At UMRA’s first in-person forum of 2023, held at Midland Hills Country Club in Roseville, members of the Retirees Association heard an excellent presentation by Mike Volna, the University associate vice president for finance and assistant chief financial officer. He spoke to us about the University’s FY2024–25 biennial operating budget request (to the Minnesota Legislature), FY2023 state capital request, and MPACT investment request related to the proposed Sanford Health and Fairview Health Services merger. Volna was a last-minute substitute for Vice President and Budget Director Julie Tonneson and provided a fact-filled and nuanced picture of the U’s finances. He was a great pinch hitter!

View the slides from UMRA’s March 2023 Forum with Associate Vice President for Finance and Assistant Chief Financial Officer Mike Volna.  

For context, Volna explained that the U’s budget and resources are about $4 billion annually. Approximately 15 percent ($622 million) comes from legislative appropriations and 25 percent ($1,050 million) from tuition. For many years, the amount of legislative appropriation has declined in relation to the U’s total budget; the income from tuition surpassed the state appropriation more than 10 years ago. This secular decline has caused the U to raise tuition, reallocate funds, and cut costs.

A unique year  

Volna said that based on the forecasts, the latest of which was released in March, this was a unique year because the state announced a large surplus of $17.5 billion. A significant amount of that is a structural increase of about $6 billion, and the remainder is in one-time funds. This large surplus set off a scramble for funding from almost every conceivable quarter.

The University submitted an amended biennial budget request in March which totaled $302.5 for the two-year period. The original request covered:

·      Core mission, $135 million

·      Minnesota Resident Scholarship, $60 million

·      Systemwide Safety and Security, $10 million

The amended request added:

·      American Indian Scholars Program, $9 million

·      Enrollment Driven Tuition Shortfall, $48 million

·      Resident Undergraduate Tuition Freeze, $27 million

Based on information from the legislative targets for higher education that occurred the day before the forum, it seemed possible that the University would receive somewhere around $192 million. This is an 11 percent increase in the appropriation, which is higher than the University has received in many years.

Volna then described the U’s capital request of $371 million, which is usually paid for in state bonds. The request includes money for higher education asset preservation and renewal, and five specific capital projects. (See the slides.)

Finally, he spoke about the University’s health care vision—MPACT 2025—and request for one-time funds to support that vision. The point of the vision is primarily to maintain a world-class academic health system for Minnesotans and University governance and control over University flagship facilities.

To support the maintenance of University control of its health care facilities, and of its faculty, the University has asked for $300 million to reacquire the assets that were transferred to Fairview in the mid 1990s. The transfer required Fairview to assume about $87.5 million in debt and costs; there was no payment by Fairview to the University. The current request also includes $650 million for post-acquisition financial and operational support.

Volna took questions throughout his presentation and, as is his manner, answered comprehensively and factually. Many more answers will come in the next two months from the Legislature. The legislature is required by the Minnesota Constitution to adjourn sine die on the first Monday after the third Saturday in May.

—Bill Donohue, UMRA Program Committee