University of Minnesota Duluth administrators on Wednesday announced a plan to cut the school’s operations and management budget by $5.2 million next year, intended to erase its recurring deficit, reduce job cuts and save academic programs.

The cuts include 24.7 full-time equivalent (FTE) positions and will directly affect 29 faculty and staff, as well as 13 graduate teaching assistants. The 42 positions make up 2.2% of UMD’s 1,891 faculty and staff; the 24.7 FTE posts make up 1.5% of the school’s 1,605 FTE positions.

As a part of the plan, UMD’s College of Liberal Arts and School of Fine Arts will merge on July 1, 2020 — a move that will save the school about $400,000, according to Executive Vice Chancellor for Academic Affairs Fernando Delgado.

No programs will be eliminated, though three of them will change:

  • The school’s jazz studies major will be replaced by a concentration. Students currently in the major will be able to complete their degrees. There were no new jazz studies majors this fall, Delgado said.

  • The school’s early childhood studies programs will be temporarily suspended and relaunched at a later date. Students admitted to the programs through Fall 2020 will be able to complete their majors.

  • New admissions to the master’s degree program in English will be suspended for two years.

UMD’s Center for Excellence in Teaching and Learning, a professional development resource for educators on campus, also will close, and $225,000 will be trimmed from UMD Facilities Management’s repair and renovation budget.

A total of $3.45 million will be trimmed from the school’s Division of Academic Affairs, which includes each of the school’s colleges and comprises 75% of UMD’s operating budget. According to UMD spokeswoman Lynne Williams, the cuts will be distributed as follows:

  • $750,000 for the College of Liberal Arts (a 5.7% cut)

  • $650,000 for the School of Fine Arts (9%)

  • $600,000 for the College of Education and Human Service Professions (5.1%)

  • $600,000 for central Academic Affairs (3.9%, though some units have made additional adjustments)

  • $500,000 for the Labovitz School of Business and Economics (5.5%)

  • $350,000 for the Swenson College of Science and Engineering (1.4%)

The rest of the $5.2 million will come from cuts to other Academic Affairs units, including the Natural Resources Research Institute and UMD’s information technology department; and from non-academic units including Student Life, Finance and Operations, Development, University Marketing and Public Relations, athletics and the chancellor’s office.

The $5.2 million in cuts make up about 3.1% of the total operations and management budget, which is about $166 million. UMD’s total budget is just more than $288 million.

“This is difficult,” UMD Chancellor Lendley Black told the campus community in an email Wednesday. “While there are solid financial reasons for doing this work, it does not reduce the pain that our employees will feel and the concern from our students and community. These are tough decisions and reflect the challenges that universities across the nation face.”

Black noted in the email that university leadership helped lessen the impact by finding alternative funding and taking advantage of open positions and retirements, saving about 30 full-time equivalent posts.

In recent years, UMD has worked to reduce its “structural imbalance,” as the university refers to the shortfall, which for 2020 is estimated to be $4 million — down from $9.4 million in 2014. The school also expects a $1.2 million dip in funding from the University of Minnesota system.

Each year, the annual shortfall also adds to a one-time sequestered debt, which stands at $6.8 million. Black said Wednesday that it’s possible the U of M system will cancel that debt in light of UMD’s efforts to balance its budget, though there’s no guarantee.

Black and other administrators decided to take steps to erase the deficit after UMD received its budget allocation letter from the U of M system in September, in which Black said U of M President Joan Gabel expressed a desire to see the shortfall addressed.

In addition, Black said that tuition revenue this fall did not meet expectations.

“So, given those factors, the vice chancellors and I talked about it quite a bit,” he said. “And we just finally decided that it would be better to go ahead and make this large action now, instead of continuing to string it out.”

Higher costs, fewer students

The budget cuts are being made as UMD faces growing costs, declining enrollment and stagnant revenue. Enrollment for fall 2019 stands at 10,858, down from a high of 11,806 in 2011. The school is expected to bring in about $115 million in tuition revenue in 2020, virtually unchanged since 2011.

According to a budget briefing document this week, the majority of cost increases include employee compensation, utilities and “cost pool” expenses — shared costs for University of Minnesota system support across its five campuses. Auxiliary operations, such as an upcoming residence and dining hall project, are funded separately.

Adding to the pain are projections that say high school graduation rates will drop significantly starting in 2025.

Speaking to reporters Wednesday, Black said UMD has become more strategic in its recruitment efforts.

