President Bruininks Answers Your Budget
Questions
By Robert H. Bruininks, President of the University of Minnesota
Published in the University Parent Newsletter,
Spring 2005
I have been supporting at least one
child at the U since 1998. During that time, most years have seen
double-digit increases in tuition.
This year’s proposal of a more than 5 percent increase is
small in comparison, but these increases really add up. To pay
for
tuition costs, I have had to cut my own expenditures. Can you tell
me what the University is doing to cut its spending?
First of all, thank you for your family’s continued confidence
in the University of Minnesota. I share your concern over tuition
hikes, so, in addition to advocating for more resources from the
State of Minnesota and making scholarships our number one fund-raising
focus, I have made improved service and productivity a priority
for the University. It is my hope that one day the University
will
be known as much for its management as it is for its high quality
education and research.
Over the past two years, as the result of the largest cut in state
funds made to any public campus in the country, we reduced our workforce
by more than 500 employees, employee pay was frozen for a year,
and faculty and staff took on a greater share of paying for health
care benefits. We have worked hard to protect our academic core
and student services from the nearly
$200 million cut and are committed to reducing and reallocating
University expenses by $45 million over the next two years as part
of our biennial partnership proposal with the state.
Allow me to touch on a couple of examples of how we’re doing
this work. One that I am particularly proud of is the reengineering
project of the Facilities Management Department, which oversees
the physical assets of the University. The project is saving the
University more than $5 million based on the recommendations of
the department’s own employees. In addition to achieving cost
savings, we were able to create better accountability for the management
of individual buildings. Another example: A careful look at the
University’s accounting system uncovered an opportunity to
take some resources that we had previously held and invest them
in more liquid, cash flow accounts. That has resulted in an additional
$6 million annually for the University’s operations and has
changed our investment risk profile very little.
To help foster a culture of service and continuous improvement
at the University, we have opened a small office of efficiency
experts.
It’s called, appropriately enough, the Office of Service
and Continuous Improvement. On their Web site, www.umn.edu/osci,
you can find other examples of University innovations aimed
at improving service while reducing costs.
As a parent and Minnesota taxpayer, I would
feel better about rising tuition rates and your requests for increases
in state spending
if the U wasn’t also talking about building a new football
stadium. How can that be justified during these tough financial
times?
I sympathize with those who question our stadium effort, especially
in these challenging times for state resources. However, we are
working with a timeline not of our making. Our partners in the
Metrodome—the
Twins and the Vikings—have indicated strongly that they expect
to abandon the facility within the next six years. In part because
of the current situation with our professional sports partners,
a study recently concluded that the best option for the University
would be an on-campus, Gophers-only facility, one that would take
four to five years to build.
The alternative is not pretty: assuming the Metrodome’s owners
do not tear down the building, the Gophers could easily be left
as the Dome’s sole tenant in 2011, with an expected annual
rent of $8 million plus additional costs for renovation. (Today
the University does not pay any net rent for the Dome, but also
does not realize significant revenue from the facility.)
The University’s current plan for a new $235 million campus
stadium has the University raising 60 percent—in large part
through private funds—and the state kicking in the remaining
40 percent of the cost. Legislation introduced this session
would
have the state fund its 40 percent share by providing $7 million
annually to pay the debt service on bonds issued by the University.
The annual debt
service cost to the state would end up being the same or less than
the projected annual rent in the Metrodome.
This legislation, if passed, does not interfere with the University’s
current capital or biennial budget requests. Funds would be required
from the state no earlier than July 1, 2007, and not before the
University has secured its 60 percent share of the cost.
No other Big Ten institution plays off campus in a facility built
for professional sports. I think our students, parents, alumni,
and friends deserve a modest but high quality facility, one that
links Saturdays in autumn at the old Memorial Stadium with campus
life in the twenty-first century. Given the potential benefits
of having a home for Gopher football on campus and of having a
facility
that could accommodate all-University events such as graduation,
and given the risks of having our athletics program’s future
determined by outside organizations, I think we must move forward
with a stadium proposal at this time. (More information is available
at www.umn.edu/stadium.)
What is the University doing to inform
the legislators and taxpayers of Minnesota about how state funding
for the University affects
our state, and what can I do to help?
We spend a great deal
of time in the University’s administration
trying to communicate with the public and their elected officials
about the value of the University to the state of Minnesota. We
compete for the public’s attention in a crowded media marketplace,
and we rely heavily on volunteers and advocates to tell our story
to elected officials.
Although we are far from finished with the legislative session,
I believe we are having a real effect on policymakers. Governor
Pawlenty recently recommended a major portion of the University’s
biennial budget request to the state legislature for passage. That
is good news, and our job now is to increase that recommendation
to the full amount requested and to fend off any reductions to
the governor’s numbers. For more information on the University’s
legislative request, please go to supporttheu.umn.edu.
In his State of the State address, Governor Pawlenty said he
wants to look into giving more higher education funding directly
to students, rather than to universities and colleges, and he cited
the state of Colorado’s system as an example. He said it
would give college students and their families more choice and
empower them as customers. That sounds like a good idea to me,
but when you spoke to the state legislature, you opposed it. Why?
I have always supported the Minnesota State grant program, one
of the most generous financial aid programs in the country, as
an important way to help ensure access to higher education in Minnesota
and to help increase accountability among competing institutions.
I lend that support even though that aid benefits students in private
institutions more than those at the U of M or MnSCU.
That said, the idea that we can fund a vibrant higher education
system, one that includes a major research institution like the
University of Minnesota, through grants to undergraduates alone
strikes me as overly simplistic. We need to fund higher education
institutions like the University to fulfill important public purposes
that are not conducted by other systems.
If the state values the education of health care professionals
such as physicians and dentists, if it values the more than $500
million in sponsored research funding the University brings in
each year, if it values the transfer of technology from University
labs to practical applications, and if it values the unique and
unparalleled choices the University offers to students at all levels,
the state needs to fund higher education institutions as well as
student aid.
As I understand them, the changes taking place in Colorado were
made as a last ditch effort to save public higher education in
Colorado from the ravages of a ballot initiative that the voters
there passed. That is not an encouraging steppingstone to higher
education reform. You can read a report by my colleague Elizabeth
Hoffman that projects disastrous consequences of recent state policies
for the University of Colorado at www.cu.edu/challenges.pdf.
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