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Minnesota State Colleges and Universities could face financial 'crisis,' report says

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ST. PAUL, Minn. (KTTC) -

A new report says the Minnesota State Colleges and Universities system could face a shortfall of "truly crisis proportions" if changes aren't made.

Chancellor Steven Rosenstone had requested a work group to conduct the long-term financial sustainability report.

The report, which took eight months to complete, predicts that the system "can expect to have a structural funding gap of between $66 million and $475 million by the year 2025."

"I don't know I would say it was a surprise. I think our board, the president, the chancellor, the folks on campus have been struggling with this challenge for several years," said Phillip Davis, an associate vice chancellor who co-chaired the work group. "The sooner we act, the better, because this problem only grows in significance the longer we wait."

The system -- formerly known as MnSCU (now re-branded as Minnesota State) -- gets most of its funding from the state and from student tuition. But it hasn't been enough.

"Over the last several decades, funding appropriations from the state – historically the system’s most important source of revenue – have been in decline," the report says. "The Minnesota legislature has passed legislation in the last several years directing the Board of Trustees to freeze tuition, a second major source of operating revenue for the system. These facts, together with flat or declining enrollments, have produced a clearly unsustainable financial operating model."

To avert a financial crisis, the report offers recommendations.

"The one large category is to improve students' success, to improve our performance. Not so much students' performance -- although that is the outcome -- but the performance of our colleges and universities in helping students achieve success," said Davis."The second area is to think about how we organize ourselves to support students, and that's really the structural organizational component."

To read the full report, including recommendations, CLICK HERE.

To make matters worse, the system had requested $21 million for its operating budget from the state, but has gotten just $570,000 thus far. For the rest of the funding to pass, a special legislative session is needed.

Riverland Community College would have received $404,000 from the $21 million, said Chief Financial Officer Brad Doss. Instead, the school has only received about $11,000 (from the $570,000).  

Riverland is already planning to cut courses as a result. The school also plans to reduce its non-salary budget by about $200,000, Doss said.

Chancellor Rosenstone will review the financial sustainability report, and expects to have final recommendations for the system trustees by October.

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