In Granholm's budget proposal, a restored but altered Promise grant

Daily Staff Reporter
Published February 11, 2010

Though Democratic Gov. Jennifer Granholm’s proposed budget for the 2011 fiscal year includes funding for the Michigan Promise Scholarship, the reinstated program will now take on a new form.

Granholm’s proposed new version of the Promise Scholarship is a $4,000 tax credit to any student who gets a college degree at a state university and works for one year in Michigan.

The original Michigan Promise Scholarship, which was eliminated in the 2010 fiscal year budget despite Granholm’s vocal opposition, was a merit-based scholarship that provided between $500-$4,000 over the course of four years to about 96,000 students across the state.

University spokesman Rick Fitzgerald told The Michigan Daily in October that 6,096 students were eligible for the scholarship for the 2009-2010 academic year.

With the state of Michigan facing about a $1.5 billion deficit for the next fiscal year, Granholm’s $47.1 billion budget proposal for the 2011 fiscal year represents an increase from the current fiscal year’s budget of $45.2 billion. It also includes a freeze on higher education appropriations, keeping funding for state universities at the same level as provided by the 2010 budget.

Liz Boyd, press secretary for Granholm, said higher education has always been a priority for Granholm and reinstating the Michigan Promise Scholarship has been a major goal for the governor, especially in light of the economic downturn.

“Everyone has to pursue their education after high school and the Michigan Promise Scholarship was a way for us to say to students, ‘not only do we want you to go to college, we want you to be prepared for college. We feel so strongly about it, we’re going to help you pay for it,'" Boyd said. "That’s the whole promise behind the Promise, that we would help students fund their education.”

Granholm’s budget also proposes to allocate about $325 million in state appropriations to the University — the same amount as the current fiscal year.

Cynthia Wilbanks, vice president for governmental relations at the University, wrote in an e-mail interview that she is glad to see Granholm’s budget has no cuts to higher education funding, but noted that the amount of money allocated to higher education could change when the House and Senate review the proposal.

"So at the very start, there is some good news in that the recommendation doesn't call for a reduction to higher education," Wilbanks wrote. "And I'm optimistic that the outcome will be positive. But, as you know, the legislators will soon begin their work on the state budget and their input is critical to the final outcome."

State appropriations are a large factor in planning the University’s budget for next year, including the status of tuition, Wilbanks wrote.

"The University will work through the next few months to construct a budget that meets the University's needs and the recommendation of the governor will be considered," Wilbanks wrote. "State support is one of many pieces of the University's budget."

Wilbanks wrote that she thinks Granholm’s idea for the reinstatement of the Promise Scholarship — as a tax credit for students who work in the state for one year after graduating — will have positive effects on retaining Michigan’s college graduates and in turn, helping the state’s economy.

"I think there are a number of features of the plan that focus on helping the state's economy, including the goal of helping to reverse the brain drain that a lot of people are worried about," Wilbanks wrote.

State Rep. Joan Bauer (D–Lansing), chair of the House’s Appropriations Subcommittee on Higher Education, said in an interview yesterday that Granholm’s proposal to keep higher education spending at last year’s level is a good first step. But Bauer also said she is disappointed that the state hasn’t increased funding for students over the years.

“Even though next year the good news is University of Michigan will not receive a cut in state funding, the bad news is that we continue to not be increasing our funding at all, which, with inflation, means that students are picking up more and more, and tuition is increasing, which is unfortunate when we’re trying to make college more affordable and accessible for young people,” Bauer said.

Bauer said the proposed new Promise Scholarship is important in making college more affordable, but said she is also concerned about how the state will pay for it in the future since it's in the form of a tax credit.

“I applaud the governor for recommending the restoration of the funding for the Michigan Promise,” Bauer said. “The biggest concern is that we will have to take a look, and as a tax credit, we’ll have to take a look down the road when it will start impacting the budget.”

State Sen. Liz Brater (D–Ann Arbor) said though Granholm’s budget includes some positive proposals, including the new Promise Scholarship, it’s going to take time for her plans to come to fruition, given the state’s continuing economic hardships.

“The governor’s budget was delivered in the context of an ongoing fiscal crisis here in the state and she’s got some interesting ideas in there, and it’s going to take time to study it and see,” Brater said.

Granholm’s budget plan will now go to the House and Senate where its contents will be negotiated, and later this year, given back to the governor for approval.