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'A $5 million problem': Hanson unveils potential plan to reduce BSU's budget by 10 percent

Permanent reductions in staff, programs and other areas are inevitable, Bemidji State University President Richard Hanson told faculty, staff and students Tuesday.

"Fear is knocking at the door," Hanson said in his morning address. "It's a very real thing. But how we react to that fear is important."

BSU marked its largest freshmen enrollment this fall since 1981, but with a $6 billion state deficit on the horizon, BSU may be faced with a nearly $5 million problem. Hanson estimated BSU and Northwest Technical College will likely need to reduce its budget by 10 percent.

Hanson outlined his plan for recalibration twice Tuesday. The plan called for reducing, eliminating or retaining programs in three areas: administrative services, academic programs and ancillary programs (supplemental programs such as athletics).

Bill Maki, BSU's vice president for finance and administration, estimated that roughly 60 percent of BSU's budget is academic programs; 25 percent is administrative programs and 15 percent is ancillary programs.

"One way to respond to a loss in operating revenue is to chop off everything by 10 percent," Hanson said. "I don't think that's a very good way to go."

Hanson presented diagrams showing the likelihood of reductions. Programs that are not mandated by the governor, Legislature or the chancellor and can be eliminated will be a high priority. Other programs that are likely to be eliminated are those with high costs, low enrollment, low program quality or poor student outcomes.

Hanson's plan called for "holding conversations" in the form of meetings and written reports from program leaders. Departments will have an opportunity to submit a review of their programs by Dec. 1.

A list of those eligible for Board Early Separation Incentive, or BESI, would also be used in the recalibration plan to determine how the budget will be reduced.

Hanson's afternoon talk was in front of an audience mostly of students, many of whom were enrolled in liberal arts programs.

Several students voiced their concerns about the liberal arts programs being cut and whether or not students would be able to finish their programs in order graduate.

Hanson said students will be able to complete their program, as scheduled. Future freshmen and new recruits will have a new list of programs to choose from.

Hanson added there is no list created as of yet that gives the names of positions to be cut. There is, however, a list of those eligible to accept BESI, an early retirement program.

"But that's not my cut list," he said.

According to Hanson, reviews will be processed and forums will be held before any staffing changes, eliminations of majors or minors or department mergers would occur. By next spring final decisions will be made on all reductions.

"Recalibration is our chance to strengthen," he said. "We are going to be stronger. We are not going to be the same. You can't take $5 million out of an institution and assume it's going to be the same. It can't be."

Reductions that will occur will be permanent, Hanson said. One staff member asked Hanson what the purpose was of evaluating programs if changes were to be permanent anyways.

"It would make my life easier that way," Hanson said, referring to if changes were not permanent. "But unfortunately it would contribute to a tremendously inefficiency in getting the budget to where it needs to be. The Minnesota bucket is leaking and it will continue to leak. It will never be at the level it is at now. We have to have some sureness that we can get our budget to where it needs to be. I can't change it."

Fulton Gallagher, a former BSU professor and dean of academics, said he was concerned Hanson's plan does not consider the community's interests.

"I think it's critical we look at ourselves both from a global perspective and from a community perspective," Gallagher said. "As you take a look at the plan, I don't see anything in there specifically about addressing the needs of the community or the needs of academia."

Hanson said while he didn't agree with Gallagher's last statement, he said the university has a responsibility to the community and to its tradition and will honor that.

In January, Hanson said the BSU Foundation's board of directors will be meeting with a consultant who will design a plan for executing a philanthropic campaign. He also urged faculty and staff to apply for grant dollars to support their work.

Hanson reassured those who attended his talk that he has been through this process before at several different institutions and has a good feel for how BSU will come out of this.

"We're going to be stronger than we are now," he said. "We will look a little different, but we will be stronger and more capable of meeting our fundamental mission. The budget from St. Paul is a big curve ball, but our students are still here and they deserve engaged faculty members and president."

The Office of the Chancellor for the Minnesota State Colleges and Universities is in the process of reducing its budget by $4.2 million and eliminate 41 positions by July 1, 2011.

Online presentation

To see the president's presentation on recalibration, visit