Under an agreement reached last week between Gov. Jennifer Granholm and the state Legislature, the combined budget allocation for Michigan’s 15 universities and colleges for the next fiscal year was set at $1.48 billion. The allocation marks an increase from Granholm’s proposed budget this past February, but University of Michigan officials say the school will still receive $4 million less than last year’s original allocation.

Under the agreement, the University’s Ann Arbor campus will receive an allocation of $316.3 million from the state. The budget for 2006 that the University Board of Regents passed in July was based on Granholm’s original funding proposal, which would have provided the Ann Arbor campus with $314 million from the state. While the recent agreement calls for an increase over Granholm’s proposal, it still marks a decrease from the funiding level the University received from the state last year.

The additional $2 million comes from a funding allocation of $2.5 million to be divided among the state colleges. Granholm proposed the allocation in order to keep state aid for higher education at the same level as it is in the current fiscal year.

Additionally, the Senate-proposed floor funding program would ensure that most schools would receive at least $3,650 per student, and a funding model, conceived by the House Fiscal Agency, would determine how much funding is received based on enrollment, degrees given and research grants received from the federal government.

State Budget Office spokesman Greg Bird said availability of new revenues from sales of parcels of land and additional enforcement of tax laws made the increase from Granholm’s original proposal in February possible. “The governor’s big push all along was to ensure that no university received a cut. (Granholm) was adamant that universities’ funding may be maintained or increased, but not cut,” Bird said.

In addition to the $561,200 received from Granholm’s allocation of $2.5 million to higher education, the University will also receive $776,400 as part of the state House funding model and will continue to receive the $8,104 per student it received this fiscal year. As a result, the state will allocate a total of $316.3 million to the University for the next fiscal year. State officials say they see this allocation as an increase over this year’s allocation because of a mid-year cut from the state.

But University officials view this allocation as a decrease from this year’s original allocation of $320.6 million. University spokeswoman Julie Peterson said while the original allocation for the current fiscal year was $320.6 million, in the middle of the year it was decreased to $315 million and then restored to approximately $318 million by the end of the fiscal year.

While state officials compare the allocation for the next fiscal year to the $315 million figure and see an increase of 0.4 percent, University officials insist that this new allocation is actually a 1.3-percent decrease from this year’s original allocation.

“If you look from one year to the next, our base appropriation has been declining four years in a row,” Peterson said. “It’s important for people to see that big picture – this is part of an ongoing series of cuts.”

Former University Provost Paul Courant commented on the budget allocation in a presentation to the University Board of Regents in July:

“Another perspective on the past four years comes from comparing the state appropriation with what it would have been had it merely kept pace with inflation in consumer prices. In 2002, the appropriation was $363 million. Had it kept pace with inflation, in 2006 it would be $396 million,” he said.

At a regents meeting last Thursday, University President Mary Sue Coleman commented on the decrease in funding: “This is about what we expected, and what we planned for in the University budgeting process this year. Of course, my hope is that there will be some progress toward more predictable and robust levels of support in the future. “This continues to be a challenging situation,” Coleman said.

Peterson said there is no chance of a cancellation of the approximately $1,000 tuition hike approved by the regents in July.

While the Senate’s floor-funding plan would not affect the University, which already receives $8,104 per student, Universities such as Grand Valley, Oakland and Saginaw Valley would receive more funding in the hopes of lessening the disparity between appropriations for different colleges in Michigan.

Senator Mike Goschka (R-Brandt), a member of the Senate Appropriations Higher Education Subcommittee, said the original difference between schools that were well funded and schools that weren’t was unacceptable. “We felt it was important to say that regardless of where you go to school in this state there should be a minimum amount of state dollars that would go to support any of our 15 public universities,” Goschka said. During the current fiscal year, Wayne State University receives $8,665 per student while Grand Valley receives $3,072.

University Vice President for Government Relations Cynthia Wilbanks said the state government has been working hard to support higher education.

“This is the fourth year that the state has been struggling vitally with an economic downturn, and there are realities that are associated with that,” she said. “I do think the governor is completely aware of the importance of higher education. It’s the stress and strain of the economic conditions that don’t allow for a better outcome.”


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