Editor Note - This story was updated with corrections on Oct. 18 2013. The Statesman regrets the error.
As the talk about which UMD programs should be cut heats up, the Statesman delved deeper into the inner workings of the budget to help frame the discussion.
There are two primary funding sources for all UMD programs. The first is tuition and state allocated funds, and the second is unit generated revenues, mostly comprised of student fees and revenues from operations like the Dining Center and bookstore.
Tuition and state-sponsored money combine to pay for the bulk of UMD’s academic programs. When administration speaks of “the budget,” they are typically referring to funds coming from tuition and the state.
State money is allocated to UMD by the UMN system, and UMD does not get to decide how much it will receive. "(The budget) is not really that negotiable," said Vice Chancellor for Academic Affairs Andrea Schokker.
UMD's budget allocation is set in stone one year in advance.
"(UMD’s budget allocation) is determined by a formula which is essentially equal to tuition that (we) bring in plus the state money we get," Schokker said. "Before we know (either), we have to make a budget."
Tuition revenues are merely projections, so UMD must estimate what its enrollment will be a year ahead of time.
Forcing UMD to estimate future enrollment can put finances in a bind. If enrollment ends up being below the estimate, there will be a deficit, since tuition will be lower than anticipated. UMN does not allocate more state money to UMD to cover shortfalls in tuition, so UMD's budget is highly sensitive to fluctuations in enrollment.
"The more tuition money you get, the less money you get for free,” Schokker explained, referring to state-sponsored money.
UMD's enrollment has been declining for the last few years, and the Twin Cities campus typically demands enrollment estimates to increase, so this formula makes for constant shortfalls since enrollment will almost always be less than expected.
Organizationally, UMN’s budget is broken into over fifty “cost units.” Each cost unit is analyzed as a separate entity and is responsible for creating its own budget. "(The satellite campuses) each count as one cost unit," Schokker said. "And all of the colleges in the Twin Cities (campus) are each their own unit. So Chancellor Black … is at the same level as the dean of the smallest college at the Twin Cities campus."
UMD's classification as a single cost unit is primarily because the Twin Cities campus is larger. But the organizational structure was created at a time when UMD was much smaller than it is today.
Schokker thinks this outdated organizational structure hurts UMD.
"If we had our … academics separated from everything else, as two cost units, that would benefit us," Schokker said. Dilemmas arise when certain colleges at UMD do poorly while others are booming, making it seem like UMD is doing fine overall. In the Twin Cities, however, if one college is doing poorly, it can ask for and receive help individually, since each college is its own cost unit
Part of Program Prioritization’s purpose is to determine how much UMD needs to draw from the state funds in order to balance the budget.
"We did Program Prioritization, (showing) what we think we can cover of our deficit, and we're going to ask (the Twin Cities) to help us cover what (we can't)," Schokker said
Program Prioritization is primarily aimed at academic programs, though the system will examine the merits of every student organization as well. However, some Student Life programs, such as intramural sports, may not be jeopardy because they are funded by unit generated revenues.
Unit generated revenues come from room and board charges, parking passes, sales from the Dining Center and bookstore, and student service fees. (CORRECTION: A previous version of this story didn't clarify that these programs could possibly still be cut through Program Prioritization.)
"Most of the areas of Student Life are funded in auxiliaries (Unit Generated Revenues) and in student service fees," said Vice Chancellor for Student Life Lisa Erwin. (CORRECTION: A previous version of this story didn't have Lisa Erwin's complete quote.)
"Student service fees are decided by a committee," Erwin said. "(The committee) hears proposals every year for funding, makes a recommendation to the chancellor, makes a recommendation to the president, and the Board of Regents approves (the recommendations)."
UMD mirrors the recent trend of “administrative bloat,” a phenomenon where administrative positions have grown faster than academic ones. Schokker thinks this is partly due to administrator responsibilities expanding over the past few decades.
"Over time what's happened (is) the faculty who are trying to get tenure have to publish more; there are bigger classes to teach," Schokker said. "I'm a faculty member too," she added. "And there are places where there really is administrative bloat, (but) I think there is very little (at UMD), to be quite frank."
"I have a hard time finding any (administrative positions) in our area that are extraneous because we've already cut it so many times, but there probably is," Schokker said.
BY JOHN FAHNENSTIEL
fahne006@d.umn.edu