Minnesota State official makes case for more funding

MARSHALL — Minnesota State Chancellor Devinder Malhotra is a man on a mission — and it’s a colossal mission because he represents the 375,000 students who are served annually through the 30 colleges and seven universities that make up Minnesota State.

Recently, Malhotra visited 10 different communities across the state — completing a 930-mile tour in three days — to advocate for a biennial budget request that he said is not only critical to the Minnesota State institutions but to the economic and societal vitality of the state as well.

Southwest Minnesota State University in Marshall and Minnesota West Community and Technical College Canby campus were among the chancellor’s stops.

“As we drive around the state, you can’t help but notice all the ‘Help Wanted’ signs, and given those current and impending shortages of workforce and talent, we know that there is a lot at stake for the state and a lot at stake as it relates to our work,” Malhotra said. “In some ways, we’re the biggest partner the state has in providing Minnesota the talent it needs to flourish, both socially and economically.”

Minnesota State’s legislative request includes $31 million for operating and technology investments and about $240 million in capital bonding.

“We’re not asking for any grandiose purposes or getting brand new toys or buildings,” Malhotra said. “We’re just trying to keep the light on and be able to mount the educational experience where we can prepare our students for the workforce in today’s knowledge-based economy — so they can go back and work and live in their communities and help them prosper.”

Nearly 40,000 students graduate annually through Minnesota State. Even more impactful is the fact that 87 percent of those students stay in Minnesota.

“We are interrelated with the community,” Southwest Minnesota State University President Connie Gores said. “We depend on each other.”

SMSU has roughly $4.8 million at stake in the legislative requests.

“Leaders like President Gores have had to make tough choices,” Malhotra said. “They’ve had difficult challenges and very difficult conversations, and they’re doing it with a laser-focus on student success. They’re doing it because, as we deal with these budgetary challenges, we don’t want to shortchange our students in any way, shape or form.”

Malhotra said the diversity of the student body at the Minnesota State institutions is considered one of its greatest assets. Of the 375,000 students served annually, more than 63,000 are students of color or American Indian students, 84,000 are low-income students, 48,500 are first-generation students and 10,000 are veterans or service members.

“If you look at the scope and size, it brings home the complexity of our work, but it also brings home the kind of impact we can have in our state,” he said.

Gores said the 50th anniversary commencement exercises on Saturday — in which 646 graduates were eligible to participate — was a prime example of SMSU’s partnership with the community and state.

“We prepare them so that when they walk across that stage at commencement, they’re ready to go — get jobs, go to graduate school or whatever,” she said. “And we’re proud of the fact that at SMSU for the last several years, 99 percent of our students are employed or in graduate school within 6 months of graduating. And of those, 97 percent are in the field of their study. It’s remarkable.”

THE FINANCIAL REQUEST

Minnesota State is requesting $10 million in supplemental support for operating budgets throughout the system.

“Basically, that $10 million is meant to cover some of the structural deficits which our colleges and universities are facing, including Southwest Minnesota State and Minnesota West,” Malhotra said. “When they gave us allocation in the last biennium, they front-loaded the allocation. In other words, 55 percent of the allocation was in the first year and 45 percent was in the second year. So in the second year, we have a huge structural deficit between our revenues and our expenses. This $10 million will go a long ways in closing that gap. It will not eliminate the gap, but it will help close it.”

The second part of the request is in the bonding bill and is two-pronged. The first is a Higher Education Asset Preservation and Replacement (HEAPR) request for $130 million. The second part is $94.5 million for 15 bonding projects.

“Asset preservation is basically a fancy name for repair and maintenance,” Malhotra said. “If you walk around our campuses, many of our buildings are in a heightened state of disrepair. Deferred maintenance has accumulated over the last few years.”

Malhotra said deferred maintenance is currently about $950 million and will continue to increase without significant funding in the near future.

“These disinvestments in higher education have started taking a toll and if we don’t get any additional funds over the next 10 years, this deferred maintenance could balloon up to $2 billion,” he said. “So this $130 million is really a request to make a little dent in that deferred maintenance. It’s our number one priority.”

