Republican Gov. Rick Snyder announced his recommendations for Michigan’s fiscal year 2013 budget in Lansing yesterday, which includes a 3.1-percent hike in funding for public universities that will be tied to several criteria meant to contain tuition hikes and encourage performance.
Snyder’s proposal aims to invest $36.2 million more in higher education than last year’s budget, which cut state appropriations to Michigan’s 15 public universities by 15 percent. The University will receive a 1.4-percent increase in funding, amounting to the same increase in total funds as Michigan State University.
The University and MSU are receiving the second-lowest increase in funding among state Universities, just above Wayne State University, which will receive 0.9 percent more funding.
Snyder’s proposal noted that a university’s level of funding will depend on its ability to keep tuition affordable.
“Universities that better constrain tuition and fee increases will receive greater funding,” the proposal stated. “Tuition restraint funding will be allocated to qualifying universities once all institutions have set their academic year 2012-13 tuition rates.”
The proposal also recommends that state universities receive varying levels of funding based on their outcome in a new performance formula. The formula measures include four factors: growth in undergraduate degree completion, undergraduate degree completion in “critical skill areas,” the number of undergraduate Pell Grants awarded and the ability of the university to comply with tuition restraint standards issued by the state.
During last year’s budget cuts to higher education, funding decreases were contingent upon a tuition cap of a 7.1-percent increase for in-state students. Last June, the University’s Board of Regents voted to increase tuition by 6.7 percent for in-state students and 4.9 percent for out-of-state students.
University President Mary Sue Coleman said in an interview with The Michigan Daily that she is concerned about the longetivity of the funding increases Snyder has proposed.
“My overarching concern is that it’s only one-time money,” Coleman said. “That’s very difficult because if it doesn’t go in the base, it could be taken away next year.”
Coleman added that she is particularly concerned about the formula funding method Snyder has recommended because it will be difficult for well-established institutions like the University to improve much more on their current performance.
“We’re a mature institution, we graduate a lot of students already, and we already have a very high graduation rate,” Coleman said. “And it seems like one of the things that they’re looking at is the increase in numbers (of graduates), and we’re already so high that we’re not going to grow substantially.”
In the University’s fiscal year 2013 budget development letter released in November, Coleman initially expressed concern with Snyder’s formula funding model, arguing that the University shouldn’t be compared to other state universities to receive funding.
“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.
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 appropriate funding for state universities.
Cynthia Wilbanks, the University’s vice president for government relations, released a statement yesterday that supported the proposed increase allocations to higher education, adding that it will be important to thoroughly examine formula funding logistics when finalizing the budget.
“We are encouraged to see the proposed increase in funding for higher education,” Wilbanks said. “It’s important to get the additional detail on the new funding that is tied to performance metrics so we can analyze the impact.”
Wilbanks did not respond to an interview request for further comment.
In a town hall meeting that was streamed live on his Facebook page, Snyder praised the metrics for addressing the rising higher education costs.
“We made a major commitment to education, putting more dollars back to work in education,” he said. “College is too expensive, and that’s a challenging area.”
Though Snyder said the tuition increases this year were favorable measures, he added that he plans to consider further ways of reducing costs that will be effective in the long run. He pointed to encouraging dual enrollment of high school students into college programs as a possible solution.
“If you think about it, if you do enough of that, you could bring down your college costs a lot because you might be able to take a whole year or so off your college — up to a year — and that would mean huge savings,” he said.
During the online event, Snyder also outlined his vision for education in the state. He advocated a plan called P-20, which, unlike the traditional K-12 education, would emphasize achievements from preschool through college.
Mike Boulus, executive director of the Presidents Council, State Universities of Michigan, said Snyder’s budget offered few additional funds in most areas, including higher education.
“This is a pretty lean budget, and there’s very little increase in this budget,” Boulus said.
Boulus said while the Presidents Council welcomes any additional funding to higher education, he believes the hike was minimal.
“This is what I call a small step toward restoration,” Boulos said. “I wouldn’t even call it an increase; I’d call it additional funds. I think that’s an accurate statement to make. The money is one-time money. It’s not there in year two of his budget.”
Boulus added that the governor’s proposed increase is not enough to replace major losses from budget cuts of several state universities in recent years.
“It’s $36 million for higher education — a relatively small amount when you put it in perspective to what we’ve lost in the past decade. We lost $213 million just last year,” Boulos said. “And when you put that on a per-student basis, last year’s cut was $827 on a per-student basis.
Regarding the formula method for higher education funding allocation, Boulus said the metrics should compare state universities relative to their fellow institutions.
“It’s a good investment strategy, and I think the metrics that the governor has selected are fair,” Boulus said. “But it takes a look back on past performance without any measure against peers. I think it can be improved, so that you look at these metrics not just against yourself in past performance but against your peers and progress made over time.”
LSA senior Amanda Caldwell, president of the University’s chapter of College Democrats, said this year’s 3-percent increase does not make up for significant cuts in past years.
“We’ve had cuts after cuts after cuts. It has been way more excessive than 3 percent,” Caldwell said. “It’s moving in the right direction, but we need to make more drastic moves over the next years.”
The University’s chapter of College Republicans could not be reached for comment as of last night.
State Rep. Jeff Irwin (D-Ann Arbor) also noted that the 3-percent increase is not sufficient.
“We know that our universities will really be struggling with the cuts that came down last year, and the state budget is in a position to make up some of those cuts, and 3 percent doesn’t really do it,” Irwin said.
Irwin added that he feels many state legislators are not yet putting a high enough priority on education.
“We know that in Washtenaw County, investing in K through 12 and higher ed. is a good investment for the future,” Irwin said. “And unfortunately, we have had a hard time getting that through to the folks (in the state legislature).”
Irwin said world-renowned Michigan institutions, like the University, may lose their prestige if they continue to suffer from cuts.
“The luster on the crown jewels in our higher ed. system has started to fade,” Irwin said.
If the governor intends to boost the state’s high-tech economy, he should be investing higher education, Irwin said.
“In general, I’m just really confused on how our governor, who brands himself around words like ‘innovation’ and ‘competing for the new economy,’ can turn around and propose bigger cuts to the institutions that actually provide that benefit for people in the state of Michigan,” Irwin said. “Innovation is driven by those institutions.”
—Daily Staff Reporters Aaron Guggenheim, Peter Shahin and Andrew Schulman contributed to this report.