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Will Walz’s One Minnesota agenda help even the higher-ed playing field?

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Darrell Downs
I applaud Gov. Tim Walz’s “One Minnesota” campaign. It suggests to me we have some work to do if we want a more prosperous state where everyone has an equal chance to get ahead. It’s hard to find fault in an agenda that promises to build bridges across political divides. Yet I wonder if Walz’s bridge-building agenda will include the divide in higher education.

Let’s face it. The playing field for higher education is tilted against the state colleges and universities. They serve more students than the private colleges and the University of Minnesota combined, charge less in tuition, and manage their budgets without the cushion of big endowments. When it comes to reform however, the Minnesota State (MinnState) schools are always expected to do more with less. 

Why is MinnState ground zero for change?

Shouldn’t all three systems (the U, private colleges and MinnState) be at the table? We would insist on it in any other context. When Major League Baseball needs fixing, we don’t expect a remedy from the Minnesota Twins’ dugout. So why is MinnState ground zero for change? 

MinnState was born to reform. It was built on the state technical colleges, community colleges, and state universities, some with roots in the 1850s, and as the new system was put in place in 1995, it was a symbol of change. Starting with an administrative hub in St. Paul, the system quickly expanded its control to over 30 colleges and 7 universities. Centralizing campus operations – even where it shouldn’t – in finance, technology, personnel systems, and curriculum review, MinnState became the poster child for organizational tinkering. Sadly, no governor, from Arne Carlson to Mark Dayton, had the courage to put reform on a larger statewide agenda. 

Consider MinnState’s Charting the Future plan under Dayton. High-priced consultants from McKinsey & Company set forth a planning process with a tin ear to local campus concerns that led predictably to even more top-down controls and internecine warfare between St. Paul bureaucrats and increasingly powerless campuses struggling to meet student needs. With Dayton’s trustees still in charge, Chancellor Devinder Malhotra is now at the helm of a new reform called “Reimagining Higher Education.” Maybe this will be different, but if it is, it will be because MinnState is given a fighting chance to compete with the private colleges and the U of M.  That chance has to come through appropriate resources.  

Three currencies of system success

There are three basic currencies of system success in higher education: tuition, state support, and endowments. With MinnState, private colleges, and the U all possessing different ways to manage these currencies, the result is a contest where winning is more about accumulating these currencies than about education. 

The private colleges rely heavily on tuition. At an average of about $30,000 per year, tuition can exceed $50,000 at Carleton and Macalester Colleges. When private colleges decide (if ever) to hold off on tuition increases, they can count on multimillion-dollar endowments to smooth over hard financial times. Most private endowments are less than $100 million, but some are several times that amount, with Carleton topping out the system at $850 million. Since the Minnesota Constitution does not allow direct public funding of sectarian education, private colleges are limited to indirect state support, which they get in spades. 

No modern governor favored the private colleges more than Harold LeVander. In his 1969 address to the Legislature, LeVander described declining enrollments in the private schools and colleges as an “immediate, sometimes intolerable burden on the taxpayer, who must then provide many more public facilities, teachers, and administrators.” In the same year, the Legislature put taxpayer dollars toward developing new student aid programs for all Minnesota students. The eventual result was the Minnesota State Grant Program.

The State Grant Program today delivers over $194 million in student aid. Thirty-three percent of its dollars go to the private colleges enrolling only 15 percent of the state’s students.  Similarly, for every dollar going to MinnState university students, nearly two dollars are going to private college students. The reason for this is that student awards are proportionate to the attendance costs of the school that students attend – pricier choices lead to bigger awards. The private colleges doubly benefit from the subsidy because the aid represents savings in what would otherwise have been drawn from private sources to support low-income students.  This is a good deal for promoting high-cost institutions and not so much for MinnState. 

