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Mark Kennedy addresses potential UND budget cuts

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As UND President Mark Kennedy rounds out his second year in office, he does so with a unpleasantly familiar prospect—the possibility of future budget cuts.

The university is still about a year away from meeting its next state-appropriated budget, but Kennedy began his presentation at Wednesday's biannual University Council meeting by directly addressing early funding concerns now floating through North Dakota higher education.

"We're at the start of a long road to whatever the budget conclusion is and there's going to be many turns along that road," Kennedy said.

The first step down this road came just a few weeks ago with the release of Gov. Doug Burgum's preliminary budget guidelines. Burgum, an advocate of "reinventing" government through digital upgrades and increased cooperation across departments, suggested a total 13 percent funding cut across larger state offices, a reduction that would apply to state dollars for higher education. The North Dakota University System as a whole would see a cut of more than $66 million, according to the system's chief financial officer. UND and its medical school, which receives its own state appropriation, could see a two-year state funding reduction totaling to about $25 million.

Kennedy noted it is early enough in the budgeting process that the university has yet to receive budgetary direction from the NDUS governing board. UND will write its preliminary budget through the summer, but the planning will be subject to plenty of change even after that as the governor revises his own guidelines before the 2019 legislative session, in which lawmakers will ultimately determine the final level of funding.

In the meantime, Kennedy said, "we really don't know, so we shouldn't over-analyze each step of the process."

"We're going to need to make our case the way we always have," he said, referencing the process by which higher ed leaders have traditionally proven their worth to North Dakota.

Strategic plan

Aside from his most recent budgetary comments, Kennedy's latest presentation hit several points that would be familiar to his listeners over the past year or so.

The main topic of the Wednesday address was the university's strategic plan, a five-year document finalized last spring. Kennedy has previously touted the plan as UND's best means to face whatever challenges are brought by either local funding troubles or the national disruption of traditional higher ed models.

His University Council speech—which came packed with statistics, graphs and other supporting factoids—was no exception to that.

Kennedy sees online education, a pillar of the strategic plan, as a key component to UND's future growth in student enrollment and credit hour delivery. He touched on that throughout his presentation and a following question-and-answer session, suggesting that UND stood to benefit from a bullish approach to digital instruction.

Though not the first school to go online, Kennedy said UND still has a competitive edge in being a fairly early entrant among large-scale, state universities. To that end, he wishes to see UND take steps to quickly ramp up its online reach through a process of "picking your spots" in terms of marketable, potentially high-growth specialty areas, which could include programs in unmanned aerial systems or cybersecurity.

If online education was a recurring theme of Kennedy's presentation, so too was Arizona State University. The massive Arizona school is looked to as a leader in national higher education for its innovative business model that boasts a number of private-public partnerships and an online-only enrollment of more than 30,000 students.

In total, ASU serves more than 100,000 students. Burgum has spoken highly of the southwestern university in recent weeks, touting its adaptations to a dwindling number of traditional-age college students and less in the coffers of state higher ed funding.

Kennedy said he was hoping to place UND's online education programs squarely in competition with ASU and Purdue University of Indiana, both regarded as top contestants in the field.

He also compared the university to ASU on another, possibly even more timely metric—total reliance on state funding.

Most universities build their budgets around revenue from a variety of sources, including state appropriations but also streams like tuition, donations and federal grants. Not long ago, Kennedy said, UND broke $100 million for the first time in its total haul of research dollars.

Counting its full appropriations including capital costs, Kennedy said UND pulled about 26 percent of its 2017 revenue from the state and is likely even lower now after the last tuition hike went into effect. Though ASU sits a good bit lower at only 13 percent, Kennedy pointed to his own campus as the "least reliant" of the NDUS institutions on funding from the state Legislature. North Dakota State University, according to the data he presented, is a close second at 29 percent. Valley City University drew the highest portion of its funding from state appropriations at about 63 percent.

In the future, Kennedy said, UND stands to gain by pushing its state reliance even lower.

"We have a lot of debates and a lot of discussion that will be going on over the next year, but we need to realize that we're well-positioned," Kennedy said.

Andrew Haffner

Andrew Haffner covers higher education and general assignment stories for the Grand Forks Herald. He attended the University of Wisconsin in Madison, where he studied journalism, political science and international studies. He previously worked at the Dickinson Press.

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