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The All Campus Labor Council, a group of unions at the University of Michigan, hosted what they called a People’s Regents meeting last Thursday evening to discuss a pilot process for participatory budgeting, a process in which the public votes on where they believe spending from the U-M endowment should be allocated. 

While University students, faculty and staff currently do not have power to decide where money from endowment is spent, participatory budgeting is meant to signal where community members would like to see the money allocated and aims to increase the administration’s transparency in spending by communicating community preferences and concerns. At the University, the budget is put together by administrative staff and approved by the Board of Regents and University President Mark Schlissel.

The pilot process is modeling how the public would allocate funding if the ACLC had access to 1% of spending from the University’s endowment.

The University’s endowment — which currently sits at around $12 billion — is a pool of assets from donors split into thousands of funds that, together, compose the University Endowment Fund. These include restricted funds and unrestricted reserves, the latter of which the Board of Regents can choose how to spend. The University chooses to spend 4.5% of its endowment annually after a 2010 Board of Regents vote that approved a decrease in endowment spending — and invests the rest.

The ACLC is asking the public to submit proposals about funding allocation to be discussed at an upcoming People’s Regents meeting in May. A voting process will be finalized during the meeting, and U-M students, faculty and community members will be able to vote on their preferred proposals. 

The pilot process originated following a protest in September 2020 — amid the Graduate Employees’ Organization strike — where campus labor groups, including the ACLC, said there was a lack of transparency in the University budgeting process. The issue of transparency was also raised in June 2020 when the Board of Regents voted to approve a 1.9% tuition increase for the Ann Arbor campus as part of the fiscal year 2021 budget. Students criticized this move, citing financial hardship and primarily online classes due to the COVID-19 pandemic as reasons the University should not raise tuition.

Liz Ratzloff, GEO staff organizer, explained in an interview with The Daily that the ACLC plans to learn from their pilot process this semester to determine what participatory budgeting plans they can suggest to the University in the coming months.

“To be clear, this idea is in its very initial stages,” Ratzloff said. “Many individuals and groups have already called on the University to dedicate funds for a number of important initiatives. But we’re working to imagine a completely different process.”

 

Ratzloff emphasized during Thursday’s meeting that participatory budgeting empowers the community to have a voice in how the University allocates their budget, leads to more equitable spending and promotes transparency. For the pilot process, the ACLC aims to ask community members which initiatives they believe the University should fund if they were to set aside 1% of their endowment.

“First we have to design a process together, which is what we are starting to do here today,” Ratzloff said. “Then, groups of volunteers will start to develop proposals and submit those proposals and then the community will vote. The projects that are widely supported are then funded, and we can see how those projects help make our community more equitable.”

Ratzloff said the Board of Regents ultimately has the final say on whether or not the University will use participatory budgeting.

“They have a lot of power,” Ratzloff said. “So there is a really good possibility that we can use this process to change what it looks like to get the Regents to allocate money to the funds that we all prioritize.”

LEO member Andrew Thompson, professor of Art & Design, said the endowment money available for spending would be raised significantly if the University raised the spending percentage from 4.5% to 5.5%. 

“We are spending less money percentage-wise from the endowment than what we were ten years ago,” Thompson said. 

The ACLC also discussed the voting process for pilot participatory budgeting. According to X, every participant will vote as if they have $92 million to allocate as they see fit across the listed proposals, which will be decided once community members submit their proposal ideas. 

LSA junior Joseph Lobodzinski, who attended Thursday’s meeting, said to other attendees it may be difficult to decide where money should be allocated because people may need a long time to rank proposals. He emphasized that the quality of all of the options depended on the number of proposals being offered. 

“If there (are) a lot of proposals, there may be more than five that people … want to see implemented, so it is kind of a Catch-22 situation,” Lobodzinski said.

Thompson assured members that the voting process for pilot participatory budget would remain flexible. 

“We can keep the spirit alive,” said Thompson. “Whatever we vote on, we know that we can tweak it to serve some of these criticisms.”

Daily Staff Reporter Vanessa Kiefer can be reached at vkiefer@umich.edu.

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