Nonpartisan staff outline higher education base budget and governor’s change items; OHE grant increase tops recommendations

Megan Bursch, a nonpartisan fiscal analyst with Senate Counsel, Research and Fiscal Analysis, briefed the Senate Higher Education Committee on the November 2024 budget forecast and the governor’s 2025 recommended change items.

Bursch said the higher education budget jurisdiction has a total all‑funds base of about $3.974 billion for the 2026‑27 biennium and roughly $3.970 billion in the general fund. She summarized agency base appropriations that commonly appear in the committee’s jurisdiction: the Office of Higher Education (OHE) had a general fund base of roughly $725.1 million, Minnesota State Colleges and Universities (MinnState) about $1.751 billion, and the University of Minnesota about $1.494 billion across the biennium. The Mayo Medical School general fund base was about $3.6 million.

On the governor’s recommended change items, Bursch said two adjustments in OHE would have general fund impact: a modest operating adjustment (about $490,000 in 2026‑27 and $656,000 in 2028‑29) and a $15 million increase to the state grant program in each biennium. The governor’s proposal also included statutory changes to some state grant eligibility and award parameters; Bursch said those changes would be expected to lower projected state grant expenditures in future years compared with current OHE projections, but she deferred detailed policy discussion to the agency.

Bursch described a recommended adjustment in OHE’s postsecondary institution licensing and registration fees as a special revenue change that would increase both expenses and revenues by about $682,000 in each biennium; the net special revenue impact would be neutral because expense and revenue changes offset. She summarized the governor’s higher education change items as producing a net general fund increase of $15,490,000 in 2026‑27 and $15,656,000 in 2028‑29.

Committee members asked for follow‑up detail. Bursch and legislators flagged two topics for further briefing: (1) how the $15 million increase to the state grant program would change OHE’s spending and awards to students, and (2) what the proposed licensing and registration fee changes would mean for institutions and whether those costs would be passed to students. Bursch said the committee will have further opportunities to review the governor’s recommendations in future bill hearings and that the agency would likely be asked to testify on policy changes.

Bursch provided committee members with guidance on where to find the detailed tracking spreadsheets and offered to distribute the complete digital spreadsheets on request. The committee adjourned the session after the presentations and Q&A.