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Higher ed officials predict tuition increases, program cuts, layoffs

Gov. Tim Pawlenty said last month that students should not suffer any heavy blows from his proposed budget cuts for higher education.

Impossible, education officials said Thursday in their formal response to the budget in which Pawlenty would slash more than $300 million from the next two years of funding for colleges, universities and higher education programs.

“A 10.7 percent cut as recommended by the governor would have serious consequences for our students and the communities that we serve,” Laura King, chief financial officer and vice chancellor for the Minnesota State Colleges and Universities, testified before the higher education division of the Senate Finance Committee.

“You will see access and opportunities curtailed,” King predicted. “We will be looking at layoffs, program closures, enrollment caps, reducing course offerings and other strategies.”

Facing a state budget shortfall of at least $4.8 billion, Pawlenty challenged higher education leaders last month to come up with more “cost accountability” while also leaning hard on them to cap tuition. In his state of the state address, Pawlenty said the “necessary changes in higher education we will make this session” should not “fall too heavily on students and their families.”

But the governor didn’t say what “necessary changes” he had in mind or how students could be shielded from the higher education cuts proposed in his budget for the next two years.

Seeking flexibility
Pawlenty deliberately held back specific recommendations in order to give the institutions “as much flexibility as possible,” Susan Heegaard, his director of the Office of Higher Education testified at the hearing. But she acknowledged that the institutions already had streamlined operations when their budgets were cut by more than 11 percent during Pawlenty’s first term in office.

Sen. Ron Latz, DFL-St. Louis Park, asked Heegaard how the governor expected people to believe that students and families could be spared this time.

“I don’t understand how it is that you would anticipate that the institutions would be able to keep cuts of this magnitude away from the students,” Latz told her.

“The governor was expressing his hope that first the systems would look toward efficiencies and we know that they have done some of that already,” Heegaard responded. “He felt it was important publically just to state that he felt it was critical that they look at efficiencies and innovation first and as a last resort look at increases in tuition. I think he understands that tuition will have to go up a little.”

Latz was not satisfied.

“One of the reasons that the university and MnSCU get hit with cuts of this magnitude is precisely because they have alternative revenue sources they can turn to, namely students,” he said. “So isn’t the underlying assumption in the governor’s budget that the students are going to have to bear a significant chunk of these cuts?”

In order to make up Pawlenty’s proposed cuts to the 32 colleges and universities in the MnSCU system, tuition would have to increase 11 percent next year, an average of $480 for each undergraduate student, King said.

But she stressed that tuition alone would not bear the brunt of the shortfall. Instead it would be spread across some combination of options beginning with administrative efficiencies.

Other options include staff and/or faculty cuts. The sum Pawlenty proposed is 15 percent of the system’s workforce costs or about 1,000 staff positions. If the cuts came from faculty alone, the system would lose the equivalent of 850 full-time teachers, which would translate into the reduction of more than 8,000 course sections.

‘Shocking numbers’
Another option, King said, would be to close institutions. The system could make up the shortfall by closing one state university and one two-year college or 10 of the smaller colleges, she said.

“These are shocking numbers,” King said. “I mean them to illustrate to you how large this cut is when we apply it against our current program.”

At the University of Minnesota, tuition would need to jump 12 percent next year to fully offset Pawlenty’s proposed cuts, university President Robert Bruininks testified. Or 900 university employees could be laid off.

But that’s not the full picture, Bruininks said. Because of built in cost increases for everything from leases to campus safety programs, the university’s shortfall will be greater than the governor’s proposed cut of $151 million over two years. And it comes on top of millions of dollars of previously approved state funding the governor has “unallotted” for this year’s operations.
Put everything together, and tuition would have to rise 18 percent or 1,500 workers would have to be laid off, Bruininks said.

“Obviously neither of these options is acceptable,” he said.

Even while enrollment is growing, the university already has frozen executive salaries, implemented a “hiring pause” that is very close to a freeze, offered retirement incentives to trim 450 people from the staff and canceled some capital improvement projects, he said.

Beyond cuts to the university and MnSCU, Pawlenty has proposed cutting $15 million from programs funded through the Office of Higher Education, including work study, child care assistance, American Indian scholarships, and the TEACH program which helps fund training for child care workers.

Also on the chopping block are funds for medical residents who are training at the Mayo Medical School and United Family Practice to serve largely rural areas.

While Bruininks said he understands the constraints the economy is forcing on the state’s budget, he also said Pawlenty is pushing a disproportionate share of the pain onto higher education. Pawlenty proposes to shield K-12 education and some other programs from the cuts.

Overall, Pawlenty proposed a 2.2 percent reduction in state spending during the next two years. The university’s budget would be clipped by nearly 8 percent, Bruininks said.

“This budget is disproportionate, and it is contrary to the very best thinking around the world in terms of what it’s going to take to get this state and this country back on the road to economic prosperity,” Bruininks said. “It suggests that higher education in Minnesota is simply not a priority.”

The question of higher education’s place on Minnesota’s priorities looms over the funding debate that will go on for months as the Legislature and Pawlenty punch through the dire straits the economy has forced upon the state.

Unpleasant but necessary
Judging from the give and take on Thursday, it will be a passionate debate encompassing the values Minnesota has placed over the years on advanced learning and pride in its cherished colleges and universities.

Next year, for the first time in the University of Minnesota’s history, state support will be less than tuition revenue, Bruininks said. And soon after that it will be less than the sums the university raises through outside grants and contracts.

“So the state of Minnesota … would become the minority partner in our own flagship university,” Latz reacted. “I don’t understand that. It seems that what we have done is turn a public university into a private university with substantial public support.”

But Sen. Paul Koering, R-Fort Ripley, said the state has little choice given the economic crisis.

“People are losing their jobs, losing their homes,” Koering said. “Sure I’d like to make sure all of the schools are funded and health and human services are funded. Where are we going to get the money?”

Even the eagerly anticipated windfall the state expects from the federal stimulus bill before Congress doesn’t erase the agony, especially given that the largess will come through deficit spending that is financed overseas, Koering said.

“Do you know where that money is going to come from?” Koering asked. “It’s going to come from China, from the United Arab Emirates. These people don’t even like us. And so all we are doing is we are borrowing more money. This [cutting] is very unpleasant, but it has to happen. That’s just the way it is. None of us like this.”

Sharon Schmickle writes about national and foreign affairs and science. She can be reached at sschmickle [at] minnpost [dot] com.

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