Gov. Jennifer Granholm announced the 2010 state budget yesterday, confirming fears that large-scale cuts are in store for an array of programs, including a 3-percent reduction in funding for state universities.

The 3-percent cut in university funding would affect state colleges and schools, but would not impact community colleges.

In a statement yesterday, Provost Teresa Sullivan wrote that the cut in funding would translate into a $9.8 million decline in funding for the University of Michigan’s General Fund, from which a variety of academic programs receive funding.

Though the University of Michigan has asked the state to increase funding nearly every year, the cash-strapped state government has rarely said yes. According to the University’s 2008 Financial Report, state funding has declined in each year from 2004 to 2008, except in 2007. The worst of these years was when the University was hit with about a 10-percent reduction in 2004.

Sullivan said in the statement that such financial problems were not unexpected and may force administrators to hold off on some of the University’s plans.

“We anticipate the next several years will present numerous fiscal challenges, and we may have to delay or rethink some of our programs and projects,” Sullivan wrote.

However, in interviews yesterday, Granholm said she was optimistic that the recently passed federal economic recovery package would provide the state with enough funding to maintain the previous years’ funding levels to public schools and universities.

The 2010 budget includes $500 million in federal funding, but the state could receive as much as $2 billion in the form of grants and loans over the next two years.

In a statement released yesterday, Cynthia Wilbanks, the University’s vice president for Government Relations, wrote that the University of Michigan plans to work with state officials to find a solution to its funding woes.

“We look forward to working with the governor and legislators over the next several months to minimize the negative consequences of what we anticipate will be another difficult year,” Wilbanks wrote.

Despite the budget cuts and financial strains facing both the University and the state, Sullivan said she remains optimistic about the University’s ability to maintain its high academic standards and accessibility to students from all economic backgrounds.

“In setting budget priorities, protecting the University’s academic mission — including recruiting and retaining outstanding faculty members — is at the forefront of our decision-making. Making U-M accessible to students also is one of our top priorities,” she said.

As the state’s economic picture has darkened and funding for higher education has dwindled, Sullivan wrote that the University has worked to reduce expenditures.

“Although we have cut operating expenditures by more than $135 million during the past six years, we must reduce expenses even more to meet the financial challenges ahead,” she wrote.

In addition to these cost-cutting measures, the University plans to continue reducing expenses wherever possible. However, one of its major focuses has been increasing the amount of financial aid available to students.

According to Sullivan, a committee comprised of faculty, staff and students will work to find new ways for the University to cut costs in the year ahead. The committee is scheduled to meet for the first time in March and will seek input and suggestions from students, faculty and staff.

Cuts to public school funding, the state correctional system and arts and culture programs were also included in Granholm’s budget released yesterday. These cuts are designed to combat the approximately $1.4 billion budget deficit Michigan is expected to face in the 2010 fiscal year.

The cuts are expected to include layoffs of 1,500 state employees, the release of 4,000 non-violent prison inmates and a $59 per pupil reduction in spending at public schools.

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