The University of Minnesota Board of Regents reviewed President Bob Bruininks’ proposed 2010 budget at their meetings Thursday and Friday.
University Chief Financial Officer Richard Pfutzenreuter , who presented the proposal at Thursday’s Finance and Operations Committee meeting, said the base tuition increase would be 7.5 percent, or $720 per student.
With the addition of the $89.3 million in federal stimulus money over the next two years, undergraduate Minnesota residents would receive $420, reducing the tuition increase to no more than $300 per student, or about 3.1 percent, Pfutzenreuter said.
Non-residents, graduate and professional students, however, will not benefit from the federal money and will feel the full impact of the $720 increase.
Bruininks also said 1,240 University positions will be eliminated because of a 7.4 percent decrease in state funding and $95 million in internal cuts in 2009-10. In addition to the anticipated 370 layoffs, more than 200 faculty positions will be left open, including some in the Medical School and Institute of Technology and 280 staff positions will be eliminated.
“In some particular areas, the loss of a position is the loss of other sources of income,” Bruininks said at the meeting. “We’re eliminating more than 5 1/2 percent of the University’s workforce. These are real impacts.”
On the other hand, there will be a new Middle Income Scholarship Program for students whose families’ income is $40,000-$100,000, which $15.6 million of the stimulus funds will go toward. It will benefit around 29 percent of undergraduate students, Vice Provost and Dean of Undergraduate Education Robert McMaster said. Some will receive as much as $1,500 through the scholarship.
Overall, about 60 percent of Minnesota students would see their tuition decrease.
But in 2012, with the disappearance of the federal stimulus dollars, tuition increases would be added on to the original 7.5 percent increase, and the estimated increase in 2012 is 4.5 percent, according to the proposal presented by Pfutzenreuter.
“The federal stimulus money really helps a great deal in the next two years,” Bruininks said. “I think the concern, long-term, is what will the level of state support be for the University of Minnesota in the years 2012 and 2013.”
Whatever the state funding is in the future, Bruininks said, the Middle Income Scholarship Program will continue. He said he hopes with that particular scholarship and others, tuition will be offset and the rate of increase can be reduced in 2012.
“We can work together to achieve a softer landing for students and families,” he said.
Despite the federal stimulus money and the Middle Income Scholarship Program, the amount students pay for tuition in 2010 will, for the first time, be higher than the amount the University receives from state support.
“It’s frankly probably unlikely that those lines will go back to where tuition is a lower share of the University’s budget than state funds,” Pfutzenreuter said.
A public forum on the proposed budget will be held June 17, and the regents will act on the draft at their June 24 meeting.
While Pfutzenreuter did not speculate on whether the current proposal will pass or the types of changes that might be made, some regents at the Finance and Operations Committee meeting disagreed on the draft.
Regent John Frobenius said he found the current budget proposal “difficult to support at this time.”
“What are we setting ourselves up for in two years?” he said.
Bruininks said the pressure to balance the budget relies more on internal cost reductions, such as the loss of jobs, than on increasing tuition.
But Frobenius questioned whether the University has reduced internal costs as much as it can.
“I still am not convinced in my own head that we have pushed ourselves as far as we can in internal cost allocation,” he said.
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