The third part of the legislative request is $21 million to fund NextGen, which would serve as the central technology system for the 37 Minnesota State colleges and universities.

“It’s to update our antiquated technology and infrastructure — our record-keeping system,” Malhotra said. “Just to give you a sense, it’s 20 years old and it’s operating instructions are in COBOL (common business-oriented language) language — language that is now bordering on extinction if it is not already declared extinct.”

Malhotra said the centralized enterprise system is not only severely outdated, but it has also become very costly to maintain.

“Breakdowns are much more frequent,” he said. “We have to keep patching it so we can keep it functional. It has reached the point where it is, perhaps in the long haul, cheaper to replace than repair.”

IMPLICATIONS FOR SMSU

While SMSU’s 50th anniversary has been a time for celebration, it is also a reminder of how old many of the buildings on campus are. President Gores said HEAPR funding is especially critical.

“We’re in our 50th year of providing this high-quality experience for our students, but our buildings are also 50 years old,” Gores said. “We have over $30 million of deferred maintenance at SMSU. We see it in our pool deck for our pool. We see it in all our curtain walls — we have these links that connect all our buildings and several of them are in severe states of disrepair. There are leaky windows and rusted out panels along the floor. We repair some of it with black duct tape.”

Of the $130 million Minnesota State is requesting for asset preservation, roughly $4.5 million would be committed to SMSU. Along with the pool deck replacement cost of $1,196,836, the replacement of four different link curtain walls make up the bulk of the amount.

“We do a good job of taking care of our buildings — it’s always clean and it looks good — but when you look closer, you notice we need some work done,” Gores said. “When you walk through the links, it’s colder. And in the summertime, we have grass or plants growing up in the base of some of our floors because they’re at ground level. So those are some of the things we’d do if we get the HEAPR money.”

In terms of the supplemental funds, SMSU share of the $10 million Minnesota State is requesting would be around $300,000 for this next year.

“That would really go a long way to helping us meet our budget challenges in terms of providing the programs, opportunities, classes and keeping the lights on for our faculty, staff and students.”

ENROLLMENT, INFLATION AND TUITION

While student enrollment is declining statewide, Malhotra said the need for higher education funding is still as strong as ever.

“Our colleges and universities have already made adjustments or are in the process for making adjustments for declining enrollment,” he said. “And I think they’ve done an excellent job in meeting those budgetary challenges. If you look at since 2009, our system as a whole has declined by about 8 percent. But during the same time period, we have reduced our workforce by 7.3 percent.”

Malhotra said Minnesota State is asking the state to help “keep the lights on so that we’re able to pay the workers and employees we currently have and to have our buildings in a state where we can provide adequate learning spaces for our students so we can mount the kind of educational experience our students need and deserve.”

Malhotra said in the past six years, college tuition has been flat and that there has only been two years worth of tuition increases at the universities.

“So on average, tuition at the universities has gone up a little over 1 percent, which is well below even the low inflation rate,” Malhotra said. “But our cost, particularly our compensation cost — where 70-80 percent of our budgets are tied — is increasing much faster than the rate of inflation, which causes to some extent, the structural deficits which have emerged.”

According to Malhotra, raising tuition is not an option.

“One reason is because in the second year of the biennium, the Legislature has mandated that your tuition be frozen,” he said. “The second part is because access is a very strong component of our mission. In fact, our mission and goals are anchored in providing access in an affordable manner.”

Oftentimes, access is made possible because tuition rates are low in the Minnesota State system — an average of $5,000 a year at the colleges and an average of about $8,000 at the universities.

“Even though those rates are low, for the kind of students who come to our institutions — the first-generation students, the low-income students, students from rural areas — they are coming from economically-fragile communities and economically-fragile families, so their ability to weather any additional increase in tuition is very, very limited,” Malhotra said. “So if we think of raising tuition, it is at the expense of enhancing access. The only option then is to go to the state and ask for those additional appropriations.”

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