I understand how relationships work and, like all relationships, I am sure that both of you have felt taken for granted or not fully appreciated. At times, one of you may have felt as though you were giving more than the other. That happens.
But sometimes the payback can occur down the road in ways that you may not imagine. You both have meant so much that this is painful to watch.
Please, state of Minnesota, dedicate the needed resources to your beloved University of Minnesota.
Focus on all that you have created, all that you have built together. This is just shortsighted and silly. While your investment in each other has immediate benefits, your future significance is even greater.
This is a personal finance issue for those of us who live in this state. According to impact.umn.edu, every dollar invested in the University of Minnesota generates more than $13 in the statewide economy. Few investments offer that kind of return.
Heck, because of both state support and tuition management during the good old days, my wife and I were each able to put ourselves through the U. We met as orientation leaders there and I serve on the U's Foundation board. My private company alone has 35 employees from all over the country, paying Minnesota taxes and owning Minnesota property.
And according to alumni surveys, U of M alumni have founded nearly 10,000 companies in Minnesota employing 500,000 people. If you want job creation, don't choke it off at its source.
This is a personal finance issue because we all get benefits from both the state and the university, only some of which we are directly paying for through taxes and tuition. Investments in education prepare our next generation of leadership; become the catalyst for inventions, and create lifetime connections to our state and its future.
This is a personal finance issue because our hard-earned money does pay for some of this. Our tax dollars are being spent by the state and not always in the exact way we would spend them. The more of our dollars that the state spends, the less we have for ourselves to spend today or save for tomorrow.
This is an even bigger reason for us to encourage spending in areas that decrease future costs or create returns. We may not be around to reap those benefits, but we need to balance spending for needs today with investing for tomorrow.
There is no doubt that cuts need to be made; the size of the deficit cannot be covered by tax increases alone. Every dollar being spent has a constituency that relies upon it. Who gives up what and why? The U of M has clearly indicated that it expects cuts, but does not want them to be disproportionate.
This is a personal finance issue because certain taxes will inevitably go up. For example, we encourage our Minnesota clients to invest for their children's or grandchildren's college futures using the state-sponsored 529 plan managed by TIAA-CREF.
This plan has relatively low costs and good, but not-that-varied investment options. We feel that there may be a future tax risk of investing in out-of-state 529 plans when the money is spent. The Pension Protection Act of 2006 has "permanently" created tax-free federal treatment on qualified withdrawals; I am more circumspect of Minnesota's treatment of out-of-state plans.
This is a personal finance issue because we are aligned with the success of the state and the success of its university. And both, I fear, are at tipping points. The state can only raise taxes to a certain point, and the university has the same limitations with tuition increases. If the state raises taxes and cuts services, leaving Minnesota becomes a more-viable option. If tuition has to go up as programs or faculty cuts continue, staying in-state for schooling is less beneficial.
In the short run, draconian cuts may appear prudent. But a long-term, mutually beneficial relationship is best for everyone. Spend your life wisely.
Ross Levin is founding principal and president of Accredited Investors Inc., Edina. His Gains & Losses column runs on the last Sunday of the month. His e-mail is email@example.com.