Flat state funding is nothing new to the University of Minnesota. A proposal from legislative Republicans unveiled Tuesday would continue the trend over the next two years.
The bill, meant to tackle the state’s $6.2 billion budget deficit, would cut $200 million from the projected two-year budget of the state’s higher education systems, including $89.2 million from the University. The cuts would effectively extend former Gov. Tim Pawlenty’s one-time cuts, or unallotments, into the 2012-13 budget cycle.
The move doesn’t cut real dollars but instead stops automatic spending increases that are traditionally built into the budget.
The bill, which would cut the budget deficit by $1 billion, was described as "phase one" in a series of Republican proposals aimed at curbing the current shortfall. Rep. Mary Liz Holberg, R-Lakeville, House Ways and Means Committee chairwoman, said the Republican leadership hopes to pass the bill by Feb. 10.
"This is the first step in the budget process to bring that deficit down," said Sen. Claire Robling, R-Jordan, the Senate Finance Committee chairwoman. The bill was introduced Tuesday and will be vetted by the taxes and finance committees.
But Gov. Mark Dayton, D-Minn., forgoing his usual calls for cooperation, blasted the proposal in a statement.
"I will not agree to piecemeal cuts and partial solutions eliminating the $6.2 billion deficit in the next biennium," he said. "I will propose a reasonable, balanced and complete budget solution on February 15th, and I ask the Legislature to do the same thereafter, with citizen participation through hearings and very careful consideration of the effects of their decisions on people’s lives."
State aid to the University for the next biennium is now projected at $1.19 billion, although the University requested $1.28 billion. Chief Financial Officer Richard Pfutzenreuter said state aid has been rolled back to levels from roughly a decade ago.
Rep. Bud Nornes, R-Fergus Falls, House Higher Education Committee chairman, said the University probably expected the cuts, a thought Pfutzenreuter echoed.
The University wasn’t "foolish enough" to allocate the money included in the projected 2012-13 budget, Pfutzenreuter said. If the state funding had come, it would have been spent on increasing financial aid for students, restoring faculty positions and "core costs" like maintenance.
Last session, the Legislature built in an approximately $100 million increase into its projected allocation to the University in 2012-13, Pfutzenreuter said, but this bill would keep funding levels roughly unchanged.
Because the bill leaves a $5.15 billion deficit in its wake, further reductions are likely.
"We’d like to think this is the end of the cutting with this bill," Pfutzenreuter said, "but I doubt it."
He said the next round of cuts to the University will be devastating and counseled the Legislature to take a more balanced approach to higher education funding.
Pfutzenreuter pointed to moves like pay freezes taken by the University to keep its budget under control.
Under ideal economic conditions, higher education would see an increase in state aid, Nornes said. The issue of higher education funding is likely to come up during Thursday’s House Higher Education Committee meeting.
But with the current shortfall and a Republican legislative majority standing strong against tax increases, there’s little hope for any uptick in aid.
Rep. Tom Rukavina, DFL-Virginia, the ranking DFLer on the House Higher Education Committee, said the state funding freeze would only mean higher tuition for students. To him, "a tuition increase is a tax increase," he said.
Rukavina said he supports income tax hikes as part of an effort to offset tuition costs. Dayton campaigned on raising about $1.9 billion in new state revenue by taxing Minnesota’s highest earners.
Although Pfutzenreuter said the University is typically successful lobbying the Legislature, it hasn’t been successful in grabbing a piece of the pie. It’s important that University lobbyists remain calm and illuminate the school’s benefits to the state, he said.
"We’re mad, but it doesn’t do a lot of good to go and scream at people about it," he said.
State general fund aid for higher education has decreased by more than one-half since 1967. Over the past decade, tuition and fees at the University have more than doubled, according to Minnesota Office of Higher Education data.
Also included in the Republicans’ budget bill is a continuation of $95.8 million in cuts to the Minnesota Colleges and Universities system for the 2012-13 biennium, and nearly $600 million in cuts to local government aid.
For this fiscal year, Republican lawmakers asked the state Management and Budget office to identify $200 million in cuts to state agencies. Included in the bill is a provision exempting higher education, K-12 and special education from the cuts.
The cuts are part of an effort to reduce the size of the deficit represented in the state’s February economic forecast.
Bigger bonding bill for schools?
One bright spot for higher education this session could come in the form of a bonding bill. Rep. Alice Hausman, DFL-St. Paul, introduced legislation last week that includes $128 million for University capital improvement projects and maintenance. She is also a member of a bipartisan effort aimed at specifically allocating maintenance dollars — formally known as Higher Education Asset Preservation and Replacement funding — to higher education institutions.
Jumping party lines, Nornes said he supports this sort of funding despite typical Republican apprehension to bonding. Last session, the University received $56 million in HEAPR funds.
"That’s a very important part of what we do, is to maintain the facilities as we would our own house," he said.
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