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MnSCU official: Prepare for major aid losses

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WILLMAR -- Ridgewater College could face state aid losses of several million dollars in the coming years, as the state and the nation come to grips with the aftermath of the recession.

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Ridgewater College, along with the other schools in the Minnesota State Colleges and Universities system, needs to begin planning now to address potential revenue shortfalls in 2011 and beyond, MnSCU Vice Chancellor Laura King said Tuesday.

King, the system's chief financial officer, was in Willmar to present the Excellence in Financial Management 2009 award to the Ridgewater financial staff. She also spent about an hour speaking with college staff members about the economy and the financial pressures facing higher education.

While specific estimates aren't available yet, a state budget forecast expected next week should make the picture clearer. The state's public higher education institutions, including Ridgewater, could face huge losses in state financial support in the next few years, King said.

The losses in state aid could be as much as one-third if the state budget is balanced entirely through budget cuts, she said, but that's based on preliminary figures. The cut would be less if revenue increases are also part of the budget plan.

While King cautioned that the numbers will continue to shift as more is known about state revenue, she added, "If I'm half-wrong, it's still bad."

State economic and demographic figures indicate that the world is changing, King said.

The population is aging and will require more health care, she said, and government focus will be shifting from education, higher education and infrastructure to caring for the elderly.

The recession has also caused a permanent reduction in the revenue outlook for most state and local governments, she said.

"The forecast is essentially a flat revenue outlook for the next 20 years," she said, and the little new revenue available will be directed toward health care costs, with nothing left for education.

In the past year, community colleges like Ridgewater have had record enrollment growth.

"We have less state money every year at the same time we're serving more students," King said. "We need both. We need strong enrollment, and we need state support."

Ridgewater President Doug Allen said he had met Monday with students, who told him the budget situation is difficult for them, too.

"We need to plan now for those kinds of reductions," he said.

Ridgewater's financial situation is not bad right now, but he's not sure people understand the changes that could be coming, he added.

"You really have to get out 18 to 24 months ahead," King said. "If you don't, you could end up scrambling," which she said would be the worst situation for students.

After the meeting, Allen said he had met recently with some area public school superintendents, to talk about ways they can work together and possibly share services. The recession and the losses in state aid "will force us to pull together more," he said.

King said she was confident that Allen and Ridgewater's leadership will do a good job of addressing the budget issues. "We know (the students) are getting a very good value."

Allen said 97.1 percent of Ridgewater graduates in 2008 got jobs in their field of training. "I would say that's a good value," Allen said.

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