U of M President Asks System to Eliminate UMD’s Sequestered Debt

The Funds Will Not Affect the 2020 Budget Cuts


DULUTH, Minn. – University of Minnesota President Joan Gabel announced on Friday that she has asked the System for funds to eliminate UMD’s sequestered debt over the next two years.

Gabel wrote in an email on Friday:

“Duluth has been front of mind for me since becoming President on July 1. UMD is a core part of our mission. I believe in what you’re doing, and I’m grateful for the tremendous value you bring to the table for all Minnesotans. With the budget reductions announced last week, UMD has taken difficult but necessary steps to balance the annual structural imbalance. It is therefore important to me that the structural changes you are undertaking receive support from decisions the System can make to strengthen Duluth and accelerate future success.

Accordingly, I have asked that the System, over the next two years, contribute approximately $6.8 million in one time dollars to eliminate UMD’s current sequestered debt, which has accumulated over the last few years. I don’t make this decision lightly. Eliminating this debt allows for new investments and next chapters to truly focus on the future.”

According to the Star Tribune, the one-time funds will have no effect on the $5.2 million in UMD budget cuts for the 2020 school year.

Last week, UMD Chancellor Lendley Black announced the budget cuts that will merge the School of Fine Arts and College for Liberal Arts resulting in the loss of 42 full time and part time faculty, staff and graduate teaching assistant positions.

Chancellor Black released a statement Friday saying:

“I am extremely pleased that President Gabel is committing University of Minnesota System funds to eliminate UMD’s sequestered deficit. It is clear that she recognizes the difficult budgetary decisions we have made at UMD to balance our recurring O&M expenses and revenues. The sequestered deficit is the negative balance which has accumulated over the years, because of the annual structural imbalances of our O&M budget.

The actions we have taken recently on campus will eliminate UMD’s structural imbalance by the end of Fiscal Year 2021, and President Gabel’s actions will also eliminate the sequestered deficit by the end of Fiscal Year 2021.  President Gabel has indicated over the past few months that she will partner with UMD to address our budget challenges. Her actions today are a major step forward in this process, and we appreciate her commitment to UMD.”

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