UMD's budget deficit reduced to $5.5 million
The University of Minnesota Duluth's deficit has been reduced to $5.5 million following the U of M Board of Regents' approval Friday of President Eric Kaler's budget for next school year.
The University of Minnesota Duluth’s deficit has been reduced to $5.5 million following the U of M Board of Regents’ approval Friday of President Eric Kaler’s budget for next school year.
The budget means $1 million in new, annual money for UMD and a $4.6 million increase to its operational budget, bringing that portion to $36.3 million. Nearly
$3 million of that increase comes from the state for freezing in-state undergraduate tuition.
“We really had unprecedented system support here,” said Michael Seymour, UMD’s vice chancellor for finance and operations. “We essentially cut our overall deficit in half.”
UMD faced a $9.4 million yearly deficit, which came from a reduction in the amount of money the U of M has doled out to the school in recent years, paired with a large drop in enrollment beginning in 2011. A onetime $3.9 million deficit is blamed mostly on a fringe benefit shortfall. That was from a time when the school wasn’t setting aside enough money to pay graduate teaching
The budget allocation and other measures UMD has recently taken - including accepting more than 60 voluntary layoffs of employees - has reduced the ongoing deficit to $5.5 million. The majority of the university’s onetime shortfall will be paid through U of M funds. Kaler designated $1.2 million initially, and promised
$2.5 million more would go to cover it should a move by lawmakers to help UMD through its financial woes not make it through the past session. It did not.
More than $290 million in system-wide facility projects was also approved Friday. The new $3.6 billion
U of M budget freezes resident undergraduate tuition for the second year in a row and includes $23 million in spending on faculty hires, classroom upgrades and other investments. The budget will also trim more than
$20 million in administrative costs, mostly in staff positions shed through attrition.
The tuition freeze was part of a deal the university struck with legislators last year in exchange for a boost in state aid. The new budget raises tuition for
out-of-state and most graduate students.
The university received $199.4 million from the state Legislature for its facility projects this year. UMD received $1.5 million of that to use toward pre-design work for a planned advanced materials and chemical sciences building. It had asked for $24 million. UMD will also receive nearly $4 million in Higher Education Asset Preservation and Renovation money out of the
$42.5 million chunk given to the system from the state.
Seymour expects to reduce the remaining deficit in three years with the partnership of the U of M system. Budget talks will resume when faculty members return in August, he said, but he’s hopeful the university will be able to balance its budget in a way that leans more toward revenue increases and less toward cuts.
“The chancellor has done a great job of keeping us all optimists,” he said. “We had quite a mountain to climb.”
The St. Paul Pioneer Press contributed to this report.