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President Bob Bruininks.

President Bob Bruininks announces his 2004-05 budget recommendations at the May 14 Board of Regents meeting.

Regents to act on 2004-05 budget recommendations

By Rick Moore

Originally published on May 14, 2004; Updated on June 9, 2004

The University's Board of Regents will act on President Bob Bruininks's 2004-05 budget and tuition recommendations at its monthly meeting this Friday, June 11. Bruininks's proposal calls for an operating budget of approximately $2.5 billion for fiscal year 2005 (July 1, 2004, to June 30, 2005). This figure includes budget reductions and reallocations needed to meet the balance of the $185 million state budget reduction for the current biennium. The president's recommendation also includes tuition and fee increases for the coming year. The increases average 14 percent--or about $915--for undergraduates on the Twin Cities campus and 13 percent for students on the Crookston, Duluth, and Morris campuses. Budget demands The board's action will be the culmination of more than a year of budget planning by the University administration since the Minnesota State Legislature and Governor Tim Pawlenty cut the University's biennial budget by $185 million in May of 2003. At that point, the University began planning a vastly scaled-back budget, with strategies focused on reducing administrative and operating costs, continuing to invest in academic initiatives and student services, and sharing the sacrifice broadly among faculty, staff, and students. The ramifications of the budget demands have been felt throughout the University. For the current fiscal year the U implemented an across-the-board wage freeze, restructured its health care plan (placing more of a burden on employees), and reduced its workforce by more than 500 employees through layoffs, attrition, and the elimination of unfilled positions. The $70.4 million financial challenge for fiscal year 2005 includes funding for a 2.5 percent salary increase for faculty and staff plus money for investing in academic directions ($11.2 million) and student goals ($6.8 million). Tuition hike The proposed tuition increase would mark the fourth straight year that the U has had double-digit tuition increases. Since the 2000-01 academic year, tuition for undergraduates on the Twin Cities campus has increased by more than 50 percent, due in large part to declining state support during that time. As Bruininks notes, general-fund appropriations for the University as a percentage of total state spending have fallen from nearly 7 percent in 1989 to just under 4 percent in 2005. "Raising tuition is never a first option, and we know the implications for students and their families," says Bruininks. "The fact is that two-thirds of the tuition increase we've put forward is directly attributable to state funding cuts. We've taken a balanced approach to meeting a difficult financial challenge, and this tuition increase is necessary to ensure that the U continues to provide a high-quality education." For the coming year, tuition and University fees for an undergraduate on the Twin Cities campus will be $7,477. (For the current academic year, the University ranked third in the Big Ten for highest undergraduate tuition behind Penn State and Michigan.) To help offset that increase, support for the lowest-income students--through Pell grants, state assistance, and University funds--will increase, on average, by about $800. "These increases are cushioned very substantially for students from low-income families," Bruininks says. The University is also keeping the tuition increase the same for nonresident students as resident students, and has developed a new model for Medical School students which includes lower tuition for nonresident students and a guaranteed tuition rate for 11 terms beginning with the next round of new students. At the board's May 14 meeting, a number of regents, as well as Bruininks, voiced their increasing concern over the trend of decreasing state support for the University. Whereas state support used to account for more than a third of the state's revenue, that share is now less than 27 percent, and seemingly on a steep decline. "My concern is that this public institution is being transformed into a privately funded institution," says Regent Maureen Reed. "We will continue to do our part by reducing costs, increasing productivity, setting priorities, and making difficult decisions about the budget," says Bruininks. "This is about adequate investment to maintain Minnesota's premier research university--a key element of the state's economic success and its quality of life over the past half century."

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