Michigan Looks to Increase Higher Ed Spending for Fourth Year in a Row

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Michigan Governor Rick Snyder will release his 2016 executive budget this week, which will include a proposal for a $28 million increase in state spending for university operations.

The 2% increase will the largest proposed by the governor this year.  If approved, the higher education budget would increase to $1.544 billion next year, with $1.4 billion of that coming from the state’s general fund.

“It’s one of the keys to the future,” said Snyder spokeswoman Sara Wurfel. “So, the governor has made investing in this area a strong priority again.”

Despite the increase, the budget will still not reach the level seen by former Governor Jennifer Granholm.

The higher education budget for fiscal year 2011 was $1.578 billion, which is about $34 million higher than Governor Snyder’s current proposal.  When he first took office, Snyder was faced with a projected budget deficit, causing him to cut government spending, including over $200 million from higher education.

This will be the fourth consecutive year of increased spending for higher education in the state after three years in a row of decreased funding.

As was the case in last year’s higher education budget, universities in Michigan would be eligible for increases in operations funding so long as they meet certain requirements, all of which were included in the budget for fiscal year 2015.  The only difference is a tuition increase cap of 2.8%, down from the 3.2% from fiscal year 2015.

In addition, $26.8 million is available in general fund dollars for performance-based funding for universities in the state.

“We’re continuing with generally the same formula adopted last year, and it’s the fourth year in a row with the same general formula,” Bob Murphy, an analyst in the State Budget Office who specializes in higher education, said of the performance-based funding.  He added, “Both community colleges and universities need clear goals … to know what they’re working toward.”

One proposed reform that is taking center stage for a number of educators in Michigan is the way universities would participate in Michigan Public School Employees Retirement System, or MPSERS.  There are currently 7 universities in the state who participate.

The proposal would place a cap on university spending on the program at 25.73% of payroll, in addition to requiring $2.7 million in additional funding.  Total state payment for the 2016 fiscal year would be $5.2 million and would be similar to the reforms to the program for public school districts, district libraries and community colleges.

“It was a continually increasing cost over which we had no control,”Greg Rosine, vice president for legislative affairs at Western Michigan University, said about retirement costs. “When you’ve got control over a lot of your costs, there are things you can do. We would basically get an appropriation form the state, turn around and pay it right back. Their willingness to work with us over the past year was very welcome.”