Higher ed budgets headed for scrutiny

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Gene Pelowski pulled out his iPad on the first day of session and went straight to YouTube. The incoming Democratic chairman of the House Higher Education Finance and Policy Committee likes to pull up the same video clip for anyone who comes into his office to ask for something: the famous opening scene of the Marx brother’s 1932 movie “Horse Feathers.” In the clip, a new college president — played by Groucho Marx — launches into a song stating his position on almost everything: “I’m against it.”

“I like to play this for people who come in here and off the bat start asking for things,” Pelowski laughed while the video played.

Pelowski says he’s heading into 2013 legislative session with a similar message, particularly when it comes to requests from the University of Minnesota and the Minnesota State Colleges and Universities system (MNSCU). In its mid-October budget proposal, the university laid out a plan to seek a $91 million increase in state support in exchange for mostly administrative spending cuts and a promise to freeze tuition. That would bring the state’s total contribution to $1.18 billion over the 2013-14 biennium. Soon afterward, MNSCU released a similar plan that sought a $98 million increase and included a tuition cap and cuts. During the 2011 budget fight that ended in a 20-day government shutdown, higher education took a $351 million cut for the 2012-2013 biennium.

But Pelowski, known as one of the more conservative members of the House DFL caucus, has already publicly grumbled about increased administrative spending at MNSCU while tuition costs soar and graduation rates remain low. His case was bolstered in January after a Wall Street Journal article pointed to similar bloat at the University of Minnesota. According to the piece, the university added more than 1,000 administrators to its payroll since 2001, and as of the 2011-12 academic year, it “had the largest share of employees classified as ‘executive/administrative and managerial’ among the [nation’s] 72 ‘very-high-research’ public universities.”

These increased administrative costs are playing out against a backdrop of rising tuition for students, Pelowski said. “We have higher tuition across both systems, and there’s a fee on just about everything. If they could put a fee on air, I’m sure they’d put a fee on air,” he said. “What we have now is historic debt for students. We are pricing people out of a higher education.”

Pelowski: Audit higher ed budgets

Pelowski’s plan is to move ahead with what he calls a “legislative audit” of both the university and MNSCU system’s finances. He wants to review everything from spending, salaries and reserve funds to cuts the schools have made over the years and how that may have affected programs.

“This is not a witch hunt, but this hasn’t been done in more than a decade,” he said. “They haven’t been held accountable, but they will be held accountable.”

The process could take months of committee hearings, Pelowski said, adding that he doesn’t plan on hearing a bill for funding increases until the process is finished. “We need to know where that money has been going before we can do anything,” he said, adding that there’s no guarantee the Legislature will approve any additional funding when that process is complete. “In this environment, I can’t promise anyone new money — we are still $1.1 billion in the hole. If we get out of this session and you don’t get cut, that’s an accomplishment.”

Pelowski isn’t the only one with raised eyebrows. Senate DFL Higher Education Chairwoman Terri Bonoff said “alarm bells” went off when she read the Journal article. Her main goal will be to lower tuition and loans for students, and she’s not opposed to eliminating administrative redundancies at the university. Bonoff says she has met with university officials and they appear to be willing partners in that quest.

“The article emphasized the need to do a data-driven analysis,” she said. “I think you will see a strong partnership [with the university] in that endeavor.”

University to push for more funding

For his part, University of Minnesota President Eric Kaler is not backing down from his original request. Kaler met with Pelowski late last week to outline some problems he saw with the Journal investigation and reiterate his request for increased funding for the biennium. Kaler will also discuss the university’s legislative priorities at a press conference on Friday.

“If passed by the Legislature, the university’s $1.18 billion biennial budget request would help advance industry and the state’s economy, and keep tuition steady for undergraduate resident students,” Kaler said in a statement on Tuesday. “As part of a long-term commitment to cut costs and operate more efficiently, the university’s legislative proposal also focuses on the U saving $28 million over the next two years, despite the state returning university funding to 2001 levels.” University officials did not return calls seeking comment.

Former Senate DFL majority leader and current University of Minnesota regent Dean Johnson says the university expected a review of its finances in a budget year at the Capitol. University leadership will do its due diligence in any investigation of the system’s finances, he said.

“Are there ways we can tighten and become more efficient? The answer is yes,” Johnson said. “But our main goal is to maintain our mission, which is teaching, research and outreach, and helping our state move forward.”

The university and MNSCU will likely have support from a number of freshman DFL legislators who were elected in districts that are also home to major universities. Freshman DFL Rep. Zachary Dorholt will serve as vice-chair on Pelowski’s committee. He hails from St. Cloud, home to St. Cloud State University. Dorholt says he supports increasing funding for higher education.

“Both of the [systems] had their budget proposals done before they knew the makeup of this Legislature, so I think we need to take that very seriously,” he said. “It’s my personal feeling that we need to increase support for higher education. That’s part of why I asked to be on the committee.”