University President Mary Sue Coleman protested reductions in funding to state universities in her testimony to the Higher Education Subcommittee of the state House yesterday.

Meanwhile, Gov. Jennifer Granholm and state legislators broke their impasse over higher education funding when Granholm’s revised budget was approved by the House and Senate appropriations committees.

Granholm’s revised spending reduction plan — which aims to remedy a $380 million revenue shortfall in the current fiscal year — still cuts funding to state colleges and universities by $30 million but makes available $200 million in capital expenditure funds to state schools. These funds can be used to finance construction and other infrastructure projects. The governor’s previous plan, which was rejected by the legislature, only offered $100 million in capital outlay funds.

The new budget stipulates that the $30 million will be restored if tax revenue in the remainder of FY 2005 exceeds estimates.

Granholm’s budget lacks the tuition restraints that her original proposal contained. The governor is expected to sign the revised budget into law today.

In her testimony, Coleman listed the measures the University has had to take to cope with falling state appropriations, including eliminating vacant faculty positions and canceling University library subscriptions to many scholarly journals.

But these measures, Coleman said, will not be enough to sustain the quality of education at the University

“The new cost-effective programs are not enough to make up for the dramatic decrease in appropriations,” she said. “It is not a sustainable model,” she added.

Coleman reiterated the global-competition argument for stronger support of higher education.

“We’re in a global race for economic growth, and America is losing ground,” she said. “No state is feeling the pressure more than Michigan,” she added.

Echoing a popular refrain among state policymakers and educators, Coleman said that to remain competitive, Michigan must diversify its economy beyond its traditional strength in manufacturing.

“We need a highly skilled, college-educated workforce,” she said.

Coleman also cautioned against higher education becoming an option only available to the socioeconomic elite.

“We need to reach out to students with financial need,” she said.

U.S. Rep. Joe Schwartz (R-Battle Creek), who also testified before the subcommittee, said Michigan needs to re-arrange its budgetary priorities and supported a separate fund for higher education that he articulated last week.

“I don’t believe you can continue to fund the universities as a (discretionary) item in the general fund,” he said. “The legislature is going to have to identify a restricted fund for higher education,” he added. This would mean the state would not be able to cut funding to universities in the event of a revenue shortfall.

But Boyd said a restricted fund is impractical without a revenue stream to finance it.

Subcommittee Chair Rep. John Stewart (R-Plymouth) criticized the Cherry Commission — on which Coleman served — for setting lofty goals without funding them.

The commission was appointed by Gov. Jennifer Granholm to provide recommendations on how to double the number of college and university graduates in the state in ten years.

Among the commission’s recommendations are universal higher education in the state, the creation of a website that provides information for transfer students and the recruitment of adults who have not completed postsecondary education.

It was not charged with taking funding into consideration.

“Many of the recommendations that were in the Cherry Commission (report) do not require funding,” Granholm spokeswoman Liz Boyd said.

Stewart also expressed concern that Granholm’s revised budget increases spending on the prison system — when the budget for prisons already exceeds state appropriations to higher education.

“It’s clear that higher education is not a priority in the governor’s proposed budget,” he said.

Boyd disputed Stewart’s characterization, saying, “Granholm’s administration is totally committed to higher education in the state.” “Our economic vitality is uniquely tied to education,” she added.

Boyd also defended the increased spending on the prison system as a measure “to address the prison population without (endangering) public safety.”

Phil Power, chairman of HomeTown Communications Network, which publishes many community weeklies in the state, testified in much the same vein as the speakers who preceded him. He accused the legislature and governor of undermining education with annual incremental cuts that have had a significant detrimental impact in the aggregate.

“The most important things in our budget are subject to death by 1,000 cuts,” he said. The yearly decreases in funding to state universities, he added, “are signposts on the way to economic disaster.”

But Boyd said recent cuts in funding are not part of a long-term strategy to reduce higher education funding, but are rather the result of “a very sluggish economy” and “a structural deficit in state government.” She attributed the structural deficit to falling tax rates that have not been accompanied by smaller budgets.

Despite the criticisms of Coleman, Schwartz and Power, Boyd said, “Universities did very well today under the executive order.”

She stressed that higher education is not the only area affected by the state’s budget woes.

“Every organization that relies on state funding has suffered,” she said.

 

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