University of Minnesota to ask Legislature for budget increase and more than $300 million in bonding funds

The University of Minnesota is preparing to make one of its most modest state funding requests in 20 years when it asks for a near $47 million increase to its two-year budget in the upcoming legislative session.

Separately, the school will seek more than $300 million in state capital funds to repair aging infrastructure and renovate buildings. U leaders presented the state funding requests to the Board of Regents on Thursday. The board will vote on the requests in October.

"As a result of COVID-19, we recognize that the state faces a very difficult challenge in aligning decreasing revenues with increasing costs. But we maintain that state investment in the university should remain a priority," U President Joan Gabel said.

Gabel pointed to the U's efforts to help develop a COVID-19 vaccine, increase testing capacity and invent low-cost ventilators as proof that the school's value to the state "has never been higher."

The school's general fund appropriation for fiscal year 2021 is about $671 million. Pending approval from regents, university officials will ask the Legislature to bump the appropriation up to about $687 million in fiscal year 2022 and $702 million in 2023.

The two-year request amounts to a 3.5% increase to the school's existing state budget allocation.

Fully funding the request will help the U retain employees, maintain facilities and enhance academic programs, officials said, noting it is their smallest requested budget increase in more than 20 years.

It's also a recognition of the state's economic outlook — lawmakers are facing a potential $4.7 billion deficit because of pandemic-induced challenges.

Regent Michael Hsu urged Gabel to consider increasing the budget request in an effort to reach parity with the Minnesota State system of public universities and community colleges.

The U and Minnesota State had long received similar state appropriations until recent years, when lawmakers began to allocate more money to the state college system.

Regent Darrin Rosha said university leaders will need to show they are good stewards of money as they seek a funding boost during a legislative session where many entities will rely on the state "for their very survival."

"When you're often perceived as the 800-pound gorilla with massive resources as the university is perceived by many, it's going to make our argument that much more difficult," Rosha said. "We need to be without flaw."

State Sen. Paul Anderson, a Republican from Plymouth who chairs the Senate Higher Education Committee, said the U and other colleges need to keep a potentially "historic deficit" in mind.

"Everyone, including the university, will need to approach the next legislative session with realistic expectations and come to the table with fiscal restraint in mind, not status quo increases to their state funding requests," he said.

State Rep. Connie Bernardy, DFL-New Brighton, countered that it's important the state does not balance its budget on the backs of students.

"That's happened in the past and our students have burdened higher tuition costs," said Bernardy, chairwoman of the House Higher Education Committee.

The U will also seek $329 million in state capital funds to pay for maintenance projects in more than 100 buildings across the school's five campuses, a chemistry undergraduate teaching lab on the Twin Cities campus and a renewal of A.B. Anderson Hall on the Duluth campus, among other things.

Mike Berthelsen, vice president of university services, noted that 50% of U buildings are more than 50 years old. He projected the school needs to spend nearly $5 billion over the next decade to address a growing backlog of deferred maintenance projects.

"We remain hopeful that the state will continue its partnership with us," Berthelsen said.

Ryan Faircloth • 612-673-4234