Postcard from Michigan: Budget Cuts, Budget Cuts, Budget Cuts for Public Universities

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Mr. Stone is an HNN intern. He lives in Lansing, MI.

Budget cuts remain a consistent sore in the operations and financial aid programs of Michigan's public universities. The recent budget cuts, according to Charles Ballard, an economics professor at Michigan State University, began in 2002 at the start of Democratic governor Jennifer Granholm's administration, but are also a continuation of cuts dating back all the way to the 1960s. Joan Bauer, who represents Michigan's 68th District (located in northern Lansing), said that the recent cuts dating back to F.Y. 2003 are the result of a combination of the declining automobile industry and the financial crisis of 2007-2010. The automobile industry's decline represents a vital hit because the revenue generated through manufacturing encompassed a vast array of funds which helped to cover higher education. In the fiscal year of 2002, not accounting for inflation, higher education appropriations were $1,925.8 million and dropped to $1,855.9 million. By the fiscal year of 2010, they dropped to $1,612.2 million. Overall, this drop in 2010 represented a 16.3 percent cut in higher education appropriations.

The state of Michigan's system of public universities is quite unique when compared to New York or Massachusetts. As Rep. Bauer states, "All fifteen universities are autonomous." Each public university in Michigan has a board of directors that have legal control over the university. Wayne State University, the University of Michigan, and Michigan State University, known as the Big Three, have board members appointed by the state. The other twelve universities, such as Lake Superior State University and Michigan Technical University, have board members appointed by the governor. This autonomy alters the appropriations in higher education. For the fifteen universities, operating funds cover academic programs and university activities while the rest of the funds consist of financial aid. In 2010 alone, $100 million was cut in financial aid, followed by another $80 million. Because of the autonomy of the public universities and stimulus money coming in until 2010, however, the funding for academic programs remained flat while the financial aid from the state of Michigan continued to drop.

To deal with the drastic decrease in financial aid and decrease in operation funds, many universities have turned to their own grants and financial aid programs to attract more students. Professors who had not lost their jobs as a result of reduced funding have either been forced to limit the number of their teaching assistants or have lost the support of their academic programs. Ballard claimed that "the faculty member may end up doing some tasks that previously were done by the teaching assistants." On February 12, 2009, The Michigan Daily reported that the cuts were predicted to lay off fifteen hundred state employees. Some academics and many university workers lost their jobs as a result. In addition, the University of Michigan was predicted to suffer a $9.8 million dollar decline in funding for the university’s General Fund. This cash provides many academic programs with funding. Michigan's deficit budget by the end of 2010, however, is predicted to become $1.4 billion. These cuts were seen as a way to battle the state's budget deficit.

On the other hand, Ballard indicated that Business Leaders for Michigan, a pro-business advocacy group, were interested in cutting even more funding from the public universities. Rep. Bauer felt that the cuts undermined the role of state-funded universities. She believed that the public universities were to help students pay for most of their education. This function existed in the form of government-sponsored financial aid programs. Furthermore, she claimed that the 2010 cut was a drastic blow to financial aid. During the fiscal year of 2010, numerous financial aid programs were cut in an effort to battle Michigan's deficit budget. Nicholas Johnson, Phil Oliff, and Erica Williams of the Center on Budget and Policy Priorities, released a report on May 25, 2010 that showed a reduction in Michigan financial aid programs to the order of $135 million, including decreases in competitive scholarships by 51 percent and 44 percent in tuition cuts. In addition, the State of Michigan eliminated nursing scholarships, work-study, the Part-Time Independent Student Program, Michigan Education Opportunity Grants (such as merit scholarships), and the Michigan Promise Scholarship.

These financial aid cuts proved to involve the greatest reaction from students. In March 2010, three hundred to four hundred students rallied at the Capitol to protest the decreased funding for public colleges and universities. The rally formed not only to combat a recent bill that, at the time, included both cuts to community college and university programs and to the Michigan Promise Scholarships. These scholarships provided grants between $1,000 and $4,000 to help approximately 100,000 students living in the state to pay for college. Students needed those programs due to a $25,000 loan that increases with every tuition hike. In addition, Rep. Bauer claimed that "students felt betrayed and thought that Governor Granholm had broken her promise." This Michigan State University Source of Funding graph, provided by Professor Ballard and the Office of Planning and Budgets at MSU, confirms a long trend between tuition hikes and depreciation of funding:

Figure 1: A strong inverse relationship occurs between tuition and the State of Michigan appropriations.

Rep. Bauer predicts that the fiscal year for 2011-2012 will look very grim indeed, since the State of Michigan has run out of stimulus money. She believes that "if students are not able to pay for the increasing tuition rates and state funded financial aid programs continue to evaporate, then Michigan's public universities will become private universities."

And as Michigan goes, so might go the nation.

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R Poter - 8/5/2010

This is truly awful work. Does anyone remember a company called General Motors, Detroit, Michigan? It is being propped up by $57,000,000,000.00 of taxpayer funds.

Apparently, the writer did not think it relevant that the Michigan auto industry has lost nearly 500,000 good-paying jobs in the last 20 years. In Lansing, Mich., where the writer lives, GM in 1979 employed nearly 28,000, now down to 4,000.

Truly awful and atrocious.

Melvin Small - 8/2/2010

I think author meant to say that the boards of governors of Wayne State, Michigan, and Michigan state are elected by the citizens of Michigan. The other boards are indeed appointed by the governor.