Monday, May 21, 2012

The Incredible Shrinking Capital Request, Part II

In its 2012 Capital Request the U of M administration asked the legislature to authorize $169.5 million in state bonds, including $90 million in HEAPR bonds for the renovation and repair of existing academic facilities.  See the Capital Request. The bonding bill passed by the legislature limited the bonds for the University to $64 million, including $50 million in HEAPR bonds.  See the Financial Comparison.
This slashing of the Capital Request was a wound self-inflicted by the administration.  Questions about the fiscal management of the administration were first raised by the decision of President Kaler to create a one year fund raising position in which the former athletic director will collect $468,000 in total compensation.  See the February 4, 2012 Star Tribune report on Maturi's pay does not play well at Capitol.
Then the news reports that former President Bruininks had used the financial resources of the University to enrich departing senior administrators with $2.8 million in "transitional" compensation and golden parachutes ignited a public firestorm.  See U Executives Paid Handsomely and The Gift That Keeps Giving.
If there is any doubt that state legislators are upset with the actions of the past and present leadership of the University, consider that the bonding bill awards $132 million in bonds to MnSCU, more than twice the amount allocated to the University.  (In past bonding sessions the legislature awarded similar amounts to both institutions.)  See the May 11, 2012 Star Tribune report on the Bonding Bill.
On February 9, 2012 President Kaler informed the Higher Education Committee that the HEAPR needs are "well more than $500 million if not closer to $1 billion."  The academic infrastructure of the University is beginning to crumble around us.  See Another Fine Mess.
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.  See The Cost of "Top Talent" Part III.
In its budget session next year the legislature will allocate state appropriations for the University for the next biennium.  The legislature may once again punish the administration for its "top talent" arrogance if the Regents do nothing more now than tinker with the policy on "transitional" compensation.  Significant actions are necessary to restore public trust in the use of public and private funds by the U of M administration. 
The senior administrators and the Regents must begin the process of reforming the modern corporate university in which the values of Wall Street have replaced the ideals of public service.  They must change the culture that looked to "the market" to set the tone and direction of the University and eventually led to the excesses that provided the tinder for the firestorm.  See Course Correction in Higher Education.

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

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