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Minn. State system's declining enrollment hits budgets

ST PAUL—Most Minnesota State colleges and universities lost money in 2016-17 as overall enrollment fell for a sixth consecutive year.

The state's low unemployment rate and a declining number of young adults have had the state's largest higher-education system in budget-cutting mode for years.

Full-year equivalent enrollment totaled 131,640 last year, down 17 percent from 2010-11. Another 1.9 percent decline is expected this year.

Twenty-two schools operated the 2016-17 school year at a loss while 15 made money.

Yet individual institutions are getting better at managing the loss in students, according to a report Wednesday, Jan. 24, to the system board of trustees. They're setting budgets with more realistic enrollment targets, cutting staff and reining in course offerings.

"Campuses are getting better at forecasting their enrollment — or they're getting less optimistic," chief financial officer Laura King said.

Two years ago, 19 of 37 schools were under extra scrutiny by the system office for failing financial stress tests. This year, that number is nine.

The nine are four universities — Metropolitan State, St. Cloud State, Southwest Minnesota State and Winona State; and five colleges — Mesabi Range, Riverland, Hibbing, Pine and MSC Southeast.

"Folks are doing good jobs with budgets, they're not spending fund balances," King said. "They're struggling to balance budgets but they're getting them balanced."

Three of those schools — Metro State, Winona State and Hibbing — triggered both of the system's low-cash flags for letting their fund balances drop below 20 percent of annual revenues and spending at least 10 percent of the fund balance over three years.

In Metro State's case, the primary cause was unexpected soil contamination found during construction of a student center and parking ramp.

Schools under financial monitoring meet regularly with the system's central office to go over budgets and enrollment strategies.

MSU Moorhead President Anne Blackhurst said it's no fun being on the watch list.

"I didn't like it. It was not always pleasant to have regular meetings with (King) and her staff," she told trustees.

Still, Blackhurst credited King with helping her school. Moorhead now flags just one of the system's five indicators, down from four when it was under extra scrutiny.

"It felt supportive even while it was a very challenging situation," she said.

The St. Paul Pioneer Press is a media partner with Forum News Service

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