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Friday, December 4, 2020

State budget forecast and the implications for the U and CLA

 Minnesota Management and Budget, the state budget office, released updated state budget projections earlier this week. Their revised projections were favorable. Previously, the office had forecast a state budget deficit for the current year, Fiscal Year 2021. With the revision, the projection is now for a surplus for this fiscal year. This change doesn’t directly affect the University’s current budget, but it does reduce if not eliminate any requirement from the state for agencies and universities to find savings to plug a budget hole. 

The University, as President Gabel recently shared, does have a projected FY21 deficit of $150-175 million, spread across all units and campuses and including areas such as athletics, dining, and housing in addition to the academic enterprise. At next week’s meeting, the Board of Regents will discuss the tools available to address that shortfall. 

Regarding the next biennium, Fiscal Years 2022 and 2023 (July 1, 2021-June 30, 2023), the state budget office’s revised estimates project a state budget deficit of $1.3 billion. That is not as large as the office’s earlier estimate in May, but it is significant. We have to anticipate that a state deficit of that size will have implications for the University’s level of budget support from the state over the upcoming two years. 

CLA’s Chief Financial Officer, Brent Gustafson, talked about the college and University budgets at the November Administrative Insights Meeting. In his presentation, Brent provided an overview of the current budget challenges, the steps taken to date, and the budget reduction scenarios going forward as part of the annual campus-level Compact process. Although the meeting was held prior to the revised state budget estimates, the general outline in the slides still applies for FYs 22-23. You might also want to check the slides from the meeting of college administrative offices and department chairs and administrators earlier this week, which provide updates on the budget, faculty and staff reviews, and curricular planning for academic year 2021-22

Our mission as a college is not to balance budgets. We must, however, balance the budget to pursue our mission. That mission has far-reaching impact and is accomplished at high levels. I encourage you to check out the recently released Roadmap Progress Report 2020. The report is shared with our college alumni, donors, and friends, and provides highlights of some of the good work occurring in the college across the several domains of our mission, the progress on Roadmap priorities, and profiles of CLA students, faculty, and staff. Every one of you plays a role and has some ownership in making the good work described in the Progress Report happen. Thank you.