The University of Minnesota's response to financial cutbacks due to unexpected reductions in state revenues is discussed. The public higher education system and each state agency submitted alternative retrenchment budgets. The University of Minnesota proposed three approaches for cuts at the 12 percent level: across-the-board reduction; closing selected programs and campuses; and closing the entire university for one academic quarter. By June 30, 1983, the university had to reduce its expenditures and/or increase its income by a total of $25.6 million from the original amount budgeted for the 1981-1983 biennium. Within the university, priority statements that specifically identified the high and low priority programs in a college were drafted, along with a table, which is enclosed, summarizing 90 programs that were to be either eliminated, reorganized, or reduced. A voluntary separation and early retirement policy was also made available to faculty in programs that were affected. Finally, the mix of spending reductions and income enhancements to balance the projected shortfall was determined. The following criteria were utilized for program planning: quality, connectedness, integration, uniqueness, demand, and cost effectiveness. (SW)