University general counsel Donica Varner has met with both membres of the Michigan Student Assembly and students advocating for the creation of a University chapter of the Public Interest Research Group in Michigan, and recommended MSA not fund Student PIRGIM because it would lose its tax-exempt status.
But the Central Student Judiciary, the judicial body of the MSA, has not yet released a verdict regarding the funding, despite hours of deliberation yesterday.
Varner said there are three issues that need to be addressed before funding for PIRGIM can go through and not threaten MSA’s status as a tax-exempt organization.
The first issue involves federal tax law that stipulates only 5 percent of the budget of a tax-exempt organization like MSA can be granted to groups that lobby.
“If MSA was found to be engaging in a significant amount of lobbying, it might jeopardize tax status, and all revenue could become taxable,” Varner said. But PIRGIM claims that none of its funding would count toward the 5-percent rule because it would not lobby at all.
The second issue is that Student PIRGIM is attempting to gain funding through MSA’s discretionary fund, which does not have set guidelines for supporting a group like Student PIRGIM. Students for PIRGIM and MSA took steps last night toward establishing guidelines, meeting with a collection of student groups and MSA representatives to draft new rules.
Although the guidelines are still in draft form, they could be approved and take effect as soon as March 22. A vote to fund Student PIRGIM could possibly occur on the same night.
“I think this was a good example of how people can work together to find solutions,” said Rese Fox, chair of MSA External Relations Committee.
The third issue brought up by Varner was that Student PIRGIM plans to use the money to hire a professional campus coordinator. The University would not have sufficient control over the coordinator because he would be selected and employed by PIRGIM, Varner said, a complication that might cause legal problems.
“Instead of paying someone a permanent salary, it would be much wiser for PIRGIM if they did something like fund a training retreat,” Varner said. “This way we can be really sure students in the group are getting what they need and not giving the University an undue burden.”
Students for PIRGIM argued that the campus coordinator is essential to completing their missions. They likened not having a coordinator — a position they said all of the other Student PIRG chapters in the country have — to writing a thesis without a professor, adding that it would lessen their effect and empowerment of students.
“It’s a whole other wealth of experience,” said Abe Scarr, who works for PIRG and is helping students set up a group at the University.
The University should trust students to hire the campus coordinator, Students for PIRGIM chair Carolyn Hwang said.
“This is an insult to the abilities of students,” she said.
Members of Students for PIRGIM believe that Varner’s concerns stem from a personal bias against PIRG.
“She should not use her authority to advance her personal opinion,” Hwang said.
Varner emphasized that she has nothing against the group.
“This really isn’t about a PIRGIM,” Varner said. “I know they try to make it out that way. This is about establishing sound policies for student groups.”
A MSA vote to grant the group the money was scheduled for Feb. 21, but MSA Chief of Staff Elliott Wells-Reid filed an injunction against MSA to halt the vote, citing concerns that the group would threaten MSA’s tax-exempt status because part of PIRGIM’s parent group is involved in lobbying. Student PIRGIM, though, has said it will not be involved in lobbying efforts and that it is an advocacy group — a difference based on the fact that lobbyists address legislators directly.
As a result of an aborted settlement Wednesday afternoon, the trial split into three parties — Students for PIRGIM, MSA and Wells-Reid. At the beginning of the trial, Wells-Reid asked CSJ to sever MSA from Students for PIRGIM and consider them separately. CSJ said it would consider the motion for severance at a later time and that it should go on with the trial in case the results are needed.