Following statewide elections in which higher education was a point of debate, this article is the first in a series examining the changing landscape of higher education funding in Michigan and what those changes mean for four-year universities.
When current Gov. Rick Snyder (R) assumed office in 2011, his administration cut 15 percent from higher education funding.
Snyder then began a series of incremental increases to higher education for each subsequent year — a 3.1-percent raise in 2012, a 2.2-percent raise in 2013, a 6.1-percent raise in 2014 and a 2-percent raise in 2015 — though the final dollar amount still remains lower than it was when he took office.
However, much before Snyder, under Republican and Democratic governors alike, higher education has seen both heavy fluctuations and a pattern of cuts.
In interviews, state higher education officials and legislators said past few years’ increases, are promising, but a long-term problem still remains.
Significant cuts to higher education started in the late 1970s and early 1980s due to a recession in Michigan, according to Stephen DesJardins, professor of education and public policy. DesJardins wrote “Michigan Public Higher Education: Recent Trends and Policy Considerations for the Coming Decade,” published in 2006.
Under former Gov. James Blanchard (D), public universities saw an increase in state appropriations in the mid-1980s. According to DesJardins, Blanchard believed that a postsecondary education would stimulate both economic growth and development.
After Blanchard finished his term as governor, former Gov. John Engler (R) assumed office in 1991, and the state started to struggle with funding higher education, though DesJardins noted that Engler still managed to increase student financial aid.
At the conclusion of Engler’s years as governor, former Gov. Jennifer Granholm (D) was elected in 2003. Granholm cut higher education funding to balance the state budget, continuing a downward path.
The main impact of this trend can be viewed in the balance between tuition and state appropriations in University budgets.
In the 1970s, the state used to pay approximately 75 percent of public universities’ operations, while the universities’ tuition and fees would pay for the rest, said Mark Burnham, Michigan State University’s vice president for governmental affairs.
However, Burnham said the trend has now reversed, and MSU’s funding from the state is now below 22 percent.
This situation is similar at the University, as 71.2 percent of the University’s budget came from tuition and fees for the 2015 fiscal year, according to the University’s Funding Snapshot. The state contributed 16.4 percent of the University’s budget this year. These state appropriations are a continuation of a downward trend, as state appropriations were around 59 percent in 1978, but fell to 32 percent in 2002, according to DesJardins’s research.
“The amount of state support has eroded dramatically,” Burnham said.
In an interview last month, Cynthia Wilbanks, the University’s vice president for government relations, said the state’s economic conditions were challenging from 2002 to 2011, which was when Granholm held’s the governor’s office.
She said she would argue that at times, areas identified as a priority for gubernatorial administrations have to be abandoned based on factors such as poor economic conditions.
“I would make the case that each governor has to have their set of priorities and wants to hold themselves to those priorities unless or until other factors that they simply can not control really force decisions that may not be their favorite thing to do,” Wilbanks said.
During Granholm’s early years as governor, about 26 percent of the population in the age range 25 to 34 in Michigan received a bachelor’s degree or higher, which was below the national average of 28 percent for the same age range. However, DesJardins wrote this phenomenon should not have been surprising because many high school graduates went to manufacturing jobs, which provided a high standard of living compared to jobs in other states not requiring a college degree.
“The days of (manufacturing jobs) being a viable option are virtually gone, as the auto industry continues to lose market share to foreign competition, with it the jobs that provided an avenue to the middle class for a generation (or more) of Michigan’s citizens,” DesJardins wrote.
Along with drawing high school students straight to the workforce, the automotive industry also affected higher education funding.
Because the “Big Three” automakers — Ford, General Motors and Chrysler — provided approximately 80 percent of the cars in the world market in 1950, the state of Michigan’s tax base was heavily dependent on the automotive industry, according to DesJardins.
As time progressed, the Detroit automobile industry’s share of the world market fell below 25 percent and Michigan’s tax revenue suffered. As a result, he wrote, higher education funding was targeted and cut.
Wilbanks said economic activity clearly affects higher education funding.
“As much as higher education support comes from the state’s General Fund, and the General Fund is almost entirely from revenues that are based on economic activity, when the economic activity of the state is either declining or anemic, the opportunity to fund at a high level, some state priorities is really the $64,000 question,” she said.
Echoing the trends observed by DesJardins, in an interview earlier this month, state Rep. Adam Zemke (D–Ann Arbor) emphasized that higher education cuts aren’t exclusive to the Snyder administration.
He said past legislators and governors are also to blame for the common trend of cutting higher education.
“The higher education funding problems, meaning the lack of adequate funding, is an issue that has transcended gubernatorial administrations,” Zemke said.
Most recently, over the decade from 2004 to 2014, the state’s support for higher education decreased by 29 percent, according to the think tank the Center for Michigan.
John Austin, president of the State Board of Education, said this decrease amounts to approximately $800 million.
Along with this data, the National Association of State Student Grant and Aid Programs recently released an annual report which revealed Michigan as the worst state in the country in regards to the state spending money for financial aid over the decade from 2003 to 2013. In fiscal 2003, the state spent $218.185 million on college scholarships. Fast forward 10 years and the state spent $92.674 million in the fiscal 2013, which represents a $125.511 million decrease.
Austin said he recognized the increases made to higher education funding the past few years, but added that it will be hard to recover from the series of cuts.
“It’s beginning to get some attention, but it’s been severely damaged and has a long way to go before we’re arriving at enough aid to reverse some of the damage and support for institutions,” Austin said. “The damage has been done.”
Similar to Austin’s viewpoint, Zemke said the increases to higher education are a positive sign, but clarified that these increases won’t make a big impact in the long run. Zemke is the vice chair of the House’s education committee.
“I’m glad that it’s an increase, but I think that we’re still going to run into the same problem that we’ve been running into,” Zemke said, referencing a lack of long-term planning.
Burnham said MSU cuts approximately $110 million per year on a recurring basis due to cuts. Burnham added that these cuts led to the termination of more than 40 academic programs at MSU, which had long-term impacts beyond an individual year.
“If we’re going to continue to be a competitive institution that provides a quality education that makes students who graduate here world class, competitive anywhere in the world, then you have to have the faculty and facilities that are needed to do that,” Burnham said.
At the University, cuts were similar. In response to the 2011 decrease in funding, several academic programs, including the Center for Ethics in Public Life, were closed. In recent years, the University has launched several cost-cutting initiatives such as strategic sourcing — purchasing supplies and equipment in bulk — and the Administrative Services Transformation Project, which included an initiative to congregate some support staff in a shared service center.
The University has also increased its development efforts to compensate for smaller state appropriations. The current campaign, Victors for Michigan, is aiming to raise $4 billion over the next several years.
Austin said overall, he didn’t feel the state of Michigan had a long-term plan for the future of higher education funding.
“There is no strategy,” he said. “It’s just some incremental change up or down of what we’ve already done.”
In an e-mail interview, Dave Murray, Snyder’s deputy press secretary, refuted the idea that Snyder doesn’t have a long-term plan for maintaining higher education funding.
“Gov. Snyder’s goal is to increase the state’s investment in higher education, and to make sure a college education is within reach for all Michiganders,” Murray wrote. “The governor’s goal is for 60 percent of residents to hold a high-quality degree or other credential by 2025.”
Correction appended: John Austin, president of the State Board of Education, was referencing the state, not specifically the Snyder administration, in his comment about lack of strategy and incremental changes.