U OF M MONEY TRENDS
At the University of Minnesota between 1994 and 2010:
The operating budget grew by an annual average of 4.9 percent.
State funding grew by an annual average of 1.8 percent.
Scholarships and fellowships to needy students grew by an annual average of 17 percent.
By comparison, inflation as measured by the Consumer Price Index rose by an annual average of 3 percent.
Source: Richard Pfutzenreuter, vice president and chief financial officer, University of Minnesota
Editorial: U of M cuts signal more trouble ahead
- June 16, 2010 - 5:24 PM
It's easy to think of the University of Minnesota as another big, bureaucratic public institution that deserves a financial haircut during a recession. That may be how many Minnesotans received last week's news of another round of tuition increases, salary reductions and faculty and staff cuts to erase $152 million in red ink from the 2010-11 budget.
But Minnesotans who know the context of the latest cuts aren't as sanguine. They see that if the funding trends of the past decade continue, the university's capacity to generate knowledge and talent will erode, and with it, Minnesota's capacity to compete in the world economy. The latest cuts should be a summons to the state's best education and public-policy minds to devise a plan to stop the bleeding at the U.
These cuts are not a one-time response to an emergency. They are an acceleration of a longterm trend of diminished taxpayer support for higher education. As the numbers in the adjacent box show, state support for the U has not kept up with inflation for the past 16 years. The state's 2011 appropriation to the institution is the same size that state taxpayers provided in 2001.
The numbers also show that overall university spending has increased faster than inflation. That's true despite internal reallocation and reorganization and two salary freezes on President Robert Bruininks' watch.
Minnesotans should be aware that the picture is much the same nationwide. Major research universities are a wise investment for a state, but not a cheap one. They employ some of the most-skilled, sought-after people in the world to do labor-intensive work in spendy high-tech facilities.
That reality does not relieve research universities from the need to operate efficiently. To the contrary-- it makes efficiency imperative. But when a school loses 430 faculty and staff positions in one year and temporarily rolls back faculty salaries for the first time in modern history, as the University of Minnesota has just done, it sends a signal that distress, not efficiency, is at play.
Just as worrisome are the implications of the U's funding trends for students and their families. Already they've borne much of the burden caused by the state's slowdown in higher-education spending. Tuition at the University of Minnesota has doubled in a decade, and average student loan debt has soared.
To its credit, so has the university's spending on student financial aid. Pricing at the U now resembles that at private colleges. Ever-higher tuition is offset for poor and, increasingly, for middle-class students by the university's own financial aid. In addition, more than half of the 2009 federal stimulus money that flowed to the university was used last year and will be tapped in the coming one to discount in-state undergraduate tuition.
But this year, the state put additional stress on that effort, too. For the first time in the history of Minnesota's state-funded student aid program, it cut average student grants to accommodate higher-than-expected higher-education enrollment. As a result, in 2010-11 the university will have to provide $700 more per eligible student, on average, to keep awards even with last year's.
And in 2011-12 and beyond? The exhaustion of federal stimulus dollars is expected to push tuition considerably higher, while the continuing state budget deficit portends more shrinkage in state support. The sense is mounting on campus that those trends could drag the institution toward mediocrity -- and Minnesota along with it. The same sense needs to take hold at the Capitol as well.
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