Early budget indicates 'significant impact' for ND higher ed
GRAND FORKS—The governor's early budget guidelines could mean a higher education cut of more than $50 million, deepening reductions handed down last spring to the North Dakota University System.
Tammy Dolan, NDUS chief financial officer and a vice chancellor, said the 10 percent cut recommended Wednesday, April 18, by Gov. Doug Burgum "will have a significant impact" on the state's 11 colleges and universities.
"We've got a lot of analysis to do and we'll be meeting with (the Office of Management and Budget) to get our exact budget numbers that we're looking at," Dolan said. "What we're trying to focus on is that we're at the beginning of a long process, there will be a lot of discussion being had between OMB, the governor and the Legislature."
Dolan said she'd been waiting for the governor to suggest some level of reduction in his budgetary guidelines for the upcoming 2019-2021 biennium. Still, the CFO was "concerned" by the degree of Burgum's recommended cut, saying it was more than what she'd expected.
The consistency of funding cuts have led to difficult choices on campuses across the state. Leaders who tightened school belts over two consecutive years, consolidating programs and letting go of personnel, are now watching to see what comes through in the ledger.
University of North Dakota spokesman Peter Johnson emphasized the next budgetary process was only just beginning. Still, like Dolan, he'd been expecting the basic trend of the governor's guidelines.
"I don't get too shocked by much," Johnson said, "and it's been clear that the economy has not quite rebounded the way I think we all wish it would."
What isn't yet clear is the extent to which that will land on campus. But, for now, Johnson said UND will continue to do what's needed to put together an appropriate budget.
Beyond higher education, Burgum's guidelines have instructed smaller state agencies to plan for a 5 percent cut in ongoing expenses. Larger agencies, he said, should shoot for 10 percent.
Burgum also asked state offices to find an extra 3 percent "contingency" reduction to handle any unexpected revenue hits tied to hiccups in the state's major commodities in ag and oil.
The governor's suggestions don't include cuts to Medicaid and K-12 state school aid.
For higher education, Burgum said, campuses should work on budgets with a 10 percent reduction in the per-credit hour funding formula currently in place.
That formula accounts for all of the general fund dollars appropriated from the state to the NDUS, which went into the ongoing 2017-19 biennium with a $508 million general base. The 11 institutions in the system draw their revenue from a number of sources, including tuition, student fees and federal grants, but state dollars continue to be a major stream of funding.
From the start of the 2015-17 biennium to now, the NDUS has absorbed a reduction of approximately 18 percent in its appropriated general fund dollars. If the next round of cuts—which still have to go through plenty of handling by the governor, OMB and Legislature—are enacted as is, the system will have reduced its budget by about one-third over four years.
Don Morton, chair of the system's governing board, hadn't seen the governor's guidelines by Wednesday evening but spoke generally on the prospect of future cuts.
"As governor, Doug has to plan for the worst and hope for the best and that's probably what's going on," Morton said. "It's still early, and we can be cautiously optimistic that commodity prices and oil will turn around, but we have to be realistic also. ... This is the time to start thinking about budgets and, if we have to reduce, giving some thoughts on how to reduce. That's an ongoing process every year."