The University of Minnesota is preparing for students to return to campus this fall, a situation that would shelter the land-grant system from huge financial fallout, according to administrators who presented a budget outline to the Board of Regents on Thursday.
That’s the current and most optimistic of the three scenarios President Joan Gabel presented to the Board of Regents on Thursday. The Covid-Adjusted Budget, which totals $4.2 billion, begins on July 1 with the 2021 fiscal year.
The new budget assumes a return to near normalcy after the COVID-19 pandemic sent students home for the spring semester to learn on their computers instead of in classrooms. The break cost the U $35 million in room and board refunds.
The regents aren’t expected to vote on the budget until their meeting in June, and no decisions been made about whether students will be on campus in the fall. Details about how things will look were sparse given the quick-changing currents of the outbreak.
Gabel’s COVID-19 budget presumes a tuition freeze for students, the elimination of merit pay raises for staff, minimal capital investment and lower residency in campus facilities. The plan is also contingent on the state maintaining the two-year funding level approved by the 2019 Legislature, a point of concern for some regents given the state’s new pandemic-driven budget deficit.
The full financial impact of the virus on the university could exceed $300 million if the pandemic continues into the fall, but for now it’s more manageable. In addition to the main Covid-Adjusted Budget, Gabel announced two backups in development if the return of students is pushed deeper into the fall.
Meanwhile the University of Wisconsin on Thursday warned its regional campuses to get ready to cut programs by January and brace for layoffs as the system grapples with the economic fallout of the pandemic.
The U’s regents seemed mostly comfortable with her plans and were not inclined to push for big decisions about students returning.
“I think we make a better decision the longer we wait, and if that means extending ourselves beyond our June date so be it,” Regent Richard Beeson said, noting that the board is committed to the tuition freeze. “We’ve got tough decisions to make but I think it’s very manageable.”
Regent Steve Sviggum said Gabel’s plan is “realistic” and the U would “make the best decision we can” while portraying “hope” not “fear and anxiety.”
Gabel said it won’t be easy, but “we have a plan and we will cope.”
The budgets will become increasingly painful and likely include furloughs and pay cuts, Gabel said.
For now, the budget includes a hiring freeze systemwide, a freeze on merit pay increases and bonuses for all employees — except those working under collectively bargained contracts, and a 10% cut for Gabel and her cabinet.
The U relies heavily on tuition for operating revenue, so filling up the incoming class and bringing students back is important. Signs are strong because many of the schools are already full or close to it.
Some wanted to push harder. Regent Darrin Rosha suggested slightly lowering the ACT and grade-point average requirements for the incoming class. “I really do believe we need to maximize our enrollment,” he said.
Beeson suggested a signing bonus for the western Minnesota campuses — Crookston and Morris. Regent Michael Hsu suggested a tuition decrease to ensure that the incoming class is robust.
Senior Vice President for Finance Brian Burnett said no other Big Ten schools were offering tuition decreases.
In response, student representative to the board Rodrigo Tojo Garcia said the U could “be a leader” by dropping tuition.
Burnett was cool to the idea. “I feel comfortable with where we’re at,” he said.
Regent Mike Kenyanya asked what sort of mitigation efforts could allow a partial campus reopening.
Vice President for University Services Mike Berthelsen said likely many would wear masks and there would be more online meetings. Beyond that, he said, “We’re still working out how to do that.”
Hsu encouraged further contingency plans, preparing for a shutdown that continues into the spring, but others were optimistic.
Regent Kao Ly Ilean Her said, “We’re on the right track.”
Board Chairman Ken Powell said if the U is off 3 to 5% in revenue, it’s “manageable” and the blueprint for action is good. He said, “I’m willing to predict that a year from now when we’re sitting here, this will be in our rearview mirror.”
The Associated Press contributed to this report.