Battle in Lansing over community colleges expanding 4-year degrees

Cadets in the maritime program at Northwestern Michigan College perform a safety drill. (Photo courtesy of Northwestern Michigan College.)

LANSING — In the long-running policy battle about whether community colleges in Michigan should be allowed to offer bachelor’s degrees, some state lawmakers opposed to the idea are willing to let them do it — if they’ll agree to forfeit revenue they collect from local property taxes.

It’s an ultimatum that advocates for expanded degree choices for two-year schools say will stop the effort dead, because the colleges rely on property taxes for roughly a third of their operating revenue on average.

A two-bill package introduced in the House by Rep. Jeff Farrington, R-Utica, would prevent community colleges from levying property taxes if they create bachelor’s degree programs, with the exception of four programs the Legislature approved in 2012.

Farrington’s bills are in direct response to a separate bill that has stalled in the Senate for more than a year. Introduced by Sen. Mike Shirkey, R-Clarklake, the legislation would allow community colleges to offer bachelor’s degrees in ski area management, allied health, information technology, manufacturing technology and nursing. They would be allowed in addition to the four programs greenlighted in 2012 — cement technology, energy production technology, maritime technology and culinary arts.

The outcome may not be decided this legislative term. Shirkey’s bill hasn’t gone up for a vote in the Senate since it was reported out of committee a year ago, and he said last week that he doesn’t yet have enough votes for passage. And with just 25 days left on the session calendar, there may not be enough time to wrap them up.

Still, the broader policy question isn’t likely to go away.

Of the handful of subject areas Shirkey proposed authorizing in the Senate, nursing is the focal point. Language allowing colleges to offer bachelor’s degrees in nursing was introduced four years ago but taken out on the Senate floor to win necessary votes. Community college administrators say the issue is about improving access — they want to offer more students the opportunity to earn a bachelor’s degree in career-ready fields, especially those who live far from a university or otherwise can’t afford to attend.

Michigan in years past has had a nursing shortage, but community colleges are responding to what they say is a desire from hospitals to employ nurses with higher credentials. Opponents, mainly Michigan’s four-year public and private universities, worry that they will now have to compete with community colleges for students. They point to ongoing partnerships with two-year schools, from holding university classes on community colleges’ campuses to agreements that let students transfer credits.

“I give them credit for wanting to broaden their base and scope, but I just think there’s a line and we finally crossed it,” said Farrington, adding that he attended Macomb Community College before earning degrees from Walsh College. “It filled a void, but that’s a lot different than the next step, which is literally competing.”

Robert LeFevre, president of Michigan Independent Colleges & Universities, which represents nonprofit and private universities, said he believes there would be a “high probability” of a lawsuit challenging Shirkey’s Senate bill if it were to pass.

Said Shirkey of the House legislation: “It’s mostly a gesture of those who are opposed to what I’m trying to accomplish saying, ‘We’ve got to kill this thing.’ ”

A financial matter

In the 2015 fiscal year, property taxes made up 34 percent of community colleges’ operating revenue, according to state financial data compiled for Michigan’s 28 public two-year schools. That year, colleges took in nearly $531.5 million in local dollars, up from nearly $522 million the year before.
Tuition and fees are their largest revenue source, at 41.2 percent last year. State aid makes up much of the rest.

The Senate Fiscal Agency, in an analysis of Shirkey’s bill, said community colleges’ locally elected boards would have to decide whether to cover the extra costs of operating a four-year program by charging higher tuition and fees to all students or just those enrolled in bachelor’s degree programs, or by spreading the costs within the existing budget.

Those financial decisions would be more challenging under the House bills, because colleges “would need to make up one-third of lost revenues or drop the baccalaureate programs,” according to a House Fiscal Agency analysis.

“It would basically cause no community colleges to want to go down that road,” Shirkey said. “It’s a punitive bill intended to be so.”

Daniel Hurley, CEO of the Michigan Association of State Universities, said expanding the mission of community colleges would be an inefficient use of taxpayer resources because Michigan already has 15 public universities that offer bachelor’s degrees. Community colleges doing the same, he said, would be an unnecessary service duplication when collaboration between the two systems could serve students just as well.

To date, only four community colleges offer bachelor’s degrees. They include Schoolcraft College in Livonia, which launched a culinary arts degree program; Northwestern Michigan College in Traverse City, which offers a maritime technology degree; and Jackson College in Jackson County and Lake Michigan College in Berrien County, which both teach energy production technology.

