higher level in fiscal year 2012; however, neither MnSCU nor the university seems to think they’ll actually get the amount promised.
“I think that’s wishful thinking,” said Richard Pfutzenreuter, vice president and chief financial officer for the university.
On April 7, Pfutzenreuter, King and other officials presented their institutions’ respective 2012-13 biennial budget plans to members of the House Higher Education and Workforce Development Finance and Policy Division. The plans include layoffs, closure of academic programs, salary freezes or cuts, reduced services and tuition increases.
At the university, Pfutzenreuter said 1,200 faculty, staff and student positions are being cut through early retirement incentives, elimination of vacant positions and layoffs. In addition, tuition increases, temporary salary reductions and furloughs are also in the works. Finally, the university is restructuring various campus services: delaying classroom upgrades, repairs and replacements, and reducing maintenance and cleaning.
Some MnSCU schools are contemplating similar measures. St. Cloud State University President Earl Potter said his school is already laying off nine faculty members and eliminating 26 academic programs — one-tenth of the total offered — to deal with the current deficit. Potter said they expect to eliminate another 25 or so faculty positions in the next biennium.
“We have squeezed all the blood out of the stone that we think we can, and so I don’t see that we can negotiate the next biennium without faculty layoffs,” Potter said.
He added that the school has already cut all of the programs that were not considered financially successful, and that “the next cuts we have to make will be things that are successful.”
One option that’s always available to shore up higher education budgets is tuition increases, but neither MnSCU nor the university intends to solve a majority of the problem that way. While both King and Pfutzenreuter said that tuition would be a part of the overall solution, King emphasized the commitment to keep higher education affordable and accessible to the public.
“Our approach to tuition will be reasonable,” she said, adding that tuition increases at MnSCU would likely be kept below double-digit percentages.
Hurtling toward a cliff
As deep as the cuts have been over the last two years, they might have been deeper if not for the federal stimulus.
The American Recovery and Reinvestment Act of 2009 provided Minnesota with “stabilization funds” that lawmakers used to shore up higher education funding. That money came with a requirement that Minnesota can’t reduce its higher education funding to below its 2006 levels.
Next year, that money will dry up, and lawmakers will be free to cut funding as much as they need to. To make matters worse, college enrollment statewide is at an all-time high, as workers laid off during the recession have returned to school seeking retraining or looking for a new career field.
“We are really up against it from a capacity standpoint,” King said. “We are reaching a point at some of our institutions where we are at de facto enrollment caps already.”
King calls it “a time of great ambiguity.” Without new federal money or an increase from the state, the hard times will only continue at state colleges and universities.
There’s always a chance the state’s budget situation will improve dramatically in the coming months, but Pfutzenreuter said he doesn’t expect it to happen. In the meantime, the university is preparing to face the funding cliff as best they can, looking for efficiencies wherever they can find them — no matter how small.
“I have to now take my own garbage to a main receptacle,” Pfutzenreuter said. “They don’t come around and take it for me anymore.”
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