Thursday, March 29, 2012

The Incredible Shrinking Capital Request

Yes, the administration does need to "Take Action" to restore trust in its use of public and private funds. The University is now at risk of losing the continuing goodwill and financial support of donors, state legislators, and the public at large.  This is the true cost of the compensation of "top talent" in the administration revealed in recent news reports and subjected to scathing comments by the editors and readers of the Star Tribune and the Pioneer Press.   See U Executives Paid Handsomely and The Gift That Keeps Giving.
The 2012 Capital Request submitted by the U of M administration requests $169.5 million in state bonds, including $90 million in HEAPR bonds for the renovation and repair of existing academic facilities.  Governor Dayton has proposed $78 million, including $20 million in HEAPR bonds.  The GOP chair of the House Capital Investment Committee has proposed $39 million, including $35 million in HEAPR bonds.  See the January 28, 2012 Star Tribune report  and the March 19, 2012 MPR report.  On Wednesday the Capital Invesment Committee in the state Senate passed its bonding bill with the same amounts as proposed in the GOP House bill.  See the March 29, 2012 report in the Star Tribune.
If there is any doubt that state legislators are upset with the actions and omissions of  the past and present leadership of the University, consider that the Senate bill awards $127 million in bonds to MnSCU, more than the $111 million proposed by the governor and far more than the amount awarded to the University.  "I have never seen such a low number for the University," remarked Sen. Sandra Pappas, the ranking minority member of the Higher Education Committee and a state legislator since 1984.  See the March 29, 2012 report in the Pioneer Press.
So far the current administration has failed to take any effective remedial action to restore confidence in its ability to be a prudent steward of the financial resources of the University.  Until it does so, it has little chance of convincing the governor or the state legislators to support the Capital Request of the University.  See the final paragraphs of The Cost of "Top Talent" Part II.     

Michael W. McNabb
University of Minnesota B.A. 1971; J.D. 1974
University of Minnesota Alumni Association life member

Added Later

The immediate response of President Kaler bemoans the "woefully inadequate" bonding bill and warns of "shifting even more of the financing burden to students."  See the March 29 Star Tribune report
The state legislators and the general public were outraged by the news reports of extravagant compensation awarded to senior administrators at a time of skyrocketing tuition.  Actions are necessary to restore trust in the management of the financial resources of the University before the legislature will be willing to approve a larger bonding bill.
Yet the president does not request the departing senior administrators to relinquish their "transitional" compensation or their golden parachutes.  Nor does he offer to set an example by relinquishing his right to receive $610,000 in "transitional" compensation when he leaves office.
The president speaks of a "change of culture" and asks to be judged on his actions.  See Kaler Repeats Plea. But his warning to students (and their parents) simply follows the declaration of the Bruininks administration that "tuition is the revenue stream with the highest potential for significant, long term growth."   See section 4 in Going To Market Part II.  His words will fall on deaf ears at the legislature until his actions show a change of course.  See Course Correction in Higher Education.
Michael W. McNabb

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