North Dakota University System Budget Talks Come With Inflation Concerns

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June 30 – GRAND FORKS – The North Dakota Council on Higher Education has voted to approve a 2023-25 ​​budget request, but not without discussing how inflation will affect projected costs set by the council.

Board members approved an operating budget request of $680.1 million and a capital budget request of $252.7 million.

The budget request must be submitted to the North Dakota legislature by August, said David Krebsbach, vice chancellor for administrative affairs/chief financial officer. Then, the NDUS budget is consolidated with budget requests from other state agencies, and from there, the governor develops a budget request based on what each agency has submitted. When the Legislative Assembly convenes in January 2023, representatives from the university system will have the opportunity to present the budget to the Legislative Assembly, which will make a final decision on the budget in April 2023.

With the deadline for submitting the budget request and the date when it will be approved being so far off, council members have expressed concern about the relevance of the request with the rising prices.

Jeffry Volk, a member of the board of trustees, is concerned that the salaries of faculty and staff in the university system will have to be increased to keep up with inflation, and that tuition and tuition will in turn have to be increased to make up the difference in the budget, resulting in lower enrollment. He says the board needs to ask the Legislative Assembly to fund these salary increases due to inflation.

“We have a very unstable environment ahead right now, and one of the things we probably need to engage the legislature in is stabilizing that system right now,” Volk said.

More than a plan for the 2023-2025 biennium, Volk says, the university system should have a plan with lawmakers and the governor’s office on how the entities will work together through inflation, especially with the increased construction costs for capital improvements.

“During the 2021-23 biennium, we collectively completely missed the effect of inflation, and that’s not an arrow to anyone. It happened, right?” Volk said. “I think there needs to be a major effort to go back and catch up on what we didn’t know, what lawmakers didn’t know, and what we went through in this state.”

After an executive session, the board renewed the contract of NDUS Chancellor Mark Hagerott for two more years, with a salary increase of 2.7%. Hagerott’s salary in 2021-22 was $389,516, and a 2.7% raise brings his salary to $400,033.

This was the first year that the Chancellor’s Review was conducted in an executive session. Previously, the chancellor’s review was conducted in open session, but state law changed to require the discussion to be held in closed session, similar to discussions of contracts for college presidents.

“He gets the same treatment as the chairs, and I think, much better because I think board members feel more open to making suggestions that may be beneficial, but which, if not interpreted correctly, could be harmful,” said board chairman Casey Ryan.

Board members also approved contracts for university system presidents after a second closed executive session and announced that the SBHE had launched a compensation study with the Association of University and College Boards of Trustees to review the salaries of presidents in the university system. Details of the presidents’ contracts and salary increases were not available at the meeting.

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