University of Minnesota regents who control the U's budget want more details about how proposed pay and tuition increases compare to other schools.

Salaries would rise 2.5 percent and in-state undergraduate tuition 3.5 percent under the first budget proposed by President Eric Kaler.

A committee of the Board of Regents on Thursday reviewed details of that 2012-13 budget, which increases spending by 1.5 percent compared to this year. Committee chairman John Frobenius said he requested more data "to assure me that we aren't moving beyond what the market is doing" on pay and tuition.

"I'm still struggling a little bit getting comfortable with the 3.5 percent number, quite frankly," he said. That increase would bring the sticker price for Minnesota residents to $12,060, not counting fees, room and board. The 4 percent hike for out-of-state students would bring their tuition to $17,310.

On Friday, the full board will hear a presentation from Kaler on the $3.5 billion budget, as well as comments from the public. The board will vote on the plan in June.

Kaler told the committee Thursday that the proposed 2.5 percent pay increase seems "prudent" and "very much needed," given recent salary freezes and increasing health care costs. "We've been unable to reward very effective people for a long time."

He added that, nationally, a 3.5 percent tuition increase would fall "probably below the rate of increase for peer institutions." It's the lowest percentage increase at the U in more than a decade.

The 2.5 percent compensation increase would apply to all employee groups but be paid out differently. Faculty and professional employees would get raises based on performance, while union employees would negotiate terms, said Richard Pfutzenreuter, the U's chief financial officer.

The budget also bankrolls a range of new initiatives, including extra merit scholarships, faculty hires and a Center for Social Media.

Annual state funding of $545.3 million is, without adjusting for inflation, “rolled back to levels we haven’t seen since 1998,” Pfutzenreuter said, “and that’s a substantial challenge for the university.” But when legislators shrunk the size its expected cut to the university last year, the university decided not to spend a good chunk of money it got beyond what it had budgeted for.
“That prudent decision helped this budget enormously for this year,” Pfutzenreuter said.

If passed, the budget also would raise room and board costs for in-state undergrads on the Twin Cities campus by 3.5 percent, or $272. After adding the average fees, the total tab comes to $21,309. (That number does not include other expenses, such as books.)

Nonresidents and graduate students would see a 4 percent tuition increase, while first-year, in-state law students would pay 6 percent more.

Regents also asked about the 10.4 percent hike for Minnesota residents in Carlson School of Management's daytime M.B.A. program, which would bring tuition to $35,000.

"The resident rate being low, it appears as a regional school because of the rate that we're charging," said Julie Tonneson, associate vice president for budget and finance. "We have a lot of room to grow in the national market ... related to just our price comparison."

In total, tuition increases would add $24.6 million.

Jenna Ross • 612-673-7168