MINNEAPOLIS The University of Minnesota’s Board of Regents voted 10-1 Tuesday, June 29, in favor of President Joan Gabel’s proposed $4 billion budget, which calls for a 1.5% tuition increase for 2022 and a 1.5% employee salary increase.

Tuition on the Twin Cities campus would increase to $13,532 — up $202 — next school year; and $32,096 — up $480 — for nonresidents.

The 1.5% salary increase for all university employees is pending labor negotiations and employee performance evaluations, said university Budget Director Julie Tonneson.

$38M in state appropriation

The university will receive approximately $19 million in state funding for 2022, $3.5 million of which will be held for 2023, and $19 million for 2023, totaling to $38 million. This is about 82 percent of what the university requested.

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At the meeting Tuesday, the board unanimously voted to approve a resolution for issuing debt for operating purposes. The university anticipates taking a $35 million to $40 million loan for athletics, and officials foresee the athletics department generating revenue to pay the loan back over several years, said Myron Frans, senior vice president of finance and operations.

The loan will be capped at $50 million, and all future requests that extend past the ceiling will be brought to the board for approval, Frans said.

In 2022, the university expects to bring in $13.6 million in tuition, $15.5 million in state appropriations, $49.6 million in internal reallocation and $9.8 million in other resources, totaling $88.5 million.

The university plans to spend $87.7 million — in addition to their regular expenditure — in 2022, which includes MPact 2025 strategic planning, tuition impacts from 2021, an increase in employee salaries, and facility/technology costs.

Regents vote to support budget

“I look at this budget, you know, considering all the consequences and all this taking place during this last year and a half, I see the budget as being very reasonable and very responsible, Regent Steve Sviggum said. “We would all like to have a reduced tuition in a world that was not real.”

An increase in state and federal grants should cover the increase in tuition for low-income students, Sviggum said.

While Regent Mike Kenyanya said he did not like the idea of the tuition increase, he said that the conversation around tuition in terms of competitors and students with reciprocity is outside the scope of the budget meeting. Kenyanya approved of the 1.5% employee salary increase, saying that it could potentially help retain employees and save money down the road on recruitment.

During the meeting, Regent Darrin Rosha proposed an amendment, suggesting that instead of increasing tuition, the university could use funds allocated toward strategic initiatives.

“The cost of attendance is a real issue for many, many people,” Rosha said. “This has a real impact on real people, and I believe that we are out of alignment.”

The amendment failed and Rosha was the lone vote against the budget.

'A balancing act'

Regent James Farnsworth said the board should be committed to “centering the values of opportunity, access and affordability,” especially coming out of a pandemic. He also said that the $36.1 million investment in MPact 2025 is essential to the university.

Regent Mary Davenport echoed Farnsworth’s sentiment on strategic planning, saying that strategic planning “is necessary to keep our university forward moving.”

Regent Douglas Huebsch supported the budget proposal and said that he doesn’t want to cut the strategic initiative money because “that’s what’s going to get us to the future.”

“I wish that the tuition increase was a little lower, and frankly, I wish that the salary increase was a little higher. But given where we are, I do think that this is a balancing act and I think that this threads the needle,” Regent Ken Powell said.

Regent Janie Mayeron said she supported the budget proposal and said that she believes the decision to increase tuition as part of the budget has taken the pandemic, competing institutions, and university spending into account.

“I think that President Gabel and her team have demonstrated and picked up where President (Eric) Kaler left off and taken several steps further, this holistic and systemic dialogue about tuition and enrollment strategy more broadly,” Regent David McMillan said. “I can support the one and a half percent, but I don’t do so in a vacuum.”