We write to express our concern about how the administration proposes to address the budgetary crisis facing the University of Minnesota, and in particular about its proposals for new construction. The University faces significant challenges in the upcoming biennium, challenges that are all the more daunting since they are taking place in the midst of a leadership transition. We urge the Board of Regents to carefully consider how the decisions made in this year’s budget will affect the future restructuring of the University. In particular, we fear that new building projects will saddle the University with increased debt and ancillary costs that will hobble the institution in future years, thus posing significant risk to its quality and stature.
Why does new construction concern us? Building projects do not pay for themselves. Although construction costs are not paid out of the O&M budget, the University must pay maintenance and utilities on new buildings out of our operating budget. In some cases, new construction includes commitments to add faculty lines, even while faculty positions continue to be cut in most academic units. New construction therefore inevitably adds to recurring costs at the University of Minnesota.
For example, the administration wishes to move forward with the construction of a new biomedical complex. Although the project has been scaled back, according to the Minnesota Daily, the project will cost the University $109 million from fiscal year 2011 to fiscal year 2019 over and above the cost of construction. Of this, $40 million will be for startup costs, $18 million for facility operations and overhead, and $51 million on programs and faculty. Forty new faculty principal investigators will be hired to work in the Center for Magnetic Resonance Research and the Cancer/Cardiovascular facility. The administration claims that $31 million of this will be paid for with grants. Aside from the risk of counting chickens before they hatch, the assertion that grants cover the cost of new faculty lines is simply false. Vice President for Research Mulcahy observed at a recent presentation to the Senate Committee on Research that grants do not cover their costs.
We have not seen a single budget projection that anticipates increased state funding in the near future. New projects that add to recurring costs or debt can therefore only be paid for by making deeper cuts to existing units, raising tuition, or some combination of the two. Embarking on new projects is imprudent in a fiscal environment in which existing academic units have already undergone cuts that severely damage the educational and research missions of the University. These cutbacks have already resulted in reduced teaching support, increased class size, layoffs, furloughs, and temporary pay cuts. Students have already endured both a decline in the quality of their education and repeated tuition increases.
The citizens of Minnesota and legislators may question the wisdom of major capital projects in today’s dire fiscal situation, in particular those investments that do little to enhance the teaching mission of the University. In addition to the concerns expressed above, we fear that spending on new projects at a time when existing programs are suffering could appear profligate to the wider public and hence jeopardize future state allocations.
Given these long-term implications, we recommend a moratorium on all major building projects until the University, in consultation with faculty and students, develops a viable long-term plan for dealing with the “new normal” of reduced state support.
We, the Faculty for the Renewal of Public Education (FRPE), welcome the opportunity to discuss this matter with you before the June Board of Regents meeting. We are an independent network of faculty at the University of Minnesota. You can read more about us on our blog, umnfaculty.blogspot.com, and can reach us by email at FRPE2010@gmail.com.
Bruce Braun, College of Liberal Arts
Teri Caraway, College of Liberal Arts
Eva von Dassow, College of Liberal Arts
on behalf of Faculty for the Renewal of Public Education
Cc: Minnesota House and Senate committees on higher education