S & P worries lingering shutdown would hurt Minnesota public colleges
The University and Minnesota and the Minnesota State Colleges and Universities system will remain open if there's a shutdown, but Standard & Poor's Ratings Services is worried a lingering shutdown could have consequences for the state's two public higher ed institutions.
Here's the full statement from Standard and Poor's:
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CHICAGO (Standard&Poor's) June 23, 2011-- Due to the possible government shut down that would begin July 1, 2011, if Minnesota lawmakers do not pass a budget, Standard&Poor's Ratings Services is concerned about the potential impact to the state's public higher education sector. Although many of the state's institutions have considerable revenue diversity and generate revenues from research, student charges, and ancillary businesses, public universities also rely on state funding for operations. Any considerable delay in receipt of those funds could have negative financial consequences for the schools. Standard&Poor's has two public ratings for public university systems in Minnesota: University of Minnesota and Minnesota State Colleges and Universities (MnSCU).
Here's the email I received from U of M chief financial officer Richard Pfutzenreuter in regards to S&P's statement:
"We are painfully aware of the concerns of the rating agencies particularly if the shutdown lasts into the fall. We do report our financial position to them on a regular basis and are concern that our financial liquidity ratios could drop below the required levels if the shutdown lasts too long. We also are concerned about the length of any shutdown on our ability to issue new debt for current capital projects already in the pipeline on a timely basis."
And here's reaction from MnSCU spokesperson Melinda Voss:
"The recent bulletin released by Standard and Poor’s rating service recognizes the reliance placed by the Minnesota State Colleges and Universities on funding support from the state of Minnesota. We are aware that the governor and legislative leaders are working toward a resolution and hopeful that the state budget will be resolved soon. The Minnesota State Colleges and Universities will be in operation as normal after July 1 providing summer school instruction to 67,000 students."