But the issue of compensation for the next University of Minnesota president is only the tip of the iceberg. It should be examined in the broader context of the overall costs of administration.
In fiscal year 2017 the university administration spent almost $289 million on “leadership and oversight” and more than $713 million on “mission support,” according to Board of Regents meeting records
These costs of administration exceeded $1 billion and consumed 27 percent of the $3.7 billion university budget. This calculation of the costs of administration is conservative as it excludes expenses in the mission support category for student personnel, for campus operations, for the costs of facilities (repairs, utilities, etc.) and for debt service.
The administration asserts that the costs of administration are less than 9 percent of the university budget. This calculation of spending on administration is limited to expenses in the “leadership and oversight” category. But in calculating any reduction in costs of administration to meet the pledge to the Legislature to reduce the costs of administration by $90 million over six years, the administration counts reductions in expenses in the “mission support” category, again according to regents meeting records. And on the U website, the administration defines administrative costs as the combined costs for leadership and oversight and mission support.
Another recent front-page report describes the rating of the state infrastructure by the American Society of Civil Engineers. (“State’s basic services rated mediocre — and worse,” Oct. 10). We can add the U academic facilities to the dismal infrastructure report card. Almost one-third of the buildings on the Twin Cities campus (7.5 million square feet) are rated in poor or critical condition by the university administration. The costs of maintenance and restoration of existing facilities on all campuses are projected to exceed a staggering $4 billion over the next 10 years.
In the 2018 legislative session the administration requested $200 million in HEAPR bonds for the restoration of existing facilities. The Legislature approved $45 million. It is clear that the university will have to allocate more of its own funds to fix the crumbling academic infrastructure. What will be the source of the funds? Students and their parents would come to tar and feather the president and the regents if the administration proposed a substantial increase in tuition with national student loan debt already exceeding $1.3 trillion.
The pledge of the president to reduce the costs of administration by $90 million over six years has simply reduced (slightly) the rate of increase. At the June 2017 meeting of the Finance Committee of the Board of Regents the administration asserted that “total administrative expenditures over the last four years have grown at a slower pace on an average annual basis (2.8 percent) than total expenditures (3.2 percent).”
It will be necessary to make real reductions in the costs of administration and not merely slow the rate of increase.
In his inaugural address more than 20 years ago, former U President Mark Yudof warned of excessive administration: “To the best of my knowledge, no great scientific discoveries, no insightful social science tracts, and no novels have been produced in Morrill Hall [the administration building]. 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.”
We need a mechanism to reset the priorities of the university administration. The Legislature should require the university to send rebates of general appropriations to the state treasury to the extent that the costs of administration exceed 15 percent of the total costs of operation.
This penalty for excessive administrative overhead would be similar to that imposed on health insurers by the Affordable Care Act.
Michael W. McNabb, of Burnsville, is an attorney and a lifetime member of the University of Minnesota Alumni Association.