John Engler served as Michigan governor from 1991-2003 and was appointed interim president of Michigan State University in January
Michigan’s 2018 campaign season is nearing its end, yet there’s been hardly any discussion or debate about how for nearly two decades Michigan has been stepping away from maintaining a vital asset that is far harder to fix than a road.
I’m talking about our public institutions of higher education.
Legislators and a new governor in a few short months will again take up Michigan’s budget, which for years has demanded tuition restraint from the state’s 15 public universities while contributing less support than 15 years ago. Students and families today bear an increasingly heavy burden of the cost of public higher education, one shifted to them by the state at a time when post-high school training or education is more important than ever.
I would appreciate hearing candidates talk about how they would support Michigan’s universities. I want to know how they would recognize and reward actions such as freezing tuition rates.
I spent many years confronting difficult fiscal realities in the Michigan Legislature and the governor’s office. The high priority I assign to higher education as a public good and vital to the state’s global competitiveness is hardly new to my current tenure as interim president of Michigan State University.
Higher education’s share of the state budget has dropped steadily since I was in government, and one Bridge Magazine analysis pointed out that MSU last year received a third less from the state than in fiscal 2002-03, my final budget as governor.
Funding down for universities
Funding for Michigan's public colleges and universities is substantially lower now than in 2000 as Michigan was hit by a long economic decline that took a huge bite out of state tax revenues. Republican John Engler was governor for the first three years shown in this chart, followed by Jennifer Granholm, a Democrat, and Rick Snyder, a Republican. Republicans controlled the legislature throughout except from 2007-2010, when Democrats controlled the state House. All figures are in 2017 dollars.
Sitting among the bottom half of states in educational attainment, Michigan ranks 40th in maintenance of its higher education appropriations over the last decade, lagging the national median by 16 percentage points. If MSU had received appropriations adjustments just at the national average, the university today would have $340 million in additional funding to limit or freeze tuition increases, to fund new programs and to supplement student financial aid.
Among the universities that have complied with the Legislature’s tuition restraint provisions, MSU ranks second to last in percentage change to its appropriations since 2011. MSU’s per-student appropriations today only approximate 1992 levels, which is a loss of about $180 million in inflation-adjusted buying power.
Michigan State’s continuing status as a top 100 global university, which provides exceptional value for the students of Michigan, is validated by the arrival of its latest entering class. MSU proudly welcomed not only the largest new group in its history this fall, but also the most diverse, with a significant increase in African-American enrollment and more women than at any other time in MSU’s history. Additionally, 76 percent of the more than 8,400 entering students are from Michigan.
In order to assist our students in planning for their academic careers and to provide adequate lead time to implement critical institutional changes, the MSU Board of Trustees this summer adopted its first-ever two-year budget. This budget includes a tuition freeze for incoming resident freshmen this year and for all resident undergraduates for the 2019-20 academic year.
Additionally, MSU adopted a block-tuition structure for the 2019-20 academic year, which will encourage students to complete their degrees in four years and, thereby, lessen the cost of securing a college degree.
State institutions that freeze undergraduate tuition and fee rates should be recognized with additional funding. The current performance funding model used to determine annual appropriations eliminates incremental funding for institutions that fail to comply with the state’s tuition restraint provision. Typically, the penalty for non-compliant institutions ranges from 1 percent to 2 percent of annual appropriations. An incentive of similar magnitude for institutions that freeze tuition creates a parallel and balanced approach for encouraging lower tuition and fee rates at the state’s universities.
Lawmakers have long said that higher education needs to demonstrate fiscal responsibility. Michigan State’s efforts include more than $200 million in cost reductions and avoidance over the past 10 years. The university has freed up $68 million in the last five years through improved cash management; saved $50 million with improved purchasing agreements; spared $40 million through conservation and plant efficiencies; and our employee health care cost increases were below national indices seven of the past 10 years.
And as some public entities continue to struggle to pay their obligations for retiree health care, MSU made the decision to eliminate that benefit for new employee dependents in 2005, and for all new hires in 2010. Michigan State shifted to defined-contribution retirement benefits in 1973.
MSU is committed to serving all the people of Michigan, routinely enrolling in excess of 8,800 Pell Grant recipients — more than 22 percent of the undergraduate population. It had almost as many incoming Pell students this year as the entire Ivy League had, and keeps average student debt and the proportion of graduates with debt below state and national averages.
MSU administers more than $700 million in financial aid annually, with more than 65 percent of students receiving some form of assistance. And the generosity of our alumni is helping us bolster student support, with gifts to our current capital campaign totaling enough to fund 3,500 scholarship grants.
Politicians certainly should discuss how to fix broken roads, schools and other public assets before ballots are cast Nov. 6. But voters also deserve to know how state officials plan to support Michigan’s public universities.