One financial model put together by Minnesota State colleges and universities projected an annual budget deficit of $66 million in nine years unless the system fundamentally changes how it does business.
The biggest problem with this forecast isn't its dismal conclusion for Minnesota State (formerly called MnSCU). It's that it seems far too optimistic.
Can the board of trustees expect that employees of this sprawling education system will readily agree to no increases in wages or salaries year after year beyond a cost of living increase? Oh, and also expect them to pick up more of their benefits costs?
As for revenue growth, will the board really agree to raise tuition 3 percent every year on students already sore about the increasing cost of higher education?
The financial forecast, along with a far more pessimistic one also created for a task force working on financial sustainability, used real-world assumptions to show how big of a financial hole Minnesota State will be in, according to Laura King, the system's vice chancellor and chief financial officer.
The more pessimistic case she and her colleagues prepared also may not be especially realistic, but it sure is sobering. This one assumed wages and employee benefits costs would increase 3 percent per year while the state wouldn't provide any more tax dollars and the board wouldn't agree to raise tuition at all. This one also assumed the total enrollment will actually decline by 1 percent a year.
That seems excessively pessimistic, and for all involved it had better be, because this is the forecast that showed the annual budget deficit swelling to nearly a half-billion dollars in 2025.
"The object was really to try to bookend our future potential," King said, explaining that she and her colleagues did not use language like "best case" or "most likely case" to describe these forecasts.