Legislators want to run, not pay for, Mich. universities

Spring budget treks to the State Capitol by the presidents of Michigan’s public universities weren’t always this pointless.

When lawmakers appropriated half the money or more that universities spent for operations, it paid for presidents to express gratitude to the veteran legislators whose long careers were built on protecting the interests of their favored (hometown) campuses, but also of higher education generally.

Vestiges of that era remain. It’s no accident that Northern Michigan University, beneficiary of Dominic Jacobetti’s four decades in the House, still receives $2,100 more in per-student state aid in 2012 than Grand Valley State University, 18 years after “The Godfather” from Negaunee died in office.

The $2,365 per-student GVSU receives is the fourth lowest, President Thomas Haas reminded House appropriators this month, some of whom have been in office fewer than 18 months. Fourth lowest in Michigan? Nope. Fourth lowest in the nation. At $52.7 million, GVSU’s state aid covers about 17 percent of the annual operating budget.  

Repairing the fiscal damage, if that indeed is going to be the aim, apparently is going to take some time. Gov. Rick Snyder has thrown $36 million in one-time “performance” funding into the pot to encourage the schools to award more degrees more quickly -- in areas of science and technology the state's economy would benefit from.

The Senate’s version reported out of subcommittee last Thursday, the most logical approach, would spread half of the increase without strings. Another $9 million would go to schools that hold tuition to under 3.5 percent. The other $9 million would be based on how schools perform on degree completion, compared not to each other but to peer institutions nationwide.

The House bill is another matter entirely and illustrates one of the larger problems with higher ed funding inMichigan: The less money the Legislature provides, the more influence the Legislature believes it should have over the higher education mission.

That’s kind of the opposite of what sections 4, 5 and 6 of Article VIII of the Michigan Constitution say about the Legislature’s requirement to appropriate money to “maintain” (defined in the dictionary as "to keep in a condition of good repair or efficiency," Haas reminded lawmakers) the four-year universities. And to leave the supervision as to how it’s spent to appointed or elected university governing boards.

Not to be punitive or anything, but the University of Michigan and Michigan State University would receive no increase in state aid if they don’t alter policies Republicans on the House Appropriations Subcommittee on Higher Education object to.

In U-M’s case, Republicans want more detailed reporting on embryonic stem-cell research than the university provided per last year's instructions, which Snyder said were unconstitutional. Irked that the two schools are "thumbing their noses" at the subcommittee’s demands, they also are insisting that MSU scrap its new requirement that full-time undergraduates have health insurance.

Any of the 15 schools that don’t abide by the House’s specific tuition limits would be similarly penalized. MSU’s 2013 tuition limit is zero as the House continues to insist that last year's cap was busted. U-M’s is 2.8 percent. The others average out to about 5 percent. Both international universities no doubt will adjust their out-of-state enrollment accordingly.

For all the talk of metrics and performance, the Legislature doesn’t much concern itself with its own performance in assuring university access and degree completion. Nor do lawmakers seem particularly motivated to improve upon it.

A decade ago, state appropriations funded about half of university operating budgets. In 2012, it’s 22 percent. At some schools like Ferris State University, it’s less than 15 percent. State aid per student exceeded $6,700 in fiscal 2002 when the state appropriated $1.65 billion for university operations. In the current year, a $1.2 billion budget provides just $4,600 per student.

Don’t forget that the Michigan Promise scholarship inexplicably axed by former Gov. Jennifer Granholm provided $4,000 per qualifying student for the first two years of college. Haas told the House committee that tuition at his school would be $3,000 less this year had the state simply been able to maintain Fiscal 2002 funding levels.

Doug Rothwell at the Business Leaders forMichigan wants lawmakers to get on a path of boosting state aid by $1 billion annually over the next 10 years. A start on how to pay for it would maintain the state’s current income tax rate of 4.35 percent. Rep. Joan Bauer, D-Lansing, suggested a variation on that last Friday, but was shot down.

As most of the university presidents who testified last month pointed out, accountability is a two-way street given the relationship between tuition and state aid effort. While Snyder and lawmakers are properly concerned with ensuring that students are able to earn a degree in six years' time, the present focus on that outcome conveniently ignores the rising cost of doing so -- a cost inflated by lawmakers themselves.

That the state now professes to be looking out for the best interests of students is pretty rich given budget policy that has more than doubled their price of attendance since 10 years of cutting began. All those who want to rectify those cuts have to do is explain where the money's going to come from to do it.

Peter Luke was a Lansing correspondent for Booth Newspapers for nearly 25 years, writing a weekly column for most of that time with a concentration on budget, tax and economic development policy issues. He is a graduate of Central Michigan University.


