Phantom Reduction

The Conjurer

"The Conjurer," painted by Hieronymus Bosch. The painting accurately displays a performer doing the cups and balls routine, which has been practiced since Egyptian times. The shell game does have some origins in this old trick. The real trick of this painting is the pickpocket who is working for the conjurer. The pickpocket is robbing the spectator who is bent over. Source

The Phantom Reduction

It is now clear that President Kaler's promise to reduce the cost of administration by $90 million (over six years) will not produce any reduction in the U of M budget. The president intends instead to simply spend the $90 million on "mission and mission support." See his remarks to the faculty at p. 8 of the September 26, 2013 FCC report.

So instead of making a decision to even slightly trim the $3 billion U of M annual budget the administration will quite literally continue to pass the buck to beleagued students (and their parents) and to the citizens of our state.

Moreover, there is no easy way to monitor whether the administration will even fulfill its promise to reduce spending on itself. (And over six long years who will even remember the promise?) The administration should be required to provide the base line of the current cost of administration and to then provide annual reports to verify the specific expenditures that have been reduced. 

There were variations in the level of state appropriations in the 2002--2012 time period. When state appropriations declined, the administration increased tuition (by far more than the reduction in appropriations). When state appropriations increased, the administration still increased tuition. The total cost of operations at the U of M soared from $2 billion per year to $3 billion per year as tuition skyrocketed. See Whose Fault--Crushing Student Debt. The administration accepted the current two year tuition freeze (limited to undergraduate tuition for Minnesota residents) only on the condition that the state increase appropriations. 

The total cost of administration now consumes $850 million per year or 28% of the cost of operations. See On The Cost of Administration Part III. This demonstrates a long term failure on the part of the administration to exercise any restraint on spending on itself. 

This also demonstrates a long term failure on the part of the Regents to exercise any effective oversight. The Regents are part-time volunteers who rely on the administration to provide information for their decisions. The chair of the House higher education committee recently referred to the Regents as "the House of Lords--they have nice titles, a nice place to meet and don't do anything." See the April 15, 2013 MinnPost report.

Like real estate developers, such as the current owner of the Minnesota Vikings, the U of M leaders spend other people's money (OPM in real estate terminology). See Other People's Money. The highly paid senior administrators and the Regents are so far removed from the economic lives of students and their parents and the public at large that they are seemingly oblivious to the financial hardship that results from their decisions to spend other people's money. 

In the absence of any self-restraint on spending by the U of M administration it may be necessary for the state legislature to begin marking most of the state appropriations as special appropriations in which it designates the specific uses for the funds. 

Each biennium the citizens of our state now invest more than $1 billion in the U of M in general appropriations. With that much at stake the legislature should appoint a qualified person to monitor on a continuing basis the operations of the University and its use of state appropriations. This legislative liaison (or watchdog) should have the responsibility to review the information produced by senior administrators, to collect additional information through his or her own independent research, and to meet with all groups at the University so that the perpectives of other well-informed and thoughtful members of the University community are presented to the legislature.

Michael W. McNabb

University of Minnesota B.A. 1971; J.D. 1974

University of Minnesota Alumni Association life member