Gov. Jennifer Granholm signed into law Friday the final six bills of a budget that showed the wear and tear of a legislature crippled by partisan battles over how to solve the state’s many problems.
For the University, the budget bears bad news on two fronts: eliminating the popular Michigan Promise Scholarship program and once again cutting back state funding provided to the University.
The Michigan Promise Scholarship provides tuition money to more than 96,000 Michigan college students. Performance on a merit exam given in high school determines the amount a student receives, which can total anywhere from $500 to $4,000 over four years.
University spokesman Rick Fitzgerald told the Daily last month that an estimated 6,096 students at the University of Michigan would be eligible for Promise grants this academic year.
These students now have to find another way to fill that gap in their tuition costs.
Phil Hanlon, vice provost for academic and budgetary affairs, told the Daily in late September that, unsure about the Promise Scholarship program’s fate, “the University set aside some one-time funds … to fill these expected financial aid gaps.”
Also in late September, Cynthia Wilbanks, the University’s vice president for government relations, told the Daily that the University would fill that void for students with demonstrated financial aid need if the Promise Scholarship was cut.
“We have committed to meeting the full financial need and we have been prudent in the way we have budgeted so that we will have resources for those students who have the financial need and as of now, do not appear to be receiving the Promise grants,” she said in late September.
Earlier this month, after a letter to state legislators from a business advocacy group encouraging lawmakers to pass a budget proposalthat cut the Promise Scholarship bore her name on the letterhead, University President Mary Sue Coleman issued a statement in which she distanced herself from the recommendation.
She wrote: “It is in the best interests of the state to look to the long term and focus on the highest priorities — including higher education — as we lay the groundwork for the future.”
On that higher education front, the budget signed into law Friday provides $325,347,400 in state appropriations for the University of Michigan in Ann Arbor for the coming fiscal year.
This represents a drop of around .4 percent from last year’s funding, but beat earlier University projections by 2.8 percent. Those projections had estimated state funding to drop to $316,572,000 for fiscal year 2010.
The amount of state funding influences the make-up of the rest of the University’s budget, from the funding of different schools and academic programs to student tuition levels. But officials are quick to note that they have very carefully accounted for potential drops in state funding while crafting budgets in recent years.
Marking a continued reliance on cost cutting and tuition increases to fill the state funding void, state appropriations account for 21.75 percent of revenues in the University’s General Fund budget proposal for fiscal year 2010. In that same budget, tuition and fees account for 65.19 percent.
From fiscal year 2003 to fiscal year 2004, state funding for the University experienced a free fall, plummeting by about 10 percent — or $36,356,600.
Since then, the appropriations have hovered mostly in the $320-$330 million range.
From 1997 to 2009, higher education funding in Michigan had the second-lowest rate of growth in the country. At 17 percent, Michigan was second to last, besting only South Carolina. In that same period of time, the national average of growth in higher education funding was 67 percent, or 5.6 percent per year. Michigan’s funding grew at an average of 1.4 percent per year.
The budget signed into law Friday marked the end of a months-long scramble to make ends meet for a state in historically bad economic shape.
Legislators rushed to fill a $2.8 billion gap before the state’s original Oct. 1 deadline — when its new fiscal year started.
In that dash, Republicans stood by a strategy of cutting state programs, while Democrats looked for ways to increase revenues. With control of the House and Senate split between the two parties, stalemates ensued. They missed the Oct. 1 deadline, and after the state’s government shut down for less than two hours, lawmakers passed a temporary budget that gave them one more month to figure it all out.
For many, the resulting budget is far from a sigh of relief, with deep cuts to schools, Medicaid reimbursements, financial aid to college students and most state departments.
According to The Associated Press, Granholm said in a conference call to reporters that the Republicans in the state Senate “have taken what I think is an extreme position in regard to this budget.”
“The Democrats have compromised,” she said, “the Republicans have not.”
GOP Senate Majority Leader Mike Bishop’s spokesman told The Associated Press that “the budget was passed with bipartisan support,” and that Bishop plans to release a list of ideas for making government and schools more efficient to avoid a panic next year.
Granholm vetoed 75 programs totaling $127 million in cuts, reasoning that “If there was something in the budget that we didn’t have enough money to fund, I vetoed it,” according to The Associated Press.
The new budget includes $44.5 billion in spending, including $1.4 billion in stimulus dollars provided through the American Recovery and Reinvestment Act.