House bill would cut biomedical building funding

A $3.1 billion higher education funding bill passed a House higher education committee Wednesday, bringing the debate over the state’s higher education budget to a new stage as both the Senate and House proposals have been approved by their higher education committees.
Under the House plan, the University of Minnesota would receive more than $1.4 billion in a combination of state funding and federal stimulus money during the next two years. The bill would also include a provision to pull more than $48 million in funding for a variety of University biomedical science building projects.
Senior Vice President for Health Sciences Frank Cerra testified before the committee Wednesday to say that, should the state pull funding for the projects, it would damage the University’s fundraising capabilities for them.
The funding cuts proposed in the bill would cancel funding previously passed by the Legislature for three University biomedical projects, Cerra said.
One project, an expansion to the Center for Magnetic Resonance Research, is set to begin construction this summer.
“The ‘shovel-ready’ jargon that is being used, this is very close to being shovel-ready, it’s clearly an economic stimulus, and it gives Minnesota a position in biosciences instead of us rapidly becoming a fly-over or a fly-by state,” Cerra said.
Rep. Tom Rukavina, DFL- Virginia, who wrote the bill and chairs the higher education committee, said he would continue discussions with the University over the issue, but cutting funding for the projects now would save $1.3 million in 2011, and more than $14 million during the 2012-13 biennium.
But Rukavina met opposition, even from members of his own party, on his plan.
“Although I understand how difficult it is for us to pull this budget together, this has been a very tough year and it’s going to continue to be a very tough year,” Rep. Tim Mahoney, DFL-St. Paul, said. “I hope that … we can find some way to get these buildings back on track.”
University officials, including Chief Financial Officer Richard Pfutzenrueter, have said the House bill is a good bill for the University, a sentiment Rukavina has said he has heard from the Minnesota State Colleges and Universities system and others.
Both Gov. Tim Pawlenty and the House would give $1.4 billion in state and stimulus funds to the University in 2010-11. In the 2012-13 biennium, however, the University would get $1.343 billion from the House — $89 million more than under Pawlenty’s plan.
In the Senate, the University would receive an 8 percent cut in state funding each of the next two biennia — it would receive $1.4 billion in funding in 2010-11, and $1.3 billion in 2012-13, according to a Senate analysis.
Both the House and Pawlenty use more than $231 million in stimulus money to support the University in 2010-11 . The University will use some of that to pay down a proposed 7.5 percent tuition increase, keeping the increase to about $300 in tuition for students, Pfutzenrueter said Tuesday night.
“Without that stimulus money, this bill would be a terrible bill,” Rukavina said. “Everybody would be sitting around and squirming right now trying to address the tuition issue or the layoffs that would have occurred if we tried to cap the tuition.”
But Rukavina did note that the bill’s success is also contingent on House DFLer’s plans to raise $1.5 billion in new taxes.
Gov. Tim Pawlenty has repeatedly said he opposes tax increases this session.
“The DFL proposal makes future funding promises that appear to be unrealistic,” Pawlenty spokesman Brian McClung said in an e-mail.
Rep. Bud Nornes R-Fergus Falls, the Republican lead on higher education in the House committee, said the success of the bill in the 2012-13 biennium would rely on what the Legislature does this session.
“We’re all optimistic that things will improve,” Nornes said. “A lot of that is going to depend on what we do this session.”

-Devin Henry is a senior staff reporter