Dear Colleagues:
I hope you had a Happy New Year, and I wish you the best for an
outstanding spring semester. As we enter the second half of this
academic year, I wish to give you an update and review of the status of
UMD’s budget and strategies for moving forward.
From 2001 to 2011, UMD’s undergraduate and graduate enrollment grew by
1,876 students. During this time of student growth, the undergraduate
resident tuition rate also increased significantly from $5,070 to
$11,322 for fall and spring semesters combined. However, UMD’s base
operating budget did not grow substantially, and UMD became
over-dependent on tuition revenues to fund basic operating expenses.
Our enrollment declined in Fiscal Years 2012 and 2013 occurred on the
heels of cuts in state funding for all University of Minnesota
campuses. As a result of these declines in both state and tuition
revenues, coupled with required expenses which were out of our control,
we had a structural imbalance of $9.4 million by the end of Fiscal Year
2014.
That $9.4 million structural imbalance has been reduced to an estimated
$3.9 million projected for the end of Fiscal Year 2019 (June 30,
2019). This drastic reduction is the result of several actions taken at
UMD and assistance from the University of Minnesota leadership in the
Twin Cities. First, UMD’s enrollment has rebounded over the past few
years, and we are working diligently to continue an incremental
enrollment increase over the next several years. This has provided much
needed increases in tuition revenues. In addition, we have cut
expenses and made difficult decisions, including reducing the numbers of
faculty, staff and administrative positions at UMD. Specifically, we
reduced our recurring expenses by $4.1 million Fiscal Years 2018 and
2019. These cuts are in addition to over $2 million in additional
personnel reductions made since Fiscal Year 2014. In addition, we have
benefited greatly from yearly assistance from the University of
Minnesota senior leadership, which has provided additional allocations
to UMD to help reduce the structural imbalance, increase funds for
facility renovations, and provide additional allocations for critical
initiatives.
UMD’s senior leadership is working with our colleagues in the Twin
Cities on a multi-year plan to resolve the structural imbalance within
the next few years. Although incremental enrollment increases help our
financial bottom line, we cannot solve this challenge with enrollment
increases alone. Our tuition is high compared to our major competitors,
and so tuition increases are not the answer either. Hence, we have had
productive discussions about a preliminary draft proposal to increase
our state allocations, as we continue to reduce expenses in a strategic
and thoughtful way. These discussions are ongoing, and I am optimistic
that we will find solutions that over time will place UMD in a stronger
financial position.
I am pleased that our faculty and staff are interested in these issues,
and I appreciate people’s passion and concern. However, it is not
helpful to unduly cast aspersions or make satirical criticisms against
the university leaders in the Twin Cities who are helping us.
As UMD’s Chancellor, I will continue to advocate strongly for
additional funding for UMD. I do that with a focus on collaboration and
on maximizing future opportunities, not on blaming others or focusing
on past issues. Structural imbalance simply refers to our budgeted
recurring expenses outpacing our budgeted revenues. However, UMD is
still paying its bills and we have substantial non-recurring funds that
carry forward from one fiscal year to the next. These carryforward
funds will not sustain us indefinitely, and so we need to resolve the
imbalance soon.
In spite of the budget challenges we face, UMD has continued to reach
new heights of excellence in the achievements of our students, faculty,
and staff. Budget challenges are a distraction and the reductions are
painful. However, we continue to move forward and adjust to changing
times. Our reputation is strong and our alumni and supporters are
breaking records in giving back to this incredible institution that has
had such a positive impact on their lives. Each of us helps tell the
UMD story by highlighting these successes and in turn promoting ongoing
investment in UMD from our alumni, donors, elected officials, and
University of Minnesota System leaders. I ask for your ongoing support
and assistance.
If you have questions about our budget, feel free to contact me our one of the vice chancellors.
Sincerely,
Lendley C. Black
Chancellor
