House calls for more U oversight

Under the House’s proposal, the U would have to report how it spends state money.
April 16, 2013

The state House granted the University of Minnesota increased funding to freeze tuition Monday, but it came with a few strings attached for the future: to show legislators where the money’s going.

The House Higher Education Committee approved legislation Monday that would require state-funded colleges and universities to be more transparent with how they spend taxpayer dollars — a concern that follows alleged administrative bloat.

Rep. Gene Pelowski, DFL-Winona, who chairs the committee and sponsored Monday’s proposals, said he wants to hold schools accountable for their use of state funds and make sure that the extra dollars aren’t being used to pay for administrative bonuses.

“… The regents leave much to be desired in their ability to explain how these tuition increases were raised and what they were raised to cover,” Pelowski said at the hearing Monday.

He said the amendments to the bill — which increases state funding to freeze undergraduate tuition for Minnesota students and invests in research — would encourage more oversight from the Legislature in light of high tuition costs and student debt.

“Something’s got to change,” Pelowski said.

University Regent Linda Cohen said the proposal is something that can be discussed further.

“I think there is some work to do as we look at all that and with the budget,” she said.

Because of its autonomy, the University doesn’t have to follow guidelines set by the state, but it may do so if it wants full funding in future bienniums.

Under the new proposal — which passed the committee unanimously — the regents would be asked to submit a summary report for legislators every other March that outlines the investments the institution made with the state funds allocated to it in the previous biennium.

Pelowski said the Legislature needs to know more about why tuition rates increase, what the money is being used to cover and exactly where state money is being used.

The proposal, which was added as an amendment to the committee’s final, all-encompassing omnibus bill also states that direct appropriations to the University from the state cannot be used to pay for bonuses or incentives for deans, provosts, directors and other administrators employed at the institution.

“Is [tuition] being raised for contractual and operational expenses or is it being raised for something else?” Pelowski asked the committee of bonuses.

He said it’s not fair that administrative employees receive pay bonuses “on top of very generous salaries” when the University is facing tuition increases, cuts and loads of student debt.

“I’m hopeful that in the next year and a half as this reporting language goes into effect, we will be able to establish some oversight relationship that will be productive,” Pelowski said.

Rep. Ryan Winkler, DFL-Golden Valley, said the revamped House bill is a good first step to improving conversations between the Legislature and the state’s higher education institutions.

In mid-March, Winkler suggested legislators establish a “middle ground” when it comes to internal involvement and that they should be able to, in part, “set conditions” for tuition and spending at the University.

“I think we largely agree that we need to take a different direction,” he said Monday.

Although the University doesn’t legally have to follow the potential new statute like other state schools, the Legislature’s more than $1 billion biennial funding could pressure it to do so.

David Schultz, a Hamline University law professor, said because the University has constitutional autonomy from the state, the Legislature likely cannot mandate what the University does, but it “can use its money to place limitations or to stipulate things that they’d like the University of Minnesota to do.”

Taylor Williams, president of the Minnesota Student Association, said the University needs to be more transparent with its state money.

“I think there’s a general feeling from students, members of the community and people in Minnesota in general that administrative spending is too high and perhaps out of control,” he said. “The only way we can legitimately assess that is to have some idea where the money is going.”

Because it’s publically funded, Williams said the University should strive for transparency.

“It’s a process that a public institution should have to go through.”

The House and Senate higher education committees both passed their final funding appropriations for the University on Monday.

The House recommended about $100 million less than the Senate and governor’s proposals.

The two committees will need to iron out the differences in funding, but Pelowski said he sees the two chambers agreeing on several points.

Both proposals give money to hold tuition down for University resident undergraduate students and increase state investments in MnDRIVE, a University research program, although the House provided less for research.

“The good news to me is everybody is thinking we care about student tuition and we care about student debt and we care about being efficient,” Cohen said.

University Chief Financial Officer Richard Pfutzenreuter said he’s appreciative of the legislators’ “tough questions” during this “long, difficult session,” and he looks forward to the upcoming discussions as the legislation gets finalized.

The House bill will be discussed on the chamber’s floor in the coming weeks. Also, the Senate higher education bill passed through the Committee on Finance on Monday.

“I’m certain that the legislators and I have the same goals in holding the University accountable and having the University run efficiently and be as effective as it can be at what it does,” University President Eric Kaler recently told the Minnesota Daily.

 

—Brian Arola contributed
to this report.

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