Budget meeting raises more questions than answers

UMD per-student state allocation last year was the lowest of any school in the University of Minnesota system. UMD’s figure was about 18 percent lower than Crookston’s, which is the next lowest, and just 39 of the Twin Cities’ per-student allocation. The University of Minnesota’s state allocations are not based on enrollment or any other metric. Once given to UMN, they are included in a budget proposed by President Eric Kaler and approved by the Board of Regents.

State allocations will not be finalized until June, but talks are already underway.

UMN Chief Financial Officer Richard Pfutzenreuter came to campus last Monday to discuss budget planning with UMD's top administrators. In a town hall meeting open to the public, several professors asked Pfutzenreuter why allocations are not associated with enrollment, as it is done in some other states. According to Pfutzenreuter, it would not matter if they were.

"You could say we'll distribute 98 percent of the (state) money based on enrollment, and it really still wouldn't substantively change the allocation," Pfutzenreuter said.

UMD would have received more than twice as much state money last year if allocations were assigned by enrollment. Calculations pursuant to publicly available data show that UMD's FY14 state allocations would have been $72.6 million if distributed on a per-student basis, more than double the $31.8 million actually received. UMD is facing a $6 million recurring structural deficit.

Efforts to eliminate the deficit so far have focused on evaluating programs and services to cut. But in Monday's town hall meeting both Pfutzenreuter and Chancellor Lendley Black acknowledged that the issue cannot be solved by cuts alone.

"We're not just going to cut our way out of this problem," Black said. "We're going to look for ways to grow revenue."

Pfutzenreuter agreed with Black, noting that UMN has generally favored growth to cuts.

“I've been at the University (of Minnesota) almost 23 years, and in that whole 23 years, the goal around here has been to grow your way out of problems," Pfutzenreuter said. "You can't just cut your way out of a problem, you’ve got to grow out of it."

Tuition and state allocations are the primary sources of revenue. Growing revenue without more state allocations would require more tuition and, ultimately, higher enrollment.

Marc Seigar is a physics professor at UMD and voiced this concern to Pfutzenreuter:

"We're at capacity. We can't accept any more students," Seigar said of SCSE. "So it seems to me investment really is the key because … with a little bit of investment we could increase (UMD's) enrollment."

David McMillan, Board of Regents 8th District Representative, said via phone interview that if UMD must increase enrollment but lacks space, then that issue needs to be addressed.

"We need to make sure we don't tell (UMD) to do something they physically can't.”

McMillan supports expansion if it would effectively increase revenue through higher headcounts.

“I'm all in for an investment in assets that would address some of the challenges (UMD) faces in growing enrollment,” McMillan said.

Without increasing revenue, cuts are the only way to eliminate the deficit. At Monday's meeting there was concern among faculty that UMD cannot cut much more than it already has.

"At this point in time, we've done all the cutting we could," Morris Levy, associate professor of biomechanics and chair of the Strategic Planning and Budget committee, said. He acknowledged UMD’s space issue and reiterated the need to expand.

"We all know that adding students … is a difficult proposition right now,” Levy said. “We are at capacity. So, what do we have left? We need to invest. I think that's the bottom line."


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