Minnesota Runs a Huge Budget Surplus Amid Higher Education Cuts

On December 5, government officials in Minnesota announced a projected budget surplus of more than $1 billion. Immediately, political fault lines emerged as Governor Tim Walz, a Democrat, and Republican legislative leaders weighed in on where the unexpected funds should go.

While Walz voiced caution, telling reporters that the money should essentially be socked away for posterity, House Minority Leader Kurt Daudt, a Republican, pounced on the possibility of redistributing the money through tax cuts.

“Today should be the last time anyone around the Capitol talks about raising taxes this session,” Daudt told the Minnesota Senate Republican caucus. Instead, he expressed hope about being able to send “tax relief” back to Minnesotans, courtesy of his fellow Republicans and their budgetary prowess. 

Daudt and other Republicans feel justified in pushing for tax refunds because Minnesota’s budget reserves, partially due to this unexpected surplus, now top $2 billion. These reserves will fluctuate in the months ahead, but can be used to pay for one-time expenditures in 2020.

The Republicans are putting forth a rosy narrative, in which President Donald Trump’s tax cuts and their own focus on a balanced budget are causing good fortune and extra cash to rain down on average citizens. 

But there’s another side to this story. 

Just days before the statewide budget surplus was announced, the University of Minnesota-Duluth notified staff and students that it would be slashing $5 million from its fiscal year 2020 budget. The cuts will come down hard, with around forty staffers, faculty members, and graduate assistants slated to lose their jobs.

So which version of reality is correct? Is Minnesota swimming in cash, thanks to the wise fiscal stewardship of the Republicans, or are the state’s public institutions struggling to survive?

The University of Minnesota-Duluth is the state university system’s second-largest school, serving more than 10,000 students. It boasts some impressive, localized programming, including a global Large Lakes Observatory (the only one in the United States) and a surfing class for those brave enough to ride the icy waves of Lake Superior.

It also has a small medical school with an outsized influence. In August, sixty-five Native American students—the most ever—started their medical school careers at Duluth. That’s noteworthy, but it makes sense given that the University of Minnesota-Duluth medical school focuses on two populations often overlooked by America’s profit-minded health care industry: Native Americans and rural residents.

For Scott Laderman, a history professor at Duluth and president of the school’s faculty union, the cuts tell an important story. In an October interview with Minnesota Public Radio host Cathy Wurzer, Laderman abandoned niceties and got to the heart of the matter.

“We do see this as part of a larger trend, with the privatization of public higher education,”  Laderman said, after Wurzer compared Minnesota to Wisconsin, where former Republican Governor Scott Walker’s fundamental lack of support for the state university system hobbled regional campuses.

The cost of attending the University of Minnesota has tripled since 2001, when Republican Tim Pawlenty became governor and ushered in a new era of austerity measures and tax cuts. (In 2009, Pawlenty told The Minneapolis Star-Tribune that he would have liked to chop more than his proposed $36.1 million from the University of Minnesota, but federally imposed limits wouldn’t allow this. He also proposed cutting $10.5 million in funding from Minnesota State Colleges and Universities.)

Is Minnesota swimming in cash, thanks to the wise fiscal stewardship of the Republicans, or are the state’s public institutions struggling to survive?

Left-leaning think-tank Demos dubbed this the “Great Cost Shift” in a 2014 report that documented how Minnesota, along with nearly every other state (except for North Dakota), has walked back its support for public higher education in recent years, just as a college degree became a must-have for all K-12 students. 

In the report’s introduction, Demos researchers made this salient point: “In less than a generation, our nation’s higher education system has become a debt-for-diploma system—more than seven out of ten college seniors now borrow to pay for college and graduate with an average debt of $29,400.” 

This represents a seismic shift for middle-class American families, of course, and helps explain why college debt and tuition costs have become a central 2020 campaign issues for Democratic candidates. 

For Minnesota residents including me, this is personal. My eldest daughter attends the University of Minnesota-Duluth, and my second-eldest will join her there in the fall of 2020. My eldest child is a nontraditional student. She is creative and bright, but needed a forgiving place to land after having a somewhat rocky high school experience.

She was welcomed at Duluth, and is now on track to attend medical school, with dreams of becoming a rural physician. She would like to stay in Duluth and attend the university’s medical school, so she can learn from the doctors and professors with expertise in providing medical care to underserved communities.

Will Duluth be there for her and all the other students who stand to benefit from it? Or will Minnesota’s budget surplus spur yet another round of glee-inducing tax refunds and revenue cuts?