Increased enrollment, a 1 percent tuition hike and cost-cutting measures have helped the University of Minnesota Duluth battle a stubborn budget deficit in recent months, but the campus is still falling further into the red over the long haul.
In a letter to faculty and staff on Thursday, UMD Chancellor Lendley Black said the campus budget shortfall will be $3.2 million during the current school year, raising the campus' long-term deficit to nearly $11 million by June.
That $3.2 million is down from a $4 million shortfall the previous year, and an annual deficit that had been as high as $9.4 million in recent years. But the shortfalls each year continue to add up.
While there's more money coming in from some sources, merit pay increases for staff and higher cost of employee benefits have gobbled that up.
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"Increased costs have kept us from making as much progress on the deficit as we anticipated," Black wrote to his colleagues.
"This leaves us in a difficult situation and I'm sure that it is as frustrating for you, as it is for me, to not see more progress being made,'' Black added. "We will continue to be advocates for UMD, ask tough questions, drive innovative solutions and work to ensure as minimal negative impact on our students as possible."
Black told the News Tribune Thursday that it may take several months to develop a long-term plan deciding which programs might be impacted. He said the goal is to have minimal direct impact on students. Black said faculty and staff will "collaborate" on the budget balancing plan. Any cuts, whatever programs they impact, won't take effect until the 2019 fiscal year that starts next July.
Black said the University system is allowing UMD to repay the $11 million debt over time, cushioning the blow.
"They are backstopping us on this," he said.
The $3.2 million shortfall is about 2.2 percent of UMD's $147 million annual operating budget.
There was some good news in the chancellor's letter. Black said special, targeted money from the University system will help fund two additional mental health counselors "to provide critical support for our students." UMD also received designated money to move ahead with renovations and enhancements to its Sports and Health Center starting during spring break in March.
Total enrollment at UMD is estimated to hit 11,150 this academic year, up 1.2 percent from 11,018 students last year.