“We're now being much more assertive and aggressive, and looking at new markets of students,” he said. “Because even when the demographics turn around and they start coming up again, (they will) be different students in many ways than the students we have traditionally recruited here at UMD. They're going to be from more varied socio-economic backgrounds; they’ll be from different races, cultures, ethnicities in greater numbers than perhaps we've seen in the past, and (there will) probably be more first-generation students as well.”

Leaders noted, however, that UMD’s graduation rates have jumped from 38.5% in 2014 to 48.2% in 2019, meaning that students on the whole have been more successful even as resources were in peril.

Delgado told reporters Wednesday that the higher graduation rates are positive news.

He said UMD will be more attractive to prospective recruits if the university can show that students are graduating on time and with less debt.

“If we can show numbers that tell a prospective student, ‘Your opportunity to pursue any number of degree fields is here, and the chances of you participating in your success and getting out of here in four years is at a high level,’ that becomes a selling point to attract students,” he said. “And that's part of the narrative that we now have to flip. Instead of saying, ‘Oh, we're losing students faster,’ it's, ‘No, our students are succeeding faster.’”

Committed to the arts

In Wednesday’s letter to campus, Black also addressed recent conversations about the value of fine and liberal arts at UMD.

In a Nov. 7 News Tribune article, UMD history professor Scott Laderman, president of the University Educators Association, said he had seen preliminary proposals calling for deeper cuts to the School of Fine Arts budget than that of other UMD colleges.

“The University of Minnesota system needs to start thinking about its Duluth campus as a priority,” Laderman said then. “We have not been treated as a priority for years.”

Laderman did not return a message from the News Tribune late Wednesday afternoon.

On Wednesday, Delgado said that such cuts would have been more severe had it not been for at least a dozen faculty members who opted to retire earlier than planned to save the school money.

“Had we not had the sacrifice of some of our faculty retiring and leaving those vacant positions, had we not had the creativity of our deans and finding (other sources of funding), then I think the numbers and the concerns raised by our faculty union leadership would have been bang-on right,” he said.

Comments in the Nov. 7 story from Vice Chancellor for Finance and Operations Steve Keto were interpreted by some students and faculty as suggesting a lack of support for fine arts students and programs.

The story prompted a group of UMD fine arts students to send a letter to the chancellor in which they condemned Keto’s statements as being “ill-advised and inaccurate (and) damaging to the School of Fine Arts.”

In his letter to campus, Black — a theater professor himself — sought to reaffirm the school’s commitment to the arts.

“Let me assure you that both the fine arts and liberal arts are critical components to UMD and will continue to be central to our mission, as well as our artistic and academic experiences,” Black wrote.

The chancellor restated the university’s efforts to save academic programs.

“Merging (the College of Liberal Arts and the School of Fine Arts) not only helps to preserve programs and faculty lines, but it may bring further collaboration and opportunities for students, faculty and staff,” he wrote.

Dr. Jeremy Youde, dean of the College of Liberal Arts, will oversee the new, combined college. Current School of Fine Arts Dean Dr. Robert Kase will return to a faculty position, Williams said.

Youde said Wednesday that while cuts are hard, the merger preserves faculty jobs.

“(The merger) shouldn't make a change for students or for faculty on what they're doing on a day-to-day basis,” he said. “If we can make this change on the structural level, so that we can still protect all the programs that we have for our students, that to me makes a lot of sense.

“If the if the merger hadn’t happened, we would be losing more of our colleagues, and then the possibility of having to actually cut programs would have to be on the table.”

Delgado, too, sought to put the arts programs’ budget cuts in perspective.

“Everybody looks at the snapshot, right? I look at a movie,” he said. “So, today, (the School of Fine Arts) — rightfully — the students and faculty and staff are frustrated. ‘Why did you take $600,000? And you're pulling $400,000 of savings out of us in the merger.’ And I reminded them that the College of Liberal Arts took $750,000 this year, too, and it took nearly half of the $900,000 that we cut last spring, and $1.1 million of the $2 million we cut (in 2017).”

Delgado said that some on campus have questioned why the Swenson College of Engineering, with its 1.4% trim versus the School of Fine Arts’ 9%, has come out relatively unscathed.

But that’s not the whole story, Delgado said.

“What nobody knows is that I was unable to fully fund Swenson this year,” he said. “So they de facto took nearly a $300,000 cut this year, and it's against that reduced budget (that next year’s cuts were made).”

The engineering school has seen its enrollment steadily increase during the past decade as the number of students at other colleges has declined or remained relatively flat.

In his comments Wednesday, Black kept his focus on the future.

“You know, there were some statements early on when we started this process that this was going to be devastating to UMD,” he said. “It certainly is devastating to the individuals involved — there's no question about that — but this is not going to devastate us as an institution. We're going to keep moving forward.”