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Thu, 04/05/2012 - 9:50am
While I will certainly agree the state has failed in its responsibility in funding higher education, our Constitution is a hinderance to any true cost controls. That is unfortunate, because we tax payers are footing the bill. These university presidents think the Legislature should just fork over the money with no questions asked. And our Constitution reinforces that. Our university system is nothing of the sort, it is 15 independantly functioning units. It should act as a system. Do we really need to graduate 4 times as many teachers as there are jobs for teachers in this state. We had 4 strong medical schools in this state, did we really need to add three more, especially with no additional funding for more residencies in this state, the real marker of doctors staying in Michigan. So the Legislature has every right to challenge the college presidents on how they spend their money, even though their approach is a bit like a bull in a china shop. As a parent of a college student, I really feel the lack of state funding in my pocket. But the answer to our college woes is not just to hand over more money. More money is needed, but so are cost controls and reform of the educational offerings of the universities.
Thu, 04/05/2012 - 3:57pm
I think the independence of these schools from the whims of our governors and legislators is the primary reason they're as good as they are. Michigan and Michigan State are world renowned research schools and I think that's due in no small measure to the wisdom of the people who authored our Michigan Constitution. What's changed about these schools is not their quality, I think that improves every year. A measure of this quality is the huge worldwide number of high school seniors who apply for freshman slots at MSU and UM this year and every year. What's changed is the funding: Michigan taxpayers no longer want to fund higher education at the level they once did and this is well reflected in the actions of our legislature. Distribution of state tax revenue is a zero sum game: what's added to one budget items is taken from another. If the state reformed our failed state criminal justice system and diverted the incredible waste of tax dollars to higher education, our higher ed system would be well funded. If our lawmakers really wanted to do some good in an area where our constitution actually gives them the authority and responsibility to govern, MDOC is the place to look. As for cost controls at our universities -- We've elected board members to deal with this at Michigan, Michigan State and Wayne State. If you don't like the decisions they make, then help elect board members who agree with you. As for appointed board members at the other 12 schools, talk to your legislators about who you want appointed or removed. The absolute last thing we need is for our legislators and our governor to interfere in the governance of these schools: they don't have the authority, the responsibility nor the wisdom to do this, and the only thing they'll accomplish is harm.
Howard Wetters
Thu, 04/05/2012 - 10:44am
Nice article Pete. All too true. If you dip back further into the state's past funding you will find that back when I attended MSU (75) the state picked up between 60% and 70% of the cost of my education. I and my peers could get a good summer job and come close to paying for a year of college. Now students graduate with on average $25,000 in debt. The Governor can talk all he wants about the importance of education, but as my father used to remind me," follow the money." Education is the key to the economic future. Let's recognoze that with money and make all higher ed expenses 100% tax deductable on state income tax. Why shouldn't we recognize students investments in their future as an investment in Michigan's future as well?
Thu, 04/05/2012 - 11:12am
The idea of our state legislators directing Michigan universities is laughable but almost as funny as the job Michigan's universities have done managing their own cost/value structures. Under the current paradigm you can really expect legislators to keep handing over taxpayer bucks without influence or questions being asked? The only way around this is to funnel the aid to the students allowing them to make the decision based on their own criteria. But them you must ask how good of a value is it for our state to create degrees with no job prospects or even highly demanded degrees where the graduates leave the state for greener pastures elsewhere? Without these issues fixed we're still spending too much.
Thu, 04/05/2012 - 5:00pm
Matt -- I agree with you regarding grants to Michigan students offset by reducing direct appropriation to universities and community colleges. Moreover, it would be manageable and maybe desirable to attach incentives to these grants that would benefit the state as whole. Maybe bonuses are given for graduation and/or good performance on standardized grad school admittance tests. Maybe more is given to a grad student than an undergrad. Maybe bonuses are given to students who work in the state for some number of years after graduation. The system would probably foster some competition among our colleges since it would basically be a voucher system. The system would be more egalitarian, perhaps eliminating funding preferences for students at one school over another. For example, if an English class at a community college covered the exact same material as an English class at UM, then both students should logically receive the same grant amount: the difference being that the grant might cover 100% of the tuition at the community college but considerably less of the tuition at UM. I think, however, there would have to be a tradeoff. If direct appropriations to universities and community colleges were set to zero, then we shouldn't expect these schools to give tuition breaks or admission preference to in-state students. I've often thought that Michigan and maybe Michigan State would be better off if they forgo state funding completely and get all their funding from a world base of students, alumni and research investors instead of state government. Based on their combined 75,000 and growing freshman admittance applications, this seems feasible.
Fri, 04/06/2012 - 9:51am
I would have to question if we really care where someone went to school as long as they are a contributing part of Michigan's economy. I see no disadvantage if someone goes for schoolimg of whatever or where ever sort and locates in Michigan afterward. I would suggest an extended tax credit that could be used as one enters their career and i'd bag the direct funding of universities.
Thu, 04/05/2012 - 1:34pm
Thank you for this important information. The state universities have been blamed for rising tuition costs when a significant portion of the rising costs is due to the State's withdrawal of funding. We are dumping massive debt on students and their parents. People complain about increases in taxes when a parent and student attending a state university are shoudering $15,000+/year in increased costs due to the State's short sighted focus on low taxes. Howard - I agree with your comment but would add that while "students" may be leaving with $25,000 in debt, their parents are left with another $60,000 in additonal parent student loans (PLUS). This larger amount is often left out of stats on educational loan debt!
J A Reyes
Fri, 04/06/2012 - 10:15pm
Unfortunately, the legislators are as ignorant as the voters who elected them. Instead of trying to move the state forward, they are desperately trying to move the state backwards. They are taking their cues from the Mackinac Policy Center and the governor, instead of showing some backbone, is merely approving the agenda. Michigan needs more educated people not less, if it hopes to amount to anything. But as long as the electorate allows itself to be led by greedy lobbyists, who use television ads to sway them, we won't amount to anything. I'm not terribly optimistic.
Mon, 04/09/2012 - 1:57pm
so you assume college means intelligent?
Jay Larson
Wed, 04/18/2012 - 7:24pm
I attended the University of Washington from 1962 until 1970 receiving four degrees including a Ph.D. in Material Science and half my MBA. My total in state cost was $2700 for tuition. My four children all attended and received their degrees from public Michigan Universities and paid more than this amount for every single quarter or semester. Our universities must make higher education more cost effective by truly cutting overhead not simply raising tuition. I would suggest that outside consultants be used to do this effectively.