- Virginia Lozano/Daily
By Jackie Charniga, Daily Staff Reporter
Published June 18, 2015
The University Board of Regents met for their June meeting Thursday in the Anderson Room of the Michigan Union where they discussed the $1.83 billion University budget for the 2015-2016 fiscal year.
Approved proposal to increase tuition rates
Regents approved a proposal to increase tuition costs for students in fall 2015.
Spearheaded by Provost Martha Pollack, the General Fund Operating Budget proposal called for a 2.7 percent increase on in-state and graduate tuition rates, and a 3.7 percent increase on out-of-state tuition rates to account for an 8 percent increase in undergraduate financial aid totaling $70,000.
The proposed increase, Pollack said, would help secure academic excellence and student access.
“We must continue to have capacity to provide our students with a world class education that prepares them to drive in the 21st century, and we must continue to invest in financial aid to ensure access to all qualified students,” Pollack said. “This budget emphasizes these goals, while continuing to our cost containment efforts and our strategic use of philanthropic resources to moderate tuition increases.”
Regents approved the proposal in a 6-1 vote.
Regent Andrea Fischer Newman (R–Ann Arbor), who voted against the proposal, expressed her concerns about increasing tuition rates.
“Some parents are able to provide their children with the financial resources necessary to pay room, board, tuition fees and books,” Newman said. “For others, higher education is out of the question without loans, grants and other forms of aid.”
Newman also pointed out that it's the regents who make these decisions about tuition, not the state and not Federal government.
“Continuing to push for more federal and state spending is not the answer, but just a shrinking subsidy to an ever-growing budget,” Newman said. “We need to fix this problem or we are going to price the middle class out of higher education, or burden them with so much debt they’ll never get out.”
Regent Mark Bernstein (D–Ann Arbor) defended the budget, arguing that through the lens of a fair and socially just perspective, the proposed budget is prudent, modest and reasonable.
Bernstein stressed the need for the regents to stop being defensive about tuition and to instead focus on being more proactive individually.
“We hear a lot about how much college costs, and public concern for this is obviously understandable. But what gets lost in this conversation very frequently is that this focus on tuition is largely figuratively and literally superficial,” Bernstein said.
He also highlighted how the tuition increase should benefit lower income students.
Bernstein continued, “For me, what is essential for making college affordable is making college affordable for students who need the most help making it affordable.”
Bernstein stated that net tuition, what students and families actually pay, should have been the primary consideration when creating the budget.
“Low income middle class students desperately need this [financial] help,” Bernstein said. “Let me be blunt: wealthier families don't. Of the $11 million dollars, average net tuition of this University is down $1,000. It’s lower here than Grand Valley, MSU.”
Regent Laurence Deitch (D–Bloomfield Hills) said regents need to challenge themselves for alternative forms of revenue than hiking up tuition.
“We’re lucky at this place compared to our peers in Michigan, our historical excellence, attraction of strong students of means internationally,” he said. “This is what gives us power at this table.”
Citing his baby boomer roots, Deitch spoke of the bygone era of students being capable of paying tuition with part-time work.
“I defy you to find a summer job that’s going to help you pay what you’ve gotta pay,” he said.
Regent Michael Behm (D–Grand Blanc) stated that while he will be voting in favor of this budget, he also wanted to express concern about the dangers of raising tuition costs.
“My loan payments were twice the amount of my wife’s and my mortgage. I don’t want to repeat what everyone said, but it is the people in the middle we’re worried about here,” he said.
Aside from the tuition increase, Pollack said the budget proposes “strategic academic excellence” investing in data science initiative, and the health education program. Pollack emphasized the change in the budget would be implemented with “an eye towards emphasizing the middle class.”
Pollack also said the budget proposed “aggressive steps to monitor tuition rates” with donors, working to develop alternative revenue sources.
Since 2003-2004 the regents have decreased their budget expenditures by $313 million on a recurring basis, which is more than the state appropriation. The plan calls for an additional $24 million to be removed by 2016.
Some of the cost extraction was achieved in part by consolidating staff in areas of graphic arts and non-hazardous waste removal. Additionally, 31 degree programs were eliminated due to low enrollment.
The remaining funds will go towards the rising mental health and disability services. According to the report, the fall of 2014 saw a 20 percent increase of students seeking aid through Counseling and Psychological Services.
Aside from boosting financial aid and lowering costs, according to Pollock, the tuition increase should also benefit campus climate.
This improvement will occur in the form of outreach programs for out-of-state students, programs for underrepresented groups such as the Change It Up! program, as well as professional development experiences for faculty members so that they be more equipped to address the issues of a multicultural classroom.
Pollack spoke in favor of the rewards of the budget, reiterating the new initiatives stood up in terms of new academic and support for students as well as continued support for existing programs.
“I think the thing that a lot of people forget is that we live in a world where there is inflation,” Pollack said. “Even if you just keep doing exactly what you were doing the year before, things cost more because the things we have to purchase cost more.”
Approved Central Student Government fee assessments
CSG President Cooper Charlton, an LSA senior, spoke favorably to the benefits yielded by last year’s fee increase to the budget of 2015, which allowed them to address the needs of more than 430 diverse campus organizations and initiatives.
“Extremely extremely diverse pools of students this year were funded thanks to the fee increase,” Charlton said.
Charlton also discussed how some students feel isolated because of the distance between North, South and Central campuses. He expressed the need to increase transportation to bridge the gap.
Another topic of concern was the lack of a firm sense of understanding regarding the definition of sexual assault on campus. Charlton believes this requires a definition for the necessary momentum required in a cultural shift. Solidifying such a definition is the goal of CSG in the upcoming year.
Approved hospital budget, housing rates and University Health Service cost increases
Regents also approved increases in health care costs and housing rates within the University Hospitals and Health Centers budget.
The housing budget requested a rate increase of 3 percent for the residence halls, with 2 percent allocated for renovations and 1 percent for maintenance.
Additionally, there was a proposed 1 percent rent increase for the Northwood apartments for operating costs.
The regents commented on the successes of the residence halls, in particular Munger Graduate Residence Hall, as well as Northwood III filling up favorably.
“Adequate funding for the fiscal year” is the proposal in the budget regarding the increasing University Health Service costs. UHS expressed the need for this increase, asking for 2.7 percent, an increase of approximately $181.43 per student.
UHS said the funds will be allocated to alcohol risk management and clinical risk management initiatives that are in progress.
Additional resources for facility management were proposed because of the age of the buildings.
The vote for the health care proposal concluded with a 5-2 vote in favor, with Regents Richner and Newman opposed.
The University of Michigan Hospitals and Health Centers and housing budget proposals passed unanimously.
Approved University of Michigan Athletic Department Operating Budget
Additionally, Interim Athletic Director Jim Hackett offered remarks the financial condition of the University’s athletic department, with the operating revenue at $153.6 million.
“There is a good news bad news story. The good news is that next year we have a balanced budget, bad news is this year we had a deficit,” Hackett said.
Football ticket sales were down last year and added compensation accounted for the deficit. According to Hackett, expected revenues for next year appear healthy.
“Season ticket sales will probably hit an eight-year high,” Hackett said.
Over 18,000 tickets have been sold for the approaching sports season, which may account for the projected increase in spending. Higher salaries and wages are also projected for next year, as well as an increase in team and game expenses to account for travel fees.
However, Hackett stated that in the face of all the demands made in the budget, a total of $5 million would be deferred for maintenance funds.
In addition, Hackett said the golf course design project approved in July by the board is also on track, and Yost Ice Arena is also scheduled to receive a new icing system.