State budget cuts to higher education funding for the 2012 fiscal year — which started Saturday — have forced public universities across the state to close departments, lay off employees and raise tuition.

But among University officials, there is hope that the funding cuts — the largest in Michigan’s history — could also prompt the government to reform distribution of the state’s appropriations among its 15 public institutions.

The reductions, which were originally part of Republican Gov. Rick Snyder’s proposed state budget for the 2012 fiscal year, decreased funding for higher education by $225 million — playing a factor in the University’s decision to raise tuition to cover a $47.5 million shortage.

After the reduced state funding left the University with the $47.5 million shortfall, the University’s Board of Regents voted in June to raise tuition for in-state and out-of-state students. The rate of increase was 6.7 percent for in-state students and 4.9 percent for non-residents.

In the aftermath of this year’s cuts, however, the state has reconsidered a model for distributing allocations based on performance metrics such as graduation and freshmen retention rates, according to Cynthia Wilbanks, the University’s vice president for government relations.

The possibility of using performance metrics as a basis for doling out state funding comes as Snyder's and state universities’ budget and planning offices begin to map out their 2013 fiscal year budgets. Discussions between the state and universities are already underway and are expected to continue as Snyder prepares to unveil his state budget blueprint at the start of 2012, Wilbanks said.

A provision calling for the state to examine university performances was also a part of Snyder’s fiscal year 2011 budget, according to Wilbanks. The provision has sparked what Wilbanks called the “most serious discussion (on the metrics)” that she’s seen in years.

“I think the budget office and legislators are all thinking about how that might work for fiscal year ’13 funding,” she said.

But for the fiscal year 2012 budget, it was too soon to determine the logistics of the metrics and the breadth of opposition and support for their use, Wilbanks said. She added that she thought the performance metrics should be accounted for.

“There is a clear expectation that universities must play a role in the state’s economic revitalization, and I hope that is recognized in some way,” Wilbanks said. “Each institution has an enormous impact in the community they serve and beyond, and of course the talent they produce has economic benefit as well.”

In addition to raising tuition across the board at the state’s public universities, the reductions in the fiscal year 2012 state budget had varying influences on the institutions’ budgets. Due to the state funding cuts, the University closed the Center for Ethics in Public Life and has begun offering fewer small classes. However, The University’s Office of Admissions has remained need-blind, when reviewing applications, and financial aid is at an all-time high at $137 million.

Michael Boulus, executive director of the President’s Council, State Universities of Michigan, said Michigan’s public universities have adapted well to a decade-long trend in statewide cuts to higher education funding.

“We’ve been managing to maintain high quality despite state cuts due to efficient decisions at the University level,” Boulus said.

He added that rising enrollment rates statewide have been an encouraging sign.