Minnesota lawmakers are sparring over college affordability proposals as they race to pass a two-year state budget before the legislative session adjourns Monday.

Senate Republicans are pushing a 5% tuition cut in exchange for funding the Minnesota State college system and want the University of Minnesota to slash its tuition by 3%. House Democrats instead ask that Minnesota State keep its tuition flat and make no tuition request of the U.

GOP lawmakers are not proposing extra funding to support the requested tuition cuts, arguing the U and Minnesota State should use federal COVID-19 relief money they received to pay for it.

"We get complaints about how tuition is constantly going up," said state Sen. David Tomassoni, an Independent from Chisholm who chairs the higher education committee in the Republican-controlled Senate.

"It seems logical to me that, we have some extra money coming from the feds, why don't we just reduce tuition and use money from the federal government as opposed to money from the state government?"

College administrators and Democrats say the federal money likely cannot be used that way.

And administrators counter that a tuition reduction without providing state funding to support it would amount to a budget cut.

"Federal guidance makes it clear federal stimulus dollars cannot be used to cut tuition," House higher education committee chairwoman Rep. Connie Bernardy, DFL-New Brighton, said in a statement. "In the House, we are taking bold action to adequately fund higher education."

Minnesota State is facing a nearly $50 million budget hole this fiscal year due to pandemic-related expenses and revenue losses, while the U is grappling with a roughly $170 million shortfall.

Minnesota State's 37 colleges and universities collectively received more than $300 million from the Biden administration's American Rescue Plan. The U received almost $100 million.

But at least half the funding must be spent on direct financial aid for students, with the other half available for institutional costs.

Bill Maki, Minnesota State's vice chancellor for finance and facilities, and Myron Frans, the U's senior vice president for finance and operations, both said they reviewed spending guidance from the U.S. Department of Education and interpreted that the federal relief money cannot be used to pay for tuition reductions. The institutional portion of the funding can only be used to cover pandemic-related expenses or revenue losses, they said.

"This federal funding is not a substitute for ongoing funding from the state or tuition revenue," Maki said. "An unfunded tuition freeze or tuition cut will put the state's public colleges and universities under additional, significant, and ongoing financial pressure."

Frans noted the federal funding the U received does not cover its budget shortfall. The university would lose about $13 million in revenue if it cut tuition by 3%, he added.

Mike Dean, executive director of the statewide community college student association LeadMN, said he appreciates lawmakers' oversight of the Minnesota State system.

The system should not push for "unnecessary tuition increases" during a pandemic and a year in which it received hundreds of millions of dollars in federal funding, he said.

But Dean also urged lawmakers to adequately fund Minnesota State's budget request, noting that disinvestment in higher education over the past two decades has contributed to rising tuition.

"We really think that we need that critical investment this year," Dean said.

House and Senate lawmakers have less than a week left to resolve their differences. Other higher education proposals being debated include expanding the number of Minnesota State colleges that offer degrees that use free textbooks, and creating a new program in which qualifying high school seniors would be automatically accepted into some state colleges and universities.

Ryan Faircloth • 612-673-4234