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MnSCU on guard as budget problems hit state
The Minnesota Department of Finance announced that the state’s revenue forecast is nearly $2 billion short of what it had anticipated several months ago.
In anticipation of such news, Governor Jesse Ventura and the Commissioner of Finance asked a number of state agencies, including Minnesota State Colleges and Universities and the University of Minnesota, to examine their budgets for ways they could make cuts of 5 percent and 10 percent.
Five percent of MnSCU’s budget would mean a loss of approximately $32 million for the system, while 10 percent would cut $64 million. Faculty and students worry that these cuts, if implemented, would cause further increases in tuition.
“Some people make the mistake that the governor has to do with the increases in tuition, when he doesn’t,” said Stewart McMullan, Executive Budget Officer for the Department of Finance. “That is up to the individual colleges.”
“Student tuition has already gone up significantly,” said Jim Pehler, president of the Inter Faculty Organization, the union for faculty at Minnesota’s state universities. “If they cut back on MnSCU’s budget, which was funded at only 39 percent of its needs, they are being grossly unfair and not fulfilling the needs of higher education.”
The number of students at MnSCU institutions increased this year by 5.6 percent. Enrollment at colleges and universities often increases with an economic downturn and discussions of budget cuts cause concern about whether the system will even be able to serve the students already enrolled.
Faculty organizations are worried that further tuition increases would be detrimental to affordable access to higher education for Minnesotan’s at a time when many are looking for retraining or considering career changes.
“We hope that the governor’s proposal is not carried out and that education is excluded from budget cuts, a plan for which some legislators have already advocated,” Pehler said.
“It is unfair to expect students to shoulder the burden of this shortfall through high increases in tuition,” continues Pehler. “We believe that people who received significant tax cuts should help solve this problem.”
Pehler outlined a number of suggestions for dealing with the shortfall:
1. Ventura and the legislature should not make long term decisions. Right now, the revenue shortfall is only a projected one, and the economy could improve. The problem should be solved one biennium at a time.
2. The state’s reserves should be used before any budget cuts are made. Spending money from the tax relief fund, rainy day fund, and cash flow account could make a significant impact on the need for cuts.
3. If necessary, restore income taxes to the 1999 levels in the form of a surcharge until the state recovers from the current recession, or pursue other possible tax options to raise the state funds needed to avoid budget cuts.
4. If it’s absolutely necessary to cut the budget for higher education, there should be an automatic restoration clause added to the bill that allows the money to be returned to higher education, if revenues are above expectations.
“Tax increases are never a good thing, but a short restoration to the 1999 levels in the form of a surcharge would help us solve this deficit problem,” Pehler said.
Kateri Wozny can be reached at: [email protected]
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