A new approach to budget planning during unprecedented times

Good morning,

For 175 years, the University of Minnesota has fueled progress, delivering academic excellence, groundbreaking research and an enduring impact for Minnesota, our nation and the world. We are proud of the strength and excellence of our mission, and we are deeply committed to preserving and amplifying that mission, not diminishing it.

Like colleges and universities all across the country, we face shifting enrollment trends, unpredictable state and federal funding, and rising costs. These issues are part of long-term sector trends that will continue for the foreseeable future. This is not a temporary change — this is an institutional inflection point that asks us to think about our work in new and bolder ways. The solutions must include our core value of providing an affordable, accessible education and our ongoing commitment to invest in the people who deliver that mission. By approaching these challenges with our values forthrightly and together, we have an opportunity to shape a vibrant, resilient future.

Prioritizing collaboration and resilience

Over the past few weeks, academic and administrative leaders across colleges, schools and campuses have come together to identify what is needed to align and position our university for continued excellence and impact in this environment. Rethinking our budget planning process is one key step in this broader work. We have heard a clear desire from faculty and staff for more engagement, understanding and input into the budget planning process. We are responding to that input with opportunities to be more collaborative, strategic and proactive to address these challenges and invest in our collective future. We are committed to deeply engaging across our community, including shared governance, so we emerge a stronger, more resilient university.

While we have already engaged in difficult scope and budget reduction strategies in recent years, we need to do more to secure our future in the face of ongoing headwinds and operating expenses that outpace operating revenues across our university. This next phase requires deliberate choices about how to reduce expenses and redundancy while we simplify and focus how we work across both our administrative and academic portfolios. This work will complement that of our strategic roadmap. Chancellors, deans and unit leaders will continue to guide deliberations and recommendations that impact their units with input and consultation from their stakeholders and shared governance. This next phase of work will require us to collaborate across schools and colleges and lean into the efficiencies that come with being a five-campus system. Long-term solutions will not be found alone by each unit or college.

Planning for our future

Realizing our vision for long-term fiscal resilience begins with this year’s budget cycle. We are beginning the cycle much earlier and shifting our planning from a one-year budget view to a two-year view so that decisions can be made strategically and with more foresight, input and deliberation. We expect to reduce the overall University budget by $225 million over two years. This equates to 12-15% of allocated operating revenue. Final numbers will depend on external factors. Every unit across all campuses and all locations will be doing this work.

We know this reduction, coupled with a new planning process, involves significant change and creates uncertainty. We hope it will also create a sense of mission and collective purpose. Your chancellor, dean or senior leader will be following up with more detail about the process for each campus, college, school and unit.

There are difficult choices and conversations ahead, and we understand this work will not be easy. We are deeply grateful for the many expressions of support and partnership as we forge the path forward together. Please know that we approach this work with great care for our students, staff and faculty. Our mission and values remain our north star.

This moment invites us to proactively build on our core strengths, invest in new possibilities and co-create transformative solutions that ensure the University thrives for generations to come. We owe it to those who worked together to respond to daunting challenges in our first 175 years, and most importantly, we owe it to our future students to ensure this university is positioned to serve them for the next 175 years.

Thank you for your continued dedication and partnership as we embark on this next chapter.

With deep gratitude and appreciation,

Rebecca Cunningham
President

Gretchen Ritter
Executive Vice President and Provost

Mike Volna
Interim Executive Vice President for Finance and Operations

Carol Bradford
Interim Dean of the Medical School and Interim Executive Vice President for Health Affairs