U of M, MnSCU plan tuition hikes to cope with state budget deficit

University of Minnesota plans to raise tuition 7.5 percent next year, but that increase could be larger if the U faces deeper than anticipated cuts during the next legislative session.

Minnesota is facing a projected budget deficit of $1.2 billion this budget cycle, and a $5.4 billion shortfall in the following two years.

The University of Minnesota Board of Regents asked state economist Tom Stinson to provide some context on the state's budget problems at their work session on Thursday.

For higher education officials in Minnesota, the news is grim. After years of declining state funding colleges are likely to see further reductions as the state works to balance its budget.

Last spring, Gov. Tim Pawlenty cut $100 million of the U's funding to deal with budget problems. The university reduced spending, encouraged retirements and laid off workers to deal with the cuts.

"It's not going to be easy for us."

University president Robert Bruininks expects now more will be required.

"But it's not going to be easy for us," Bruininks said. "We're going to have to ask all of the people who work here at the University of Minnesota to share in the sacrifice. We're going to have to defer a number of investments that we think are important. We're going to have to work with even more diligence to reduce the costs."

The Minnesota State College and Universities system faces the same challenge. Last spring, the governor also cut $100 million dollars from MnSCU's two-year budget.

MnSCU's chief financial officer Laura King was hoping for better news this year.

"It's grimmer than we were hoping, but it's not a terrible surprise," King said.

King anticipates a $10 million cut to MnSCU's $615 million fiscal year 2011 budget. MnSCU plans to raise tuition next year by 5 percent, but that could increase if higher education funding faces deep cuts next legislative session.

At the U, a 7.5 percent tuition increase is in the works, but that could also go higher. The prospect of bump in tuition is troubling to students.

Tyler Smith, a student at Normandale College and president of the Minnesota State College Student Association, said students worry about more than the size of their tuition bill.

"If we lose funding, often we'll lose teachers," Smith said. "If we lose teachers, we lose courses. And when we lose courses, we end up with some programs that have a waiting list to get into. Also, they just [may] not be at a time when you're able to attend, or they're overlapping with other classes."

When students aren't able to get the classes they need, Smith said it takes them longer to finish their degrees. That costs both the school and students more money.

Lawmakers leave little doubt that higher education will be targeted as the state works to balance its budget. DFL state Sen. Sandy Pappas chairs the senate's higher education committee.

"It could be $10 million, it could be $20 million, it could be $50 million; it'll be probably under $60 million," Pappas said. "I hope it won't go that high."

Pappas said tuition increases are likely as colleges deal with budget cuts. Pappas also expects reductions in financial aid the state hands out to needy students.

One thing that may limit cuts to higher education funding next session is the state receiving nearly $200 million in stimulus funds earlier to hold down tuition increases.

Part of the deal stipulates that lawmakers can't cut higher education funding below 2006 levels though next year, although that could still mean tens of millions of dollars in cuts for both the University of Minnesota and MnSCU.

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