ST. PAUL — The University of Minnesota will raise tuition at its Twin Cities campus this fall.

The school’s Board of Regents voted Tuesday to approve university President Eric Kaler’s recommended budget, which will raise tuition by 2 percent for currently enrolled or incoming Minnesota residents and 12.5 percent for incoming nonresidents at the Twin Cities campus, the St. Paul Pioneer Press  reported. Nonresidents already enrolled at the Twin Cities campus will see a tuition increase of 5.5 percent.

Kaler said the 2 percent rate is a compromise from the 3 percent rate hike he originally suggested.

“We have listened to the board carefully,” he said.

Undergraduates at the university’s four other campuses will have 1 percent tuition increases, though Duluth nonresidents will see their rate climb 5.5 percent.

The budget also includes a 2 percent wage increase for all employee groups.

Regent Steve Sviggum called for a 1 percent decrease in resident tuition for undergraduates at all schools in the system and a decrease in the university’s workforce. Regents Darrin Rosha and Michael Hsu agreed with Sviggum, but others said they’d like to see a plan to shrink the workforce next year.

“It would put us in better standing with citizens, the taxpayers of Minnesota and, for sure, the Legislature,” Sviggum said.

Regent Richard Beeson said cutting the budget would hurt the university and wouldn’t attract philanthropic gifts. But Sviggum said he’s heard from donors who’ve said they won’t contribute to the university until it reduces costs.