Minnesota State pledges tuition freeze with bid for $350 million state funding increase

The Minnesota State system of colleges and universities has revived a plan to freeze tuition as part of its pitch for an additional $350 million in the next biennium — its largest-ever two-year ask of state lawmakers.

"This is it," Roger Moe, chairman of the board of trustees, said after a presentation of the proposal Wednesday. "We have to go all out on this."

The move comes after the system's request for a state-funded freeze failed to win approval from legislators this year — leaving the board of trustees to ultimately approve an average 3.5 % tuition hike for students in 2022-23.

Minnesota State officials put the cost of the two-year freeze at $75 million.

The biggest part of the package, however, would be a request for $125 million — $40 million in 2023-24 and $85 million in 2024-25 — to help steady budgets amid inflationary increases across the system of 26 colleges and seven universities.

The proposal reflects a desire to sustain a system beset with enrollment losses while also building on its potential to be a workforce driver through investments in new labs and equipment.

"Without increases in general fund revenues, campuses will need to reduce the breadth of academic programs and student services that are available to students at the same time that demands have increased," the budget document states.

The proposal for the two-year increase will be presented to lawmakers during the upcoming legislative session — one that could find new leaders atop the House and Senate panels that guide biennial funding and policy decisions.

Asked about the request Wednesday, Sen. Jason Rarick, R-Pine City, and vice chair of the Senate Higher Education Committee said, "This is a big ask and we know the needs for students are great. We will take a good look at the best way to ensure the Minnesota State system is preparing tomorrow's workforce as we consider their request."

Funding of the state's higher-education institutions has long been a lower priority for legislators than that of K-12 schools, a fact acknowledged by Minnesota State, which prides itself on workforce development but has seen enrollment slide.

Trustees learned Wednesday that enrollment systemwide is down an estimated 3.8 % this year, a steeper drop than the 2.2 % decline projected in June.

The proposed $350 million state funding increase would exceed the $205 million being pursued by the University of Minnesota.

The U is seeking to cover inflationary costs while also investing in efforts to improve safety on the Twin Cities campus and to boost financial aid for students statewide. The U's proposal does not include a tuition freeze; in fact, administrators say increases in tuition revenue could be part of a deal to split inflationary costs with the state.

Higher-ed officials were among the many stakeholders frustrated when lawmakers left most of a multibillion-dollar state budget surplus unspent.

Now, by backing what he describes as a "bold and aggressive agenda," Minnesota State Chancellor Devinder Malhotra said legislators have an opportunity to make the kind of strategic investment that could grow the surplus. Malhotra also announced Wednesday that he will retire in August 2023 after six years leading the system.

Part of the optimism stems from the ability of Minnesota State's community and technical colleges to help ease the state's current workforce shortage.

To that end, the system is seeking a $100 million state investment in new labs and equipment, scholarships in high-demand fields and new programming — money it says would be matched one-to-one by its business and industry partners.

"Performance metrics will be established to clearly show the return on investment," the budget document states.

Trustee Kathy Sheran said she wondered how quickly the system can go from talking about the needs of a changing workforce to actually creating new programs. Officials plan to provide more details before the board takes final action on the request in November.

Moe, a former state Senate majority leader, said he liked the idea of Minnesota State moving to "hustle" dollars and in-kind donations from unions and businesses that have called out for more trained workers. But he said legislators also need to deliver the funds needed to stabilize the nation's third-largest state college system.

"Either you sustain the system or you make the decision where we downsize," Moe said. "This is a reasonable request. It is not out of some fantasy land."