A decision made by Michigan's state legislature May 20 to mitigate the state's $800 million deficit by cutting funding to state universities leaves the University of Michigan to find ways to make up for losses of more than $35 million from its yearly budget.

The deal in the legislature delayed giving about $140 million of the $1.6 billion earmarked in 2007 for public universities until the next fiscal year. That means the University will not see the $29.6 million it is to receive this August until Oct 1 - if the state is able to provide it at all.

Another $5.6 million was entirely eliminated from the University's state appropriations for this year.

Despite the state's plan to repay most of the money, the budget cuts will force many state universities to consider themselves in deficit for the 2007 fiscal year ending June 30. That could lead to the withholding of resources and double-digit tuition hikes, said Mike Boulus, executive director of the Presidents Council of State Universities of Michigan.

University administrators met on Friday to discuss the impact of the cuts on the University and potential courses of action.

Phil Hanlon, associate provost for academic and budgetary affairs, said the University will withhold $35 million from the general fund - which goes to facets like course instruction and research programs - to make up for the hole left by the appropriations postponement.

He said the University expects the state will be able to finance the endowment it delayed by October.

"Yes, the University said that and we expect that they will," Hanlon said. "The Provost's Office is acting prudently by holding back funds equal to that amount."

Hanlon said the University knew of the possibility of being without its state endowment in August and is not immediately planning to raise tuition.

"It's too early to talk about tuition hikes for next year," he said. "How the state decides to set its fiscal year 2008 budget is a significant factor in deciding that."

The University would be in trouble if the reductions were to become a fixture in the state budget, Hanlon said.

"The right thing was to raise revenue and avoid cutting higher education for the sixth consecutive year," he said.

Appropriations cuts to the state's public universities since 2001 amount to $2,500 per student, Boulus said.

Boulus said last week's decision contradicts Granholm's plan to revitalize the state with young trained professionals by doubling the number of college graduates in the next 10 years.

"(State lawmakers) like to give lip service to education," he said. "They went home on Friday saying education was spared when really only K through 12 was spared."

This year's budget cuts will leave universities unable to accommodate more students and will lead many students burdened by the high costs of college to drop out, Boulus said.