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North Dakota University System budget talks come with inflation concerns

On June 30, board members approved an operating and capital budget request, the chancellor's salary and university president salaries.

North Dakota University System
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GRAND FORKS — The North Dakota Board of Higher Education voted to approve a 2023-25 budget request, but not without talk of how inflation will affect the expected costs outlined by the board.

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

The budget request has to be submitted to the North Dakota Legislature by August, said David Krebsbach, vice chancellor for administrative affairs/CFO. Then, the NDUS budget is consolidated with budget requests from other state agencies, and from that, the governor puts together a budget request based on what each agency submitted. When the Legislature meets in January 2023, representatives from the university system will have a chance to present the budget to the Legislature, which will make a final decision on the budget in April 2023.

With the deadline to submit the budget request and the date it will be approved so far apart, members of the board voiced their concerns about the request’s relevance with rising prices.

Board Member Jeffry Volk worries that faculty and staff salaries in the university system will have to be increased to keep up with inflation, and tuition and fees will in turn have to be increased to make up the difference in the budget, causing enrollment to drop. He says the board needs to ask the Legislature to fund those fund more pay increases due to inflation.

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

More than a plan for just the 2023-25 biennium, says Volk, the university system should have a plan with legislators and the governor’s office for how the entities will work together through inflation, especially with rising construction costs for capital improvements.

“In the 2021-23 biennium we collectively, completely missed the effect of inflation, and that’s not a dart at anybody. It happened, right?” said Volk. “I think there needs to be a strong effort to go back and kind of catch up on what we didn’t know, what the legislators didn’t know and what we’ve experienced in this state.”

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After an executive session, the board renewed NDUS Chancellor Mark Hagerott’s contract for an additional two years, with a 2.7% salary increase. Hagerott’s 2021-22 salary was $389,516, and a 2.7% increase brings his pay 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 an open session, but state law changed to require the discussion to be held in a private session, the same as discussions about university presidents’ contracts.

“He’s getting the same treatment that presidents are given, and I think, much better because I think board members feel more open to making suggestions that can be beneficial, but if not interpreted appropriately, could be harmful,” said Board Chair Casey Ryan.

Board members also approved contracts for presidents in the university system after a second closed executive session, and announced that the SBHE has initiated a compensation study with the Association of Governing Boards of Universities and Colleges to examine presidential salaries in the university system. Details of the presidents’ contracts and salary increases were not available at the meeting.

Ingrid Harbo joined the Grand Forks Herald in September 2021.

Harbo covers Grand Forks region news, and also writes about business in Grand Forks and the surrounding area.

Readers can reach Harbo at 701-780-1124 or iharbo@gfherald.com. Follow her on Twitter @ingridaharbo.
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