Budget announcement, reaction, auditing and access

Governor recommends $146 million cut to the Minnesota State Colleges and Universities system

Gov. Tim Pawlenty presented his budget this week with key principles in mind: balance the budget, fund priorities in order of importance, strategically position Minnesota for success in a changing world, enhance and expand pay for performance, and do not increase burdens by raising taxes.

For higher education, a total reduction of $312.7 million was proposed. This includes a 10 percent decrease over the total higher education base budget. The governor is recommending a reduction to the Minnesota State Colleges and Universities of $146 million, a 10.7 percent reduction. The University of Minnesota is reduced $151 million in the proposal. The governor also recommends both the Minnesota State Colleges and Universities and the University of Minnesota institute firm caps on tuition increases to ensure the budget decisions do not harm students.

Of the $4.8 billion budget deficit, the governor's budget includes $2.5 billion in cuts and savings. The governor included a $920 million placeholder in federal stimulus dollars and nearly $1 billion in tobacco appropriation bonds. Under the governor's proposal, K-12 education would see an increase with a focus on Q-Comp and other pay-for-performance initiatives. There are accounting shifts in the aid payments to schools that temporarily will save the state nearly $1.3 billion. The governor’s budget also included corporate tax cuts, which he said are important to attract business to the state.

You may find further details here.

Pawlenty discussed his budget recommendations on Minnesota Public Radio and said his proposal likely will need to change because the economy has continued to deteriorate. It is likely to get worse with the February economic forecast. Pawlenty said he also is expecting to get more federal dollars in the economic stimulus package than his budget accounts for, so his budget may have to be adjusted. The governor said the state needs to tighten its belt just like everyone else; he does not believe it is a good idea to raise taxes in this type of economic environment. In regard to his proposal to cut corporate taxes, the governor said it's important because the state has to strategically reposition itself to be more competitive in the future and attract businesses. He said programs, such as health care are growing so fast that they need to be slowed down in order to sustain them. Minnesota is a high-spending, high-tax state, he said, and at some point it needs to learn to live within its means.

In regards to the tuition cap proposal, Pawlenty said he believes it will force systems to manage the goal of keeping tuition increases reasonable and keep budget challenges from being balanced on the backs of students. He said he left the cap open-ended but would like it to be modest and close to the rate of inflation. Pawlenty did say he hopes higher education will implement a salary freeze and to stop trying to do everything everywhere, but rather prioritize.

House Speaker Margaret Anderson-Kelliher, DFL-Minneapolis, spoke about the state's budget situation and Pawlenty's proposed corporate tax cuts. Kelliher said the state's focus should be on getting out of the budget deficit, not digging the state further into debt. Kelliher said tax cuts will not solve the immediate problem. Kelliher also said the state is not on the right path for economic development. One of the things the state needs to do, she said, is make strategic developments in higher education. She said she would like higher education and K-12 to tell lawmakers what their needs are and what it's going to take to meet their goals. She has developed an open comments page for the public share ideas with legislators, located at http://www.house.leg.state.mn.us/budgetsuggestions.asp. The Senate has a similar page, at http://budgetforum.senate.mn/. Kelliher added that the state may not be able to help this session, but lawmakers would like to know what it will take to get there. The speaker also urged people to be respectful of the process between management and bargaining units when it comes to state employee salaries. Majority Leader Tony Sertich, DFL-Chisholm, said the governor's budget is the blueprint document for how they're going to balance the budget, and DFL leadership will first look for areas of agreement.

System reacts to budget cuts

The Minnesota State Colleges and Universities system testified at the House Higher Education and Workforce Development Finance and Policy committee this week on the $191 million cut to the system in 2003, the current fiscal year unallotment of $20 million and what the system is facing now: Gov. Pawlenty’s proposed cut of $146 million. Trustee Tom Renier told committee members the system is sobered by the size of the state budget deficit. He said, "Our presidents are used to making tough decisions, and for the past several months they have been engaged in planning for a variety of budget scenarios." Renier continued, "As a board, we intend to move thoughtfully and to make sure we have all the information we need to make decisions that will be in the best interest of our students and of the state of Minnesota."

Chancellor James McCormick testified that he understands the difficult decisions ahead for lawmakers, but he believes it is important to remember that higher education is the key to economic recovery. McCormick said: "Our colleges and universities are the place where laid-off workers will turn to learn new skills for new jobs. Our colleges and universities offer everything from short-term programs to associate, bachelor’s and graduate degree programs."

Laura King, vice chancellor and chief financial officer, reiterated the three key principles the system will follow when making budget decisions: Choices will be made in a way that best serves students; the system will take into account how to serve the economic development needs of the state and its communities; and will take a multiyear approach, positioning the system for long-term financial viability. King laid out a variety of potential consequences to the governor’s proposed 10.7 percent budget reduction for the system, including higher tuition rates, reduced course offerings, enrollment caps and reduced student services. King said none of the options represented the actions the system would take nor should they be viewed as exclusive of one another. King said: “It is probable that we would apply a combination of all or most of the following tools should we be required to absorb such a significant reduction. But they do illustrate the magnitude of what we are facing.”

