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Maki Reveals Legislature’s Issues with Budget Crisis

Sara Lee | Staff Writer | 03/23/2011

More recalibration updates were presented to students and faculty by Bill Maki, Vice President for Finance and Administration, on March 17.
Maki discussed BSU’s current budget status, as well as the effects state legislature has on the University deficit. As of now, Minnesota’s projected budget is currently a billion dollars less than the expected $6 billion.
“It had been a $5 billion deficit in February 2010. So, it basically went from $5 billion in 2010, up a billion point two, and back down to $5 billion. It’s really odd how the $5 billion seemed like good news,” stated Maki.
Maki tried to put the situation in perspective. “Part of the budget issue in a sense is that the State doesn’t have enough revenue. It isn’t so much an expense issue,” he explained.
In his presentation, Maki went on to say that Gov. Dayton’s plan is to create about $4 billion of tax revenue and $1 billion from reduced spending.
“The governor’s budget for higher education is very friendly to us in that he has requested a 6 percent reduction for MnSCU [Minnesota State Colleges and Universities] and the U of M, and the scenarios that we had been planning on had been from 11.5-15 percent. So, that is a much rosier picture,” said Maki.
According to Dayton’s budget plan, which is very different than a majority of the legislature’s, Maki said that the raising of revenue is “based on a high level of tax increases.” Dayton’s plan is to create revenue by 4 billion in tax dollars and the rest in reductions. Maki added that the governor is trying to solve a major issue “with a legislature that has been very outwardly spoken that they’re not interested [in Dayton’s plan].”
The other up-in-the-air issue is state grants and work study for students. Pell grants may become obsolete in the midst of the state’s budget deficit.
“The governor has placed a priority on that, basically not cutting it, to continue state grants on the same level,” said Maki. “There will be a huge amount of pressure to reduce that as well, because there just isn’t a lot of places to go and get money.”
A lot of unknowns and variables are present still in the decision making process. Depending on Senate and House decisions, Minnesota revenue could come from more taxes and a few spending reductions, or it could come 100 percent from cuts. According to Maki, history shows that most of spending cuts have happened mostly in the first year. Then, the following year those cuts stay the same and very few other cuts are made.
Sen. John Carlson (District 4, Bemidji’s representative) suggested a bill that would freeze tuition rates. In effect, this freeze would allow students that come to BSU with a certain tuition rate to pay that same rate during their entire enrollment, without an increase.
“All these bills right now, have been in review,” said Maki. “We don’t know what the outcome will be. We have a sense that some kind of tuition cap will come out of that.”
Other happenings in congress could have huge impacts on low- and middle-income students. Federal Pell Grants could potentially be on the chopping block, and students who had been eligible for those grants would presumably have to take out more loans to pay for school.
Although BSU has the highest tuition of the other six State Universities, administration from those universities (Southwest, Moorhead, St. Cloud, Metropolitan, Mankato and Winona) have looked at BSU and wished they had significantly increased their tuition rates as Bemidji did about 5 years ago.
“At this point, our budget will be balanced for 2012 and 2013,” said Maki. “Obviously there’s a lot that need to happen, but I know there’s concern about ‘will there be more [cuts]?’ At this point, the hope is that there is not.”