U of M Board of Regents approves balanced operating budget

Approval follows a full budget review, public forum and online public comment period

Following review of the University’s annual operating budget in May, an in-person public forum and an online public comment period, the Board of Regents approved the U of M’s fiscal 2025 operating budget. 

“The University of Minnesota’s continued success is measured by the world-class learning, discovery and engagement our students, faculty and staff engage in,” said Board Chair Janie Mayeron. “As one of America’s leading research universities, the U of M has been one of the state’s truly unique assets for more than 170 years. Though we are working against sizable resource challenges, this budget continues vital work to educate Minnesota’s future leaders, drive a talented workforce, and bring groundbreaking research and development to communities throughout the state.”

The budget anticipates approximately $5.1 billion in revenue for the coming year to cover approximately $5 billion in expenses, an increase of more than 3% in both categories over last year. Balancing the budget required accounting for continued revenue pressures, the ongoing squeeze of inflationary cost increases, necessary spending on critical operational and safety needs, and the challenging internal reallocation of existing resources.

Leaders emphasized fair pay for faculty, staff and student employees throughout the budget, ensuring the University continues to attract and retain talented faculty and staff. Systemwide, most employee groups will receive merit-based increases averaging 3%, with collective bargaining unit employees averaging 4% increases, in alignment with labor agreements. Additionally, the student minimum hourly wage will increase to $15.25, and a $20/hour base salary floor will be established for Civil Service and P&A employees.

Another key budget priority was strategic investment in academic and support unit activities, with a focus on those that meet student needs. Approximately $63 million in new commitments will support increased funding for systemwide student financial aid delivered through the President’s Matching Scholarship Fund, additional faculty and services to continue growth in the high-demand Computer Science and Engineering program, new resources to develop and deliver innovative liberal arts curriculum, strengthening campus training and response initiatives such as the sexual misconduct prevention program, and more.

Several times over the last year, budget discussions with the Board and state lawmakers anticipated an increase in undergraduate tuition primarily due to growing essential costs and flat state investment. The budget includes a necessary tuition and fee plan that increases undergraduate tuition by 1.5% at the Crookston, Duluth and Morris campuses, 4.5% at Rochester and for resident students at the Twin Cities, and 5.5% for non-resident/non-reciprocity Twin Cities students.

To offset increased costs and balance investments in key areas — including employee compensation, financial aid, student programming, and necessary maintenance and renovations to University facilities — all University units systemwide will make internal reallocations in the coming year. These reallocations, often in the form of spending reductions and operational changes, are part of the U of M’s annual budget process and require leaders at all levels to identify efficiencies, reductions and means to ensure spending delivers the greatest results. Along with projected growth in unit-generated revenues, these internal changes will recapture more than $37 million. 

Public comment encouraged through Board of Regents Virtual Forum
The Board continues to welcome public comment on any topic before the Board through the Board’s Virtual Forum. The public can submit audio, video or written comments to the Virtual Forum from anywhere at any time. All comments are shared directly with Regents and included in the Board’s public docket materials. Individuals are encouraged to visit the Virtual Forum to submit their comments.

The Board also:

• Adopted its 2024-25 meeting schedule.
• Continued discussions on health sciences strategic planning with the deans of the six health sciences schools.
• Approved the administration’s recommended fiscal 2025 capital improvement budget.
• Received the annual report on Native American Affairs and TRUTH Report Response with Interim President Jeff Ettinger and Karen Diver, senior advisor to the President for Native American Affairs.
• Reviewed the Rochester Campus Plan.
• Discussed the University’s centrally held endowment.
• Received an update on systemwide enrollment coordination.
• Approved amendments to Board of Regents Policy: Tuition and Fees.
• Approved a resolution revoking the honorary naming of Nicholson Hall.
• Received annual reports from governance leaders representing faculty and staff.
• Recognized outgoing Interim President Ettinger.

The Board of Regents is scheduled to meet next on July 10-12. Visit regents.umn.edu for more information.