Legislature's roads plan could impact higher education funding

By Emma Kinery, Daily Staff Reporter
Published December 18, 2014

At about 5:30 A.M Friday morning, the Michigan legislature passed the last of a series of bills in a plan for funding to fix Michigan's roads that could also impact higher education allocations in the state.

Top Republican and Democratic leaders in the state legislature, along with Republican Gov. Rick Snyder, struck the proposed deal Thursday. Because one of the key proponents of the plan requires a constitutional amendment, the plan will now go before the state's electorate as a proposal on the May 2015 ballot.

The proposal initially calls for an increase in the sales tax from 6 percent to 7 percent, which is what will go before voters in May. It also calls for removing the sales tax on fuel sales. If the sales tax change is approved by the electorate, several other bills — including restoring the Earned Income Tax Credit to its pre-2011 levels, a wholesale tax on fuel and increase on vehicle registration taxes — will additionally come into effect.

To offset the loss of the fuel sales tax, the proposal also bars the state from taking money from the School Aid Fund, which currently relies on the fuel tax for most of its money, to fund public universities.

Public universities currently receive about 20 percent of their yearly appropriation from the School Aid Fund, all of which would be eliminated under the proposal. Community colleges and K-12 schools would continue to receive funding.

However, in an extended plan released Thursday afternoon, the governor’s office said the lost money for public universities, totaling to about $200 million, would now be provided through the state’s general fund. Providing public universities funding through the School Aid Fund is a recently new development — up until the past few years, universities have been allocated state monies only from the general fund.

In a phone interview Thursday afternoon, Snyder Press Secretary Sara Wurfel confirmed that, if approved, the money will be taken from the General Fund. She added that the Snyder administration is devoted to increasing investment into higher education.

In 2011, the Snyder administration cut higher education funding his first year in office by 15 percent, but has since proposed incremental funding increase each year, with raises of 3.1 percent in 2012, 2.2 percent in 2013 and 6.1 percent in 2014.

The issue also came up at the Board of Regents meeting Thursday, with several regents expressing concern about the impact of the changes on the University.

In response, Cynthia Wilbanks, vice president of government relations, said there have been some concerns raised about the impact of the changes but her early indications from the state budget director and others have been that their intention is to maintain higher education funding.

In an interview after the meeting, Wilbanks pointed to the fact that the School Aid Fund has only supplied University funding for the past several years.

“This is relatively new — and the legislature has had differences of opinion on whether the School Aid Fund should be used for university support — but nonetheless that funding has been very helpful in keeping some momentum around increases to the University,” Wilbanks said. “Now… if the ballot proposal passes, we’ll need to return our focus to just the general fund support for universities, so we have our work cut out for us.”

“Of course, our goal is not just to be whole, but to continue to grow and invest in higher education,” she added.

Daily News Editor Shoham Geva contributed reporting.

This story has been updated to reflect the passage of several bills through the state legislature.