Including Michigan, 23 states have given community colleges some authority to offer bachelor’s degrees, according to the Washington, D.C.-based trade group American Association of Community Colleges and the Education Commission of the States. Just 65 of the more than 1,100 U.S. community colleges offered one in 2014.

The movement toward giving two-year schools more degree-granting authority began in 1989 with West Virginia and continued throughout the 1990s, according to an April 2015 analysis from the Education Commission of the States.

Many states restrict the number and type of degrees to certain programs, and some limit the number of schools that can award them. How it’s done varies by state.

In California, for instance, lawmakers approved a pilot program in 2014 that allows 15 community college districts to offer a single degree program that could meet a specific workforce need, though the program couldn’t also be offered at a nearby state university campus. Florida’s legislature in 2001 limited the number of community colleges that could award four-year degrees; it expanded the program in 2008 but required colleges to get approval from the state board of education and consult with four-year universities.

Schoolcraft College wants to expand its nursing program to award bachelor’s degrees, spokesman Frank Ruggirello said. The two-year program has about 130 students per class, with a wait list.

Schoolcraft this fall will charge $102 per credit hour to in-district students, who live within the jurisdiction of Livonia, Clarenceville, Garden City, Northville, Plymouth-Canton and part of Novi public school systems. Ruggirello said the tuition rate would not increase for nursing students in their third or fourth years of a bachelor’s program; the college also did not increase tuition for students enrolled in its new culinary arts bachelor’s degree program.

“Is the funding issue a lot of political bluster? Probably,” Ruggirello said of the House bills. “If we were allowed to offer bachelor’s degrees, we would be really judicious in the areas we chose to do it.”

Just because they could offer higher degrees, though, doesn’t mean they would: Oakland Community College administrators said the college does not plan to create bachelor’s degree programs because of its proximity to four-year universities, though the concept makes sense in more rural areas.

“First of all, we wouldn’t ask for more state aid, and second of all, there isn’t a lot of state aid to go around,” said Mike Hansen, president of the Michigan Community College Association, which represents all 28 public community colleges.

The budget Gov. Rick Snyder recently signed for the 2017 fiscal year that starts Oct. 1 includes a 1.4 percent funding increase for community colleges, which equates to $4.4 million.

“None of the community colleges yet have gone out and said, ‘We’re offering baccalaureate degrees, so now we have to raise your property tax revenue,’ ” Hansen said.

Hansen said colleges view the programs they want to offer as “occupational degrees,” in demand by employers looking to fill gaps in their workforce. Hospital systems across Michigan are on record supporting the Senate bill, in particular its nursing provision.

Critics argue the language in Shirkey’s legislation is too broad, and that allied health and information technology are vague terms that encompass numerous programs.

“Tell me any college right now — (a) four-year institution — that doesn’t offer information technology,” Farrington said. “We went from a slippery slope to a full-on dive in the pool.”

Constitutional question

Some opponents say the broader policy question is irrelevant because the state constitution doesn’t allow community colleges in their present form to offer any four-year degrees.

The 1963 constitution spells out governance requirements for the state’s three research universities, the University of Michigan, Michigan State University and Wayne State University; for “other institutions of higher education established by law having authority to grant baccalaureate degrees,” generally the state’s other public universities; and for community colleges.

Universities argue that the document calls for higher education institutions allowed to grant bachelor’s degrees to have governor-appointed boards, while community colleges are governed by locally elected boards with oversight from the state board of education. Universities also can’t collect local property taxes.

Opponents say community colleges would have to be subject to the same requirements as other public universities if they want to offer bachelor’s degrees, including dropping their local boards and millages.

“Our position has always been constitutional,” said LeFevre, of the independent colleges association, who added that Farrington’s bill doesn’t go far enough and should also eliminate colleges’ local boards. “The baseline question is can they (offer bachelor’s degrees), and our position is no they cannot, not in their current structure.”

In 2012, Len Wolfe, a Lansing-based attorney with Dykema Gossett PLLC, presented research his firm conducted on behalf of public universities during the first round of bachelor’s degree talks that reviewed the state constitution, convention records, case law and other opinions. His findings were that expanding community colleges’ degree-granting authority would create conflicts related to how colleges are governed and raise concerns about the fate of community colleges and their taxing power.

“It’s a legislative powers case, like a lot of these cases,” said Wolfe, who added that constitutional convention records clearly show “that these were really two different types of schools and that they were complementary to each other.”

Yet the document does not specifically state that community colleges should only be allowed to award associate degrees, Hansen said.

If that were the intent of the framers in 1963, he added, “I don’t know why they didn’t spell it out that way. ”