Jan. 14—GRAND FORKS — University of North Dakota administrators are expected to ask the state to help cover rising payroll costs.
University leadership plans to seek state help to offset a host of rising costs tied to employees’ compensation packages, including the recently closed pension plan, in their appearance before the Senate Appropriations Committee.
University President Andy Armacost says his testimony will focus broadly on workforce and tech development in North Dakota; administrators are also expected to speak in favor of several higher ed initiatives increasing funding toward faculty and research.
Each biennium, the North Dakota University System prepares and proposes a system-wide budget with the help of its campuses while lawmakers pass a single omnibus bill for the entire higher ed system.
However, each school in the university system also presents its legislative priorities individually and may deliver additional testimony on NDUS’s proposed budget or other bills.
“In North Dakota, we’re amazingly lucky because we have access to our legislators and we get to talk to them directly,” said Karla Mongeon-Stewart, vice president of finance and operations.
Mongeon-Stewart and Armacost are expected to single out a host of rising employee costs when they present before Senate Appropriations next week.
The university is set to pay $5.7 million over the next two years into the North Dakota Public Employees Retirement System’s defined benefit plan, which the Legislature closed to new employees at the end of 2024.
Employer contributions into the plan are up 5.92%, Mongeon-Stewart said, while health insurance costs, also administered by NDPERS, have jumped 14% to $16.3 million over the next biennium.
Administrators are also expected to ask the state to chip in to continue state employee salary increases implemented for the 2025 fiscal year, and to incorporate “market equity” raises for longtime employees from last session into the higher ed funding formula. (Funding for the equity raises was allocated to the Office of Management and Budget last session, which distributed the funding to state agencies.)
“It’s an opportunity for us to educate the Legislature on what our needs are,” Mongeon-Stewart said. “And they take that information and develop a budget for the whole state.”
NDUS Chief Financial Officer Dave Krebsbach says it’s par for the course to ask the state to chip in for employee compensation costs.
Typically, the state pays for around 35% of the compensation for “appropriated employees” at UND like faculty and administrators, with the rest paid by tuition, Mongeon-Stewart said.
Non-appropriated employees like housing, dining and athletics employees see their compensation paid by university-administered fees and local or federal grants and contracts.
The State Board of Higher Education’s proposed budget, which it signed off on in June, asked for legislative support funding for the pension plan now that new employees are no longer paying into the plan.
It didn’t include specific mention of last year’s salary increases or new health insurance costs, though Krebsbach noted the state board did make a general request for annual salary increases for state employees, which is generally taken to include other compensation.
The Legislature will also get to weigh in on how much colleges and universities can raise tuition.
Mongeon-Stewart said she’s still working on calculating how much UND will have to raise tuition and fees to meet new employee costs. Last year, the Legislature voted to impose a two-year tuition freeze on state colleges and universities during the 2023 session but picked up the check for the lost funding.
“What we need to do is figure out how the university is going to cover these costs,” Armacost said. “Is it additional funding from the state, or is it the flexibility to adjust tuition appropriately?”
Outside of faculty costs, Armacost says he expects to speak specifically to the role UND plays in developing North Dakota’s workforce and role as a tech hub.
That includes requests to support a new nursing research coalition based out of the College of Nursing and Professional Disciplines and discussing statewide efforts to fund artificial intelligence development.
“AI can have a profound effect on our workforce, and we need to make sure higher ed is involved in that discussion, so our graduates are prepared for a workforce that will have AI in it,” Armacost said.
Armacost said administrators also expect to offer testimony on two higher ed initiatives increasing funding for the Challenge Grant and the Economic Diversification Research Fund.
The Challenge Grant is a matching grant program where NDUS awards $1 in grant funding for every $2 in private donations in support of scholarships and faculty endowment. UND claims it has secured $52 million in private donations tied to the program since it was established in 2013.
Administrators are expected to ask the Legislature to increase NDUS’ appropriation for the Challenge Grant to $50 million, a request cosigned by Gov. Kelly Armstrong in his State of the State Address last week.
The Economic Diversification Research Fund funded UND CONNECT, the community research and outreach program.
UND has identified state support for two capital projects, the STEM complex set to replace the Hyslop Sports Center and a new Health Professions Collaborative Facility, among its legislative priorities.
The $56 million ask for the second “phase” of the STEM complex was included in the State Board of Higher Education’s proposed budget in June — the Legislature committed $56 million last biennium to the first phase of the project — but an $83 million request for a new health care facility was left out of the state board’s budget.
Though the state board excluded it, Mongeon-Stewart said that decision “doesn’t preclude us from discussing it as part of our legislative request.”
Armacost said he may also offer testimony on bills that could affect “life on the campus.”
Last session, he testified in opposition to bills that would have overhauled tenure in the university system and criminalized “false and frivolous” allegations of sexual misconduct under Title IX statutes.
“We’ve got human beings here,” Armacost said. “We’ve got libraries. We know the importance of academic freedom and free speech. These are all areas that, when bills are introduced, that we want to work with legislators to consider how the university fits into the broader importance of creating and sharing knowledge and making sure the people who come to our campus have a good experience.”