In 2016 budget proposal, impact of higher education mixed across institutions

Wednesday, March 9, 2016 - 6:13pm

Total state funding for University operations

Total state funding for University operations Buy this photo
Anjali Alangaden

 

This year’s budget recommendations from Gov. Rick Snyder (R) for the 2017-2018 fiscal year included recommendations for increases in a number of areas, including higher education spending.

The increase is larger than what’s been seen in the last several years, after an initial slash to funding of 15 percent when Snyder entered office in 2011. Following the cut, funding has been increased steadily — this year’s increase of 4.3 percent brings the total state funding back to pre-2011 levels. However, at individual institutions, the proposed 2017 numbers could still be lower than pre-2011 — including at the University.

In 2011, the across the board cut resulted in a 21.6 percent decrease of funding for the University. Because of how money is distributed, the University still receives 7.8 percent less funding that it did prior to 2011, though institutions like Grand Valley State University and Ferris State University have seen increases in funding over their 2011 levels of 5.25 percent and 3.6 percent, respectively.

For many, the cut resulted in changes to operations — though it followed a downward trend of funding, it was much more significant than previous years. Michigan State University, which saw a 23.7 percent decrease as a result of the cut and is still 7.9 percent below 2010 levels, has shifted funding resources, aiming to raise more of its operating budget through sources like increased tuition and donations. At the University, the 2011 cuts resulted in a series of changes, including the closing of the Center for Ethics in Public Life and offering several smaller classes, along with a 6.7 percent tuition increase. It was also accompanied by a similar push in fundraising. In November 2013, the University launched the Victors for Michigan campaign — the largest fundraising campaign for any university at the time — with an overall goal of $4 billion, $1 billion of which is specifically set aside for student financial support.

In an interview on Feb. 15, Cynthia Wilbanks, vice president of government relations for the University, noted that despite remaining below 2011 funding, the amount the University receives is still high by comparison, as it’s allocated 21 percent of the total higher education funding in Snyder’s budget proposal.

“It’s important to keep in mind that of the $61 million that has been recommended by the governor, the University of Michigan will receive 21 percent,” she said. “The percentages mask the resources that actually are being provided to the University, so from my perspective 21 percent of $61 million is a good outcome.”

State Rep. Jeff Irwin (D–Ann Arbor) said he does not believe the state’s largest institution should still have funding below 2010 levels, but added that he is glad to see overall progress in increasing funding.

“Our flagship institution is going to be below where they were when the governor took over,” he said. “I’m happy about the increase — it is moving in the right direction. I was happy when I found out it was going to be back from the cuts in 2011, but I found out that wasn’t true. There are certain institutions that are not being treated as well as the others.”

Speaking to previous year’s increases, Zemke said he thought they were too low to compensate for inflation, also noting that higher education funding rates could have bigger impacts on the economy because of student debt burdens.

“The increase last year was very small, I don’t even think it amounted to the rate of inflation,” he said. “I don’t think we are putting enough money in higher ed. Student debt is stymieing our economy — everybody acknowledges this.”

Along with the changing levels of funding, over the past several years, state increases in funding have also come with new performance-based stipulations, based on a number of categories such as graduation rate as well as a requirement that institutions cap tuition increases for the year at a certain percentage point. This year’s funding increase was paired with a 4.8 percent tuition increase cap for every institution.

In the past, the University has not supported any sort of tuition caps correlating with funding increases, saying they believed decisions about how to fund the University should be made internally. However, it has kept within them, unlike several other institutions.The University’s most recent increase last year of 2.7 percent was under the 3.2 percent state increase cap and correlated with a 5.9 percent funding increase for the University.

Wilbanks said it was too soon to project how this year’s funding increase would interact with the University’s financial model, such as tuition.

The budget won’t be finalized until it’s voted on by the state House and Senate, a process that typically doesn’t occur until the summer and during which numbers can often change.

“I would say that it is too early to make any kind of projection as to what the University is going to do in regard to a tuition increase,” Wilbanks said.