University administrators are sending a clear message to state officials: the University of Michigan is important, and it needs to be properly funded.

The University’s fiscal year 2013 budget development letter was released to the University’s Board of Regents in a communication yesterday. At the regents’ monthly meeting on Thursday, they will vote on whether to send the letter to State Budget Director John Nixon. In the letter, University President Mary Sue Coleman questioned the new funding model proposed by the state — known as formula funding — and claimed that the model poses “a new array of challenges” for the University.

In the letter, Coleman suggested that the state should focus on measuring the University’s performance when employing formula funding — a system in which state appropriations would be determined based on universities’ fulfillment of certain criteria, including graduation and freshman retention rates.

“The objective of formula funding should be to allocate funding based on the value that each university brings to the state, so that the formula provides financial incentive for each university to maximize that value,” Coleman wrote.

Coleman argued that the new model ignores the unique mission of the University and may cause the state to cut more funding. She cited the University’s educational programs and student body of more than 27,000 undergraduates and 15,000 graduate students as well as the University’s $1.24 billion research expenditures in fiscal year 2011 as reasons to reconsider comparing its value to other state universities.

In her letter, Coleman suggested that the state use the Carnegie Classification of Institutions of Higher Education — a framework for understanding institutional differences of universities across the country — to determine the appropriate state funding allocation for the University.

Coleman lauded the University’s previous and current cost-cutting efforts, but said these reductions will not be possible if the state continues to limit its financial support.

With about $268.5 million from the state for the current fiscal year, the University receives about 30 percent less funding from the state than it did 10 years ago. State appropriations for the University decreased by $47.5 million from the 2011 fiscal year.

Coleman added that continued investment in the University will mean success for the state.

In an interview in September with The Michigan Daily, University Provost Phillip Hanlon said the University plans to work closely with the state to overcome budget challenges. Hanlon said Republican Gov. Rick Snyder’s two-year budget plan, which includes next year’s budget, allows for University input. He added that University administrators are happy to discuss the budget with state officials.

“We’re giving whatever input we can, and we’re watching and waiting,” Hanlon said.

Hanlon also said Nixon and other state officials have been open to listening to the suggestions and concerns of University administrators.

“We expect that there will be a lot of discussion however they decide to do the appropriation,” Hanlon said.

Regents to review renovations to two residence halls

The regents will also discuss the details of planned renovations to East Quad and Baits II Residence Halls.

The regents approved the $116 million renovation of East Quad at their July meeting. At their meeting this Thursday, they will review the proposed schematic design of the project, which aims to improve the infrastructure of the 300,000 gross square-foot residence hall.

In a communication to the regents, E. Royster Harper, vice president for student affairs, and Timothy Slottow, executive vice president and chief financial officer, wrote that the Residential College uses spaces in East Quad that are not designated for academic purposes. The communication suggests that the project will remedy this — making East Quad a more suitable home for the approximately 860 residents and allocating more space for the Residential College.

The regents will also review the renovation of Baits II, which is projected to cost about $12 million.

If approved, the renovation of Baits II would update the 175,000 gross square-foot complex, which houses about 575 students. The new building would have updated fire safety devices, high-speed Internet, refurnished rooms and environmentally sustainable windows and roofs. University officials expect that the project will be completed in summer 2013.

Last week, University Housing announced that Baits I Residence Hall will close its doors to the approximately 571 students it houses after winter 2012. According to University Housing spokesman Peter Logan, the building’s boiler systems need to be replaced, which would cost $6 million. Additionally, the residence hall fails to meet the standards prescribed by University Housing’s Residential Life Initiatives, according to University Housing Director Linda Newman.

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