U says it will freeze tuition if state OKs more funding

The University of Minnesota is getting creative in asking for new money.

President Eric Kaler's proposed $1.18 billion biennial request to the Legislature trades increased funding for an undergraduate tuition freeze. It collects a pot of money only if the university meets three of five goals, including improved graduation rates. It hatches a new fund, for research only.

"This is a different package from previous years, focused on accountability," said Jason Rohloff, the U's lobbyist.

Kaler will present the two-year funding request -- his first since he took charge in July 2011-- to the Board of Regents on Friday. The regents will vote on it in October.

In total, the U is asking for $91.6 million more, an 8.4 percent bump over the current biennium. A portion of that, $14.2 million extra over each of the two years, would be linked to a tuition freeze for in-state undergraduates.

Chairman of the House higher education committee, Rep. Bud Nornes, R-Fergus Falls, called the request "bold."

He said that tying funding to a tuition freeze is "a very good starting point" in controlling tuition increases that have strained students and compounded their debt. While Nornes said he's optimistic, he noted that the state is likely to face a substantial budget shortfall.

"We think it's not excessive," said Richard Pfutzenreuter, the U's chief financial officer. "We think it's responsible. It holds us accountable."

Putting forth goals

The request, outlined in a media briefing Thursday, includes $11.5 million in the second year of the biennium for an "accountability fund," released if the U does things like award more degrees, boost financial aid and maintain research and development spending.

Those goals mostly mirror ones the Legislature tied to 1 percent of its funding last year. Four of 12 regents voted against the measures, concerned that they'd be ceding autonomy given to the university in the state Constitution.

"This time, the university is proposing [the goals] ourselves," Pfutzenreuter said.

By suggesting these measures, the University of Minnesota is "showing some proactivity," he said. "It makes sense for an institution to get out in front on this issue ... rather than having the formula thrust upon them."

The university is also pledging to cut administrative spending by $28 million over two years. Regents will review how such costs will be defined at their October meeting.

"We acknowledge that when you go to the Legislature and ask for increased funding, you obviously need to do some lifting on your own," Pfutzenreuter said.

The U's request also includes $18 million for a new recurring fund called MNDrive and its four research areas -- robotics and advanced manufacturing, global food supply, industry and environment, and treatments for brain conditions, such as Alzheimer's. The U is proposing legislation to make the fund permanent, but its focus would change over time.

Nornes said he expects that legislators will like the separate fund, "rather than, 'Give us more money, and we don't know what it's going to,'" he said. "That might give comfort to those who are on the committee."

Should MnSCU do likewise?

The trustees in charge of the state's other public higher education system, the Minnesota State Colleges and Universities, will discuss its request in October, a spokeswoman said.

Nornes suggested that MnSCU consider something similar on tuition, "so that all the college students could have a little breather." After higher-education cuts, Nornes said that he believes it is "appropriate that the state, rather than students and families, step up to the plate."

At the U, a tuition freeze would apply to only undergraduates from Minnesota. The request contains no promises for graduate, professional or out-of-state students.

It would apply to tuition only, not fees or other charges. In-state tuition now totals $12,060. With fees, books, room and board, and other expenses, the cost reaches $24,718. A two-year freeze would save an undergrad $2,565 over four years, when compared with two years of 3 percent tuition increases, Pfutzenreuter said.

"By promising students that tuition will not increase if the state funds his proposal," Matula said by e-mail, "President Kaler has given students additional incentive to participate strongly in events like 'Support the U Day' and lobby on the university's behalf."

Separate from the funding request, U officials also plan to draft legislation to tackle student debt and lift donations.

The ideas include tax credits for those who donate to public and nonprofit colleges, for middle-income families' tuition bills, and for graduates who stay in Minnesota, to be put toward student loans. The U has not yet estimated the cost of such credits.

This is new territory for the university, Pfutzenreuter said. "I haven't seen any state higher education leader wade into the area of taxes."