BY BETHANY BIRON
Daily News Editor
Published February 17, 2011
Republican Gov. Rick Snyder announced his proposed budget for the 2012 fiscal year in Lansing yesterday, outlining substantial cuts in government spending, including a 15-percent decrease in higher education funding.
After hearing word of the proposed decrease in funds for higher education, University officials said they had expected cuts and will take them into account when planning the University's budget. Democratic legislators also expressed disappointment yesterday in the possibility of the reduction in state allocations to Michigan colleges and universities.
Snyder’s proposed 15-percent reduction is more than five times greater than the 2.8-percent cut in state appropriations for public universities in the 2011 fiscal year.
University President Mary Sue Coleman said in an interview after the University’s Board of Regents meeting yesterday that University officials had been expecting another cut to higher education funding in the upcoming fiscal year and are now in the process of determining how this will impact the University.
“We didn’t know what to expect actually, but we knew, just looking at the revenues of the state, that things were going to be tough, of course,” Coleman said. “I’m all for investing in our education because I think it is the key to the future, but we haven’t had time to analyze (the cuts) yet.”
University Provost Philip Hanlon echoed Coleman’s statements and said University administrators had been monitoring the state budget in anticipation of cuts to higher education funding. Despite Michigan’s challenged economic environment, the University will continue to work toward sustaining University operations, Hanlon said.
"We’ve been watching the state budget closely for a number of years, and we understand the difficult situation (lawmakers are) in, and we’ve been preparing and we’ll do everything we can to support student affordability and academic excellence,” he said.
Cynthia Wilbanks, the University’s vice president for government relations, said yesterday that the University is in the preliminary stages of interpreting how the proposed budget will affect University operations. She added that it is too early to determine the impact a decrease in state funding would have on next year’s tuition.
“It’s a lot to go through, and we’re just beginning the process of really analyzing the various aspects of the budget," Wilbanks said.
She explained that in past years, state appropriations were supplemented by federal stimulus funding. Now that the state will receive less stimulus money, there will be no funds to offset the large cut to higher education.
“The state budgets had been supported in part over the last several fiscal years by the injection of federal stimulus funds, but we knew that there would be a time coming when those funds would no longer be available to plug the budget gaps,” she said.
The University Research Corridor — a collaboration between the University of Michigan, Wayne State University and Michigan State University that focuses on maximizing the state’s resources to boost the economy — issued a statement yesterday that said despite the decrease in funding that will potentially impact the universities’ research initiatives, they will keep collaborating to foster growth within the universities, and in turn, the state.
“We will continue to work as a partner with the state to balance fiscal necessity with the need to keep all of Michigan's public universities strong and competitive,” URC Executive Director Jeff Mason wrote in the statement. “We will remain committed to being a positive force in reinventing our state and meeting this century's economic challenges — and we've shown time and again that investing in higher education reaps a solid return.”
State Sen. Rebekah Warren (D–Ann Arbor) said in an interview yesterday that while she applauds Snyder’s past endeavors to increase the number of graduates in the state, she doesn’t understand how the state can continue to exceed these goals if it takes funding away from universities.
“How can (Snyder) say that (his) goal is to increase the amount of Michiganders with a bachelor’s degree and above and then really pull the rug out from under them by both giving less financial support to our public universities and colleges?” Warren said.
A major concern Warren said she has is that the decrease in funding to higher education will result in increases to tuition and decreases in financial aid and scholarships for students in the state, which has happened in the past.
“You’re going to see more of that burden falling on our families and our students, and I think you’re going to end up seeing a whole group of our talented, motivated, young people being priced out of higher education,” Warren said.
While Warren said she wasn’t particularly surprised by Snyder’s budget proposal, she was alarmed by how much Snyder intended to cut from different programs.
“I think what was surprising to me was really the severity of some of the cuts that we saw,” she said. “I don’t think some of us were really expecting cuts to go quite that deep.”
Other components of Snyder’s proposed $45 billion budget include a $1.8 billion tax break for businesses in the state, cuts to the Michigan film tax incentive, the elimination of tax exemptions for many Michigan citizens, including senior citizens, and a $300-million decrease in statutory revenue sharing for cities. Snyder recommended the tax break for businesses by replacing the Michigan Business Tax with a flat rate 6-percent corporate income tax for certain companies.
Warren said programs such as education and welfare will also suffer from a decrease in state tax revenue from businesses if Snyder’s proposed business tax plan is carried through.
She added that a governor’s budget is symbolic of his or her personal values about the state as a whole. By examining where the governor wants to allocate or cut state funding, Warren said it is evident where the governor’s interests lie, which, for Snyder, is in business rather than the people.
“To me, I think the bottom line (of) a budget is a values document,” Warren said. “If you even look at your home budget right now, you figure out where you spend your money. That’s where your priorities are.”
Snyder also proposed yesterday that his salary for the 2012 fiscal year be $1 since he said Michiganders will all experience a “shared sacrifice,” the Associated Press reported.
State Rep. Jeff Irwin (D–Ann Arbor) said by cutting from higher education, the state fails to utilize a pivotal instrument in facilitating economic growth.
“The University of Michigan is probably our state’s single-best economic development tool, so cutting back on our best economic development tool seems like a bad recipe for economic success,” Irwin said.
By focusing mainly on assisting businesses in Michigan, Irwin said, Snyder fails to see the important role state universities play in encouraging businesses development.
“The types of businesses that we’re trying to attract to Michigan aren’t just interested in taxes. In fact, they’re mostly interested in quality educational systems so they can recruit top talent out of our schools and so that their employees can send their kids to good schools,” Irwin said.
Other legislators contacted by The Michigan Daily, including state Reps. Mark Ouiment (R–Scio Township) and Chuck Moss (R–Birmingham), could not be reached for comment.
— Daily Staff Reporters Mike Merar and Michele Narov, Daily News Editor Joseph Lichterman and Managing Editor Kyle Swanson contributed to this report.