Higher Ed Bill Passes Legislature - Sent to Gov. Walz

Late last night, the higher education budget bill was passed off of the House and Senate floors by wide margins shortly after being approved by the conference committee. The higher ed bill is the only agreed upon budget bill that was passed prior to the constitutional end of the 2019 session.

The higher education conference committee received a target of $150 million in new spending as part of the global budget deal reached late Sunday evening. Of the $150 million, $81.5 million is allocated to MinnState. The University of Minnesota received $43.5 million in additional resources and the State Grant got a boost of $18 million.

Here is a link to the full conference committee report.

Below is a summary of the investments for MinnState:

  • $64.5 million for campus support – this increase in campus support will be put into the campus allocation formula and distributed directly to campuses.

  • $8 million for the Next Gen/ISRS – this money will be used to overhaul the student records system. The request for this project was $37 million. There is some concern that campuses will be asked to help cover the shortfall to continue moving forward with the project.

  • $7 million for workforce development scholarships – (Sec. 40, page 50) this is a program designed to incentivize MinnState students to enter high-demand occupations upon graduation. The programs that are eligible include: advanced manufacturing, agriculture, health care services, information technology, early childhood, and transportation.

  • $1 million for workforce partnerships – these resources will be used to support local partnerships between MinnState campuses and local businesses, school districts, trade associations, local chambers, or economic development authorities.

  • $500,000 is included for textbook affordability programs – (Sec. 39, page 48) the programs funded in this provision include a Z-degree program at three colleges and an open educational resource program. The Z-degree will not impact the universities. It is a no-cost textbook program currently being used at Central Lakes College. The open educational resources program will provide opportunities for faculty to review, adapt, adopt, or develop open educational resources and be compensated for their work pursuant to the IFO contract.

  • $500,000 for leveraged equipment – this fund is used to purchase equipment used for instructional purposes and can only be accessed if non-state funds are used to match the state funding.

  • $250,000 for mental health services on college campuses – this new funding will be used to provide mental health services on five MinnState college campuses.

  • 3% Tuition Caps - the bill caps tuition at 3% both years of the biennium, netting an estimated $67 million in tuition revenue for campus budgets.  

Below is a summary of policy provisions that were included that impact MinnState:

  • MinnState administrative cost report - Language was included that requires the MinnState system office to develop a report that defines, categorizes, and accounts for administrative costs. The report is to identify measures taken to use innovation and cost efficiencies to lower administrative costs. The report is due to the Legislature by February 1, 2020.

  • Online tuition differential tuition freeze and report – the original Senate bill included language requiring MinnState to reduce all online course tuition to the cost of traditional classroom tuition levels. This would have reduced campuses budgets by $64 million over the next two years. We were successful in our efforts to have that language struck from the bill if the State was not willing to restore the lost revenue to our campuses. However, language was included that freezes online tuition differential rates for both years of the biennium, as well as requires a report due to the Legislature regarding online tuition differential, an analysis, and a plan to achieve parity related to tuition rates. The lost revenue of freezing online tuition differential is $2 million, systemwide.

Other items of interest funded in the bill:

  • $2 million for MNReconnect – a program that encourages students who completed college credits but did not earn a degree reenroll at a MinnState College. The program will be administered through the Office of Higher Education. This program currently exists but was funded through a grant from a philanthropic foundation.

  • $1.5 million for grants prospective teachers of color – these funds are used to attract and recruit more people of color to become educators.

Defeated proposals that would harm MinnState:

  • Pearson textbook mandate - the IFO succeeded in defeating misguided textbook policy that was proposed by Pearson as a way to boost their profits through forcing students to purchase subscriptions to their materials.

  • Unfunded online tuition reductions – our campuses would have been dealt a $64 million reduction in their budgets through the unfunded mandate for online tuition differential.

  • Unfunded tuition caps - we were able to defeat the unfunded tuition caps included in the Senate bill. Although caps remain, the level of State funding and the estimated level of tuition should be adequate to cover inflationary costs on our campuses.

Campus budget Outlook

The total revenue expected to be available to campuses will exceed the most recent State budgets. However, half of that new revenue will be derived from tuition increases. The IFO remains committed to pushing the State to restore the historic levels of funding that will reduce the cost burden on our students and shift it back to the State.  

Proposals headed into Conference Committee

Headed into conference committee, the House, Senate, and governor took different approaches to fund higher education for the next two years. Specifically, for Minnesota State, the Senate was proposing to appropriate $46.9 million, of which only $4 million was for campus support, $22 million was for Next Gen; $15 million was for workforce development scholarships, and $3 million would support the Board’s workforce request. The Senate bill also froze tuition at 2% both years at the universities, and 2% and 1% at the two-year colleges and reduced campus budgets by $64 million by requiring a cut in online tuition rates.

In comparison, the House bill proposed $159 million for Minnesota State. $149 million was intended to pay for a tuition freeze and support campuses, $10 million was to fund Next Gen. The governor proposed $65 million for campus support and $8 million for NextGen.

Other items still being considered 

This does not conclude the IFO’s work for the 2019 Legislative session. We are still working on funding the Public Employment Relations Board (PERB) and some outstanding pension issues. It is likely those items will be negotiated in the coming days and passed as part of a package of budget bills handled during a special session called by the governor later this week or next week.