Why senator would cut 10 percent of MnSCU, U of M HQ costs

Today’s Senate higher-ed committee hearing on the bill by Sen. Jeremy Miller (R-Winona) that would cut central office spending by MnSCU and the U of M raised the question:

Would the bill improperly micromanage the institutions?

Miller, an accountant by trade, has proposed cutting the administrative spending at both institutions’ headquarters by 10 percent. Central office spending has grown more than spending on campuses, he said, and is second behind St. Cloud State in the amount of the budget it takes up.

He told the committee he has heard MnSCU officials testify that they’ve been able to cut spending by about 5 percent without hurting students. He said another 10 percent was manageable and would eliminate a lot of duplicated services — ones that many campuses already do for themselves:

“We’re not abolishing the whole thing, we’re talking about a 10 percent cut. We do have CFOs and project managers on the campuses.”

But MnSCU CFO Laura King painted a picture of a central office that’s already lean and aggressive in cutting. She said the chancellor’s office have reduced costs 22 percent since 2009, and maintains a balanced budget. MnSCU is among the lowest administrative spenders in the country, with administrative costs making up 2 percent of the budget.

She told committee members:

“We are, by some measures, dangerously lean in administration.”

About 4 percent of employees are administrators and managers, she said,

“…so it’s not like there are thousands of people sitting in a building somewhere making administrative salaries.”

MnSCU officials suggested that because items such as presidential salaries are already in contracts and paid for, mandating more cuts would force officials to make cuts in areas they’d normally leave alone.

A number of campuses rely on MnSCU for services such as legal help and capital project management. If they have to depend on themselves, critics of the bill said, mistakes could be costly.

Sen. Ron Latz (DFL-St. Louis Park) asked:

“What happens if we cut staff and tell campuses, ‘We can’t give legal advice on contracts.’ Our legal costs would go up exponentially. There’d be an increased burden on the attorney general’s office, and hiring outside counsel would be more expensive by far.” ,,, The first vendor contract that has a misplaced sentenced will cost an extra million dollars, and that wipes out the savings right there. There are broader system-wide questions that only the central office has expertise to understand.”

King said she worried that more cuts would stunt the progress that MnSCU has made on its system-wide technical services to students, which she said makes up about half of the chancellor’s office budget.

When asked where further cuts would come from, she said services that help the system handle labor contracts, grievances, the payroll process, manage bank relationships — “that would go next.”

  • Jrolson1

    Dear Sen. Miller: Come see us with your bill once you have successfully convinced enough of your other colleagues in the Minnesota Senate to cut your own collective budgets by 10 percent. Don’t dish out to others what you aren’t prepared to take on yourselves.

  • http://www.facebook.com/jamison.stepan Jamison Stepan

    As Ms. King states in the article, half of the MnSCU’s Office of the Chancellor’s budget is spent on Information Technology services. These are vital services to campuses that are delivered in a uniform way to all of our institutions, thereby giving the entire system a large cost savings. If each college was required to pay for their IT services, that are provided centrally, I would imagine it would require colleges to raise tuition to cover the additional expenses. That’s probably not a popular notion right now either.

    I understand the desire to want cut something that looks like frivolous bureaucracy, but when you consider the tremendous value that the OOC is able to deliver in regards to Information Technology it just doesn’t make sense to cut there. We’re supporting direct services to over 275,000 students all across the state, with the absolute bare minimum level of staffing. Without our centralized IT, many of our campuses (especially in more rural areas), simply wouldn’t be able to offer the services they do for students such as online learning, and higher education in Minnesota would suffer.