Despite record state spending on Higher Ed last session, the U of M is seeking more funding from taxpayers

Thanks to Minnesota’s $72 billion budget, Higher Education got over a $1 billion boost for the four-year period between FY 2024 and FY 2027. Specifically, Higher Ed got $650 million in extra funding in the 2024-2025 biennium, and an additional $450 million in the 2026-2027 biennium.

As I previously wrote,

The most notable new program for this extra money in the Higher Ed Omnibus bill is perhaps the ‘North Star Promise’ — a new program that will pay the full cost of college for students whose household income is less than $80,000. The program is estimated to cost over $200 million in the next four years.

That’s not all, however. To combat declining enrollment, the legislature has decided to give Minnesota colleges $150 million of their money to freeze tuition. Native Americans — who already get scholarships — will also get free college. There are also hundreds of millions for the Minnesota State College system and other millions in one-time support payments to colleges.

In the Higher Ed budget passed this year, the University of Minnesota got $1.15 billion from the state. This is a $125 million increase from what the U of M got in the 2022-23 biennium. Yet despite this record infusion of cash, the U of M is still asking for more money from the state. At a hearing held on 30 October, officials at the U of M said they are seeking supplemental funding of $45 million from the state in the 2025 Fiscal Year.

The U of M is seeking more money

Speaking at a House Higher Education Finance and Policy Committee Hearing, the officials explained that, among other things, the extra money will be used to:

  1. limit tuition increases for students;
  2. retain talent through increased compensation for faculty and staff;
  3. invest in more student services, such as counseling, advising, and academic support;
  4. maintain classrooms and instructional spaces;
  5. support research and technology infrastructure; and
  6. preserve and maintain safe, functional, and accessible facilities.

To their credit, the officials presenting at the committee indicated that the U of M will undertake some cost-cutting actions in the long term. These actions could include eliminating some programs that are facing low demand.

But if the school is indeed taking enough action to become more efficient and self-sustaining, extra taxpayer funding should not be necessary, especially given how much taxpayers have already forked over to Higher Ed in this year’s legislative session. Declining college enrollment is a symptom that the cost of attaining a degree is too high compared to the benefits associated with it. It is a sign that colleges need to change how they operate if they are to stay in business. If the state keeps handing colleges more money, they won’t feel the pressure to do so, and that would be a waste of taxpayers’ money as John Phelan explains.

Like producers of any product, colleges need to ensure that they are allocating their resources efficiently so that taxpayers are not left to subsidize unproductive college majors.

At a time when employers are eliminating college degree requirements for jobs, further reducing the need for people to go to college, giving more money to the U of M would be a slap in the face to Minnesota taxpayers.