U of M considers budget cuts due to COVID-19 pandemic

University officials' worst-case scenario includes reduced operations in the fall

A woman speaks at a podium in front of maroon and gold balloons.
University of Minnesota President Joan Gabel gives her inaugural address in September 2019. Amid the COVID-19 pandemic, Gabel announced a possible tuition freeze, one full week of unpaid work for approximately 200 of the university’s senior leaders, and her own temporary 10 percent pay cut starting July 1.
Andy Kosier | MPR News file

Students attending Minnesota’s largest university system won’t be returning to school in person for the rest of this semester. Student life on the five campuses of the University of Minnesota is all online now. And that’s true for the university’s leadership, too.

At a special Board of Regents virtual meeting Tuesday, President Joan Gabel laid out the U’s options during what many describe as an unprecedented time.

“It’s actually not entirely unprecedented. I’ve actually forbidden my staff from using that word. I think we are over it.”

Gabel said the 1918 influenza epidemic ”brought a lot of new elements of uncertainty to our university and community, and at the time, we had to postpone class opening.”

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The pandemic may leave lasting marks on many institutions already facing challenges. For higher education, that means coming to terms with how to rein in costs in the face of ever-increasing student debt.

The regents and Gabel are looking for places to cut in the next fiscal year budget while still offering some relief for students and families reeling from loss of income. Among the first steps, Gabel announced a possible tuition freeze, one full week of unpaid work for approximately 200 of the university’s senior leaders, and her own temporary 10 percent pay cut starting July 1.

Pay increases for nonunion employees also will likely freeze. Those actions are expected to save $40 to $50 million.

Several students sent a letter to the Board of Regents over the weekend asking for further prorated refunds dating back to the first day students were supposed to be back on campus from spring break. After some pressure, the board unanimously granted those refunds in areas like parking and housing, which students haven’t been able to use since.

Student senate member and senior James Farnsworth said even though he doesn’t always agree with leadership, the uncertainty around COVID-19 calls for everyone’s cooperation and a little grace.

”Knowing the administration is working harder than we can probably imagine making all of these hundreds of microlevel decisions and trying to navigate the institution but things like a tuition freeze really show a commitment to a student-centered approach,” Farnsworth said.

Gabel said she will ask units throughout the university to search for areas to cut in light of revenue loss because of the COVID-19 pandemic.

The University of Minnesota's operating budget for fiscal year 2020 is $4.2 billion. In the projected best-case scenario, if the effects of the pandemic ease after spring, the university projects losing $28 million in fees the board just agreed to refund.

”We have been challenged before, we’ve emerged stronger and we will do that again,” Gabel said. “This generation through these challenges has shown us what they are capable of, how deep they are able to dig, they have pulled together and we will continue to do so.”

The university has already decided that summer courses will be held online. University officials estimate a worst-case scenario would mean reduced operations continue through the beginning of the fall semester. Under that scenario, the university could lose more than $315 million.

The Board of Regents is expected to pass a final budget for the coming fiscal year early this summer.