Regents back president's FY26 budget package, including plan to finance major campus repairs and modest tuition increases

The University of Minnesota's Finance & Operations Committee on Wednesday reviewed the president's recommended FY26 capital and operating budgets, and discussed plans to direct internal resources and limited borrowing to tackle an estimated $8 billion in campus repair needs over the next decade.

President Cunningham told the committee the university must find "a new and more viable, and the most cost effective way to protect and extend the useful life of our buildings," saying, "We have $8,000,000,000 of repairs needed over the next decade." She framed the capital proposal as a means of reducing dependence on unpredictable state funding while continuing to seek state partnership.

The proposal discussed by executive leadership would raise a recurring repair-and-replacement (R&R) allocation by $10 million per year. That recurring stream would support periodic borrowing (EVP Goldman described borrowing roughly $150 million against those allocations as an example) to accelerate work; over a 10-year horizon, the administration said the approach could enable roughly $750,000,000 in targeted infrastructure investment.

"We are holding our facilities together with bubble gum and bailing wire," Executive Vice President Goldman said, arguing a mix of recurring internal allocations, selective debt and state partnerships could produce several large, shovel-ready projects rather than many small requests. Goldman cited recent state help for marquee projects (noting Gopher Stadium and the Biomedical Discovery District as past partnerships) and said the administration will continue coordinated lobbying for a smaller set of priorities.

Vice President for University Services Alice Roberts Davis reviewed FY26 capital items that met the board's readiness criteria, including a university-funded, campuswide solar installation; a donor-funded new apple house at the Landscape Arboretum to replace an existing seasonal facility (to open in 2027 and named for longtime supporter Betty McMillan); and a Levovitz Center renovation in Duluth supported partly by recently announced state HEAPR bonding. Roberts Davis told the committee the legislature had just approved $60 million of the university's $200 million HEAPR request and an $8 million transportation grant for permanent railing improvements on the Washington Avenue bridge.

On the operating side, President Cunningham and Vice President and Budget Director Julie Tonneson told regents the FY26 package balances targeted investments and difficult scope reductions in response to an uncertain revenue environment. Cunningham said the university already has seen roughly $40,000,000 in paused federal research activity and warned of broader federal funding declines. Tonneson summarized the all-funds budget (roughly $4.8 billion, excluding internal sales) and said sponsored research and indirect cost recovery represent a significant portion of the university's revenue base and the largest near-term risk.

Key elements of the operating proposal include a roughly $111.4 million compensation investment (presented as a 4% aggregate budgeting assumption: a 3% general pool plus 1% market adjustments), a $10 million recurring increase to R&R, a $15 million recurring workforce reinvestment pool, and a mix of internal reallocations (about $92.1 million) and tuition-rate changes the administration estimates would produce roughly $71.8 million in additional revenue. The Twin Cities resident undergraduate recommendation was the largest single tuition change discussed (presented as 6.5%). Tonneson emphasized that, she said, adjusted for inflation the university's in-state tuition remains lower than it was a decade ago.

Regents asked for more detail on non-tuition revenue strategies, the timeline for rolling out capital priorities, and the temporary central review processes the administration proposed for non-academic hiring. The administration described the hiring checks as short-term fiscal controls intended to prevent structural deficits and said academic hiring plans would continue to be driven by deans and the provost with added financial verification.

Student representative Simon Moreno urged clearer, ongoing communication to help students see how tuition and fees fund concrete campus improvements, and asked how students could be engaged in advocacy; the administration said it will continue student-government engagement and outreach.

Next steps: the committee previewed a public forum scheduled for later the same day and reminded members that the full Board will meet June 18 for action on both the operating and capital budgets.