On the Cost of Administration at the University of Minnesota
- Blog Post by: Bill Gleason
- March 8, 2011 - 11:19 AM
Mr. Michael McNabb again provides here an interesting and very topical guest post. He has previously contributed the series: University Inc., and University Inc., Part Two. These have received national attention by those interested in the financial situation at the University of Minnesota. Matters in this area are in disrepair and need the attention of all Minnesota citizens.
At the Higher Education Committee hearing on February 22, 2011, President Bruininks told the state representatives that the annual salary of the new president is within market range for the position.
This is the same justification used to pay tens of millions of dollars in annual bonuses to Wall Street executives. As if the market were a God to whom homage must be paid. The "Masters of the Universe" who are the chief executive officers of those Wall Street firms have an unwavering confidence that the market always makes the correct determination in economic matters. This unwavering confidence combined with greed to bring our national economy to the brink of chaos.
So what compensation is necessary to attract good people to positions of leadership in public service today? Let us compare the annual salaries of senior administrators at the University to those of the leaders in state government.
|University of Minnesota||State of Minnesota|
|President UofM Foundation||$427,887|
|VP Health Sciences||$481,500||Health Commissioner
|Assoc VP health sciences||$407,774|
|General Counsel||$293,810||Attorney General||$118,238|
|Senior VP budget||$359,564||Commissioner Budget||$114,721|
|VP budget||$240,000||Commissioner revenue||$112,126|
|Senior VP academic admt||$282,560||Commissioner admt||$112,126|
|VP equity & diversity||$251,280||Commissioner human rts||$112,126|
|Dean Law School||$386,500|
|Dean Business School||$478,560|
|Dean Public Health||$349,548|
The State of Minnesota attracts numerous qualified persons for its positions of leadership. Is there any reason to believe that those positions are less demanding than comparable positions at the University of Minnesota or require less intelligence or less skill? Is there any reason to believe that the University could not also attract qualified persons who are dedicated to public service to its positions of leadership at salaries comparable to state pay?
The source of the annual salaries listed above is the Pioneer Press web site for Minnesota Public Salaries at http://extra.twincities.com/car/salaries/default.aspx.
There is more information of interest on the web site. If you enter the title of the position at the U of M, the site displays the annual salaries for all the persons with that title.
The 9 provosts have annual salaries in the range of $124,479 to $342,310.
The 18 chancellors have annual salaries in the range of $68,278 to $256,530. (Only five chancellors have an annual salary less than $98,000.)
The 40 vice presidents have annual salaries in the range of $117,580 to $481,500.
The 112 deans have annual salaries in the range of $84,000 to $606,000. (Only six deans have an annual salary less than $100,000.)
From fiscal year 2007 to fiscal year 2011 the state appropriations for the University declined from $709 million to $591 million. See p. 3 of the March 10, 2010 report Financing the Future at http://www1.umn.edu/regents/docket/2010/march/boardhandout1.pdf.
Yet the costs of administration did not decline. Just the opposite. The amount for "institutional support" (also known as costs of administration) exploded at the University from $196.6 million for fiscal year 2008 to $234.3 million for fiscal year 2010. The 2010 institutional support included $173 million for compensation and benefits and $61.4 million for supplies and services. See Section 3 of University Inc. Part II at http://ptable.blogspot.com/2011/02/draft-as-university-transforms-itself.html#links.
The University is a non-profit public institution whose leaders are supposed to be dedicated to public service and not to the enhancement of their own private wealth. This year the state legislators can impress this point upon senior administrators by making the grant of state appropriations subject to the condition that the budget of the University must include a reduction in the total compensation of administrators to the 2008 level at a minimum.
It is the public service of a non-profit organization that qualifies it for tax-exempt status. See section 501 of the Internal Revenue Code. The IRS is currently reviewing the compliance of non-profit colleges and universities with the statutory requirements. The compensation paid to senior administrators is part of this review. See Figure 65 on p. 58 of the Interim Report on Non-Profit Colleges and Universities Compliance Project at http://www.irs.gov/pub/irs-tege/cucp_interimrpt_052010.pdf
To the best of my recollection, no great scientific discoveries, no insightful social science tracts, and no novels have been produced in Morrill Hall. No classes are taught in Morrill Hall. No patients are made well in Morrill Hall. . . . Without authority invested where the real work of this University is done, the light of excellence will only grow dimmer.
University of Minnesota Alumni Association life member
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