Equal and fair are worlds apart

The terrain of the University of Minnesota is very different. The Minnesota Constitution provides the U with “constitutional autonomy.” This means that once the Legislature has chosen the U’s Board of Regents, the latter is free to manage the university with little interference. Like the private colleges, the U of M can set its own tuition without fear of legislative caps or freezes, which today stands at approximately $14,000 per year. It’s also true, however, that the Legislature sets the appropriations for the U, and through a legislative norm called “parity,” lawmakers normally set the appropriations of the U of M equal to that of MinnState (or vice versa). This is a case where equal and fair are worlds apart, as MinnState serves about twice as many undergraduates as the U of M system. If that isn’t enough to show an uneven playing field, the U also has a whopping $3.5 billion endowment to help survive enrollment declines or slippage in state appropriations. 

MinnState has no financial safety net comparable to the privates and the U. MinnState trustees approve campus tuitions, but without the autonomy of the privates or the U, the Legislature approves state appropriations after the system presents its projected tuition increases, and after the parity with the U is sorted out. In the end, Legislature-imposed or trustee-imposed tuition limits on the campuses are always a possibility. With no real endowments to soften the blow, and college tuition at approximately $5,000 per year and $8,000 per year at the state universities, MinnState campuses are running dangerously lean. Making matters even worse, the Legislature has retreated on its 1994 promise to pay for two-thirds of the operation of the public systems, leaving all public systems more dependent on tuition, more students dependent on aid, and fewer students becoming financially independent for decades to come.  

Today MinnState campuses face serious challenges. Student debt is at a record high, and enrollment is stagnant. As LeVander had hoped, tax relief has trumped public investments in education, and some believe that public higher education should become the job training centers for Minnesota business. We only need to look to Washington to see what can happen if our citizens (and our leaders) don’t get a chance at excellence in higher education.

Walz has delivered a powerful message for “One Minnesota,” and maybe MinnState will be given fair chance at being part of that too.

Darrell Downs, Ph.D., is a professor in political science and public administration at Winona State University. He is a past president of the WSU Faculty Association.

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Comments (4)

  1. Submitted by Don Casey on 03/23/2019 - 01:01 pm.

    State support of higher education had been in decline for more than two decades. Recent years: spending on higher education was 10,7% o.f the state budget in 2010 and 4.9% in 2015 (Ballotpedia). The low point was 4.4% of the budget in 2014.

    In contrast, 2015 spending on higher education by neighboring states: Iowa 25.5% of budget, South Dakota 17.8%, Wisconsin 14.5%.

    As I recall (off the top of the head), in the ’90s, state support accounted for about 40% of the budgets of state colleges and 25% of the U of M.

  2. Submitted by Michael Hess on 03/24/2019 - 11:07 am.

    All the data i have seen makes it look like MinnState is serving a different constituency than the private colleges. Carleton for example pulls a majority of students from outside Minnesota. Each system should optimize how they fulfill their mission, instead of treating higher ed line a zero sum game.

  3. Submitted by Andrew Andrusko on 03/25/2019 - 08:12 am.

    Dr. Downs makes a clear point with this commentary. I agree with everything that’s being said to the point that most of his arguments are based solely on facts and not opinion. It is a fact that the MnSCU system is underfunded and comparatively funded at an inequitable rate. I think it is great that there is a voice that understands the plight of the State system and is able to articulate the structural problems of higher education in Minnesota today.

    On that point it is interesting to me that the state DFL continues to ignore these issues will running on a campaign of equity in education. Quite literally the above trends were only made worse during the previous administration through the application of successive tuition freezes which hurt the financial management of the state universities. Too often the DFL is more interested in ignoring the plight of Minnesota State colleges and universities while favoring the University of Minnesota and private colleges.

  4. Submitted by John Evans on 03/25/2019 - 04:09 pm.

    We could fix the inequity in the state grant for free with one single law change.

    One idea would be to make the size of the individual grant equal, no matter which college the student attends. Another idea, (my favorite,) would be to make it available only for use a public institution.

    This one easy step would be a big help to our state colleges and universities.

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