Presidents Richard Davenport of Minnesota State University, Mankato and Ann Wynia of North Hennepin Community College discussed the impact the cuts would have on their institutions. Davenport said his institution already is preparing for cuts by eliminating programs, leaving staff positions vacant and even moving some classes to a local movie theater to allow for more students per class. Wynia added that colleges are serving many first-generation college students. She said the system is finding ways to support students and improve retention even with the budget challenges.

Auditing commended

Earlier this week, the Minnesota State Colleges and Universities internal audit model was highlighted as an example to follow. Laura King, vice chancellor and CFO, testified about how internal controls are managed at the system, and John Asmussen, executive director for internal audit, testified about the essential elements of an effective internal auditing practice. Asmussen said strong support from the governing board and the chancellor are important to having effective internal controls and internal auditing.

Committee members also learned about how internal controls and internal auditing could be shored up in the Executive Branch. Asmussen suggested that the governor have a reporting channel in the Executive Branch to ensure that known problems are fixed with internal controls, including timely resolution of audit findings. The committee is looking at models of internal control for state government.

Access is a priority of the Minnesota State Colleges and Universities

The message that access is a priority of the Minnesota State Colleges and Universities was conveyed to the Senate Higher Education Budget and Policy Committee this week. In 2007, the Legislature awarded the system money to increase access for first-generation, low-income and minority students, those traditionally underrepresented in higher education. “As we enable these students, we are going to have a world-class workforce in Minnesota,” said Chancellor McCormick.

Linda Baer, senior vice chancellor for academic and student affairs, discussed the system's goals for increased enrollment, retention, and graduation of underrepresented populations. She said the four main goals are increased access and opportunity, the promotion and measurement of high-quality learning programs and services, enhancement of the economic competitiveness of the state and its regions, and innovation for current and future educational needs.

Whitney Harris, executive director of multiculturalism, said the state should be mindful of recruiting new students, especially as the demographics change. He said a focus group showed that students in the underrepresented categories said their parents did not know how to help them, they lacked role models within their communities, and they did not know how to access financial aid. He described the successful Super Weekend: Last week, top system officials went to neighborhoods and brought college information to where potential and current students are, Harris said.

President Donovan Schwichtenberg of Saint Paul College shared the success of the Power of You program, which allows high school graduates of Minneapolis and St. Paul schools to attend college for free at Saint Paul College , Minneapolis Community and Technical College, or Metropolitan State University if they meet certain criteria. Schwichtenberg said that the program has nearly doubled enrollment for first-generation and minority students. He also said the program has increased enrollment, retention and graduation rates among this cohort.

Also testifying was Louis Mendoza with the Office of Equity and Diversity at the University of Minnesota. Mendoza spoke about the university's efforts to recruit and integrate students from underserved populations. “The different programs implemented at the university work to foster a culture of belonging,” said Mendoza. Students involved in the multicultural programs take classes together, are paired with mentors and are involved in tutoring programs.

Another program illustrated to committee members is the Get Ready Program. Director of Community Outreach Mary Lou Dresbach with the Office of Higher Education said it is an early college awareness program targeted to lower-income students and students of color, primarily funded through a federal grant. The program is in 11 schools throughout St. Paul and Minneapolis and the work begins with students in fourth grade, as well as teachers and counselors.

Student organizations hold regional events

The Minnesota State University Student Association and the Minnesota State College Student Association will be holding regional media events on the state university campuses. The event are aimed at promoting discussions about higher education and to explain the importance colleges and universities play in the economic recovery. Below are details about each event. For more information on the events, you may contact Jason Fossum at 651-297-5877 or jfossum@mscsa.org.

Bemidji:
Date: Thursday, February 5Time: Noon - 1 p.m. (Press Conference) Rally and Community Event 4 p.m.Location: Bemidji State CampusOther Details: Press conference followed by all night camping event.

Marshall:
Date: Tuesday February 10Time: 11 a.m.-2 p.m.Location: SMSU Student Center Other Details: Press Conference followed by rally on campus
Theme: Buck Tuition

St. Cloud:
Date: Wednesday February 11Time: 11 a.m.-1 p.m. Location: SCSU CampusOther Details: Press Conference followed by rally on campus
Theme: The Game of Student Life

Mankato:
Date: Thursday February 12Time: 3 p.m.-5 p.m.Location: Minnesota State University, Mankato CampusOther Details: Press Conference followed by rally event on campus
Other Details: Theme: Hope for Higher Education

Moorhead:
Date: Thursday February 12 Time: 11 a.m.-2 p.m. Location: MSUM CampusOther Details: Press Conference followed by rally
Theme: Price is Right

Winona:
Date: Friday February 13Time: Noon -2 p.m. Location: WSU Student UnionOther Details: Press Conference followed by outdoor rally
Theme: Crashed Economy)

Federal Update

Economic Stimulus package
Along party lines with a vote of 244-188 (11 Democrats joined with Republicans to oppose the bill), the House passed an economic stimulus package Wednesday evening. See the vote tally at http://clerk.house.gov/evs/2009/roll046.xml.

The U.S. Senate Appropriations Committee released a statement of highlights from the proposed Senate Bill to stimulate the economy on Tuesday. The Senate has not voted on its overall bill. A comparison of both bills is available by emailing candi.walz@so.mnscu.edu.