DS VIEW: Budget

UND will be looking for ways to cut costs and increase revenue, as there is a  $5 million shortfall for 2016. This is not recent news for UND, however. In May, UND Vice President of Finance and Operations Alice Brekke first discussed the shortfall at a University Council meeting. Brekke waited to address the shortfall until there were more people at UND. The increase in costs was not balanced by the 2.5 percent increase in tuition. In fact, a 3.7 percent was needed to cover the cost of increasing salaries and operating costs.

It is unclear as of now if the fiscal budget will continue to be in a shortfall in 2017.

In order to find ways to cut costs and increase revenue, Brekke has been meeting with administrators and deans to come up with possible solutions.

As the entire state swelled with oil money, more revenue was brought into North Dakota. The excess was great for building new facilities and renovating buildings in need of repair.

Oil prices will stay fairly low, so we expect there to be a decline in state allocated funds for UND.

So how can UND manage the shortfall?

As students, we really appreciate the affordable tuition costs at UND. An extra 1.2 percent would not break the bank. For the average freshman who is enrolled in 16 credits and has an unlimited meal plan, they would pay under $100 extra per semester. Ideally though, students shouldn’t have to pay extra so tenured professors can make more.

Another possible solution to the shortfall is for the entire state to increase the income tax. According to bankrate.com, North Dakota’s income tax ranges in  five brackets from 1.22 to 3.22 percent. North Dakota has one of the lowest overall tax rates in the U.S. There are states, like South Dakota, which have no income tax. In order to offset the deficit, South Dakota has a cigarette excise, bank franchise and alcoholic beverage taxes.

North Dakota on the other hand has a 5 percent sales tax, still less than Minnesota’s 6.8 percent

Our neighbor to the east has an income tax ranging in four brackets from 5.35 to 9.85 percent. While the 9.85 percent seems exorbitant, it is reserved only for people who make over $250,000.

Balancing the budget is no easy task. A $5 million shortfall might seem like a lot, but UND has many costs to account for along with many variables affecting revenue.

We do not mean to give Brekke and the rest of the administrators an excuse for the shortfall; we are simply trying to show there are many factors that affect the balance of a budget. Hopefully UND will be able to come up with a solution for the long term so there is no continuing deficit into the 2017 fiscal year.