2006–07 budget update


For the past few months we’ve been working hard behind the scenes to formulate a budget for next year, talking frequently and in detail with many different folks, from around the university, in our extended community, and of course downtown at the Capitol.

Our objectives remain the same as they’ve been for the last year—really for the last decade: we’re looking out for the interests of Michigan students and families, focusing on stewardship of increasingly scarce public resources and finding efficiencies. We are committed to our land-grant mission of promoting economic vitality and quality of life here in Michigan. And as global competition increases and the world becomes ever more interconnected, we expand that land-grant mission to “world-grant” as part of our Boldness by Design initiative, announced last fall.

We’ve been sharing information back and forth to keep the community and stakeholders up to speed regarding the circumstances as the budget situation unfolds. But much depends on the level of support that we receive from the state. As the legislative process continues and this year’s appropriation is discussed, we continue to refine our own budget projections in response.

Currently, our understanding is that the Michigan House proposal would raise our appropriation by 3.6 percent; the Senate’s by 2 percent; and the governor’s also by 2 percent.

Budgets for Extension and Experiment Station—MSU’s presence in communities all around Michigan—would remain flat under the governor’s plan and would increase by 2 percent under the Senate plan. The House would increase Experiment station’s funding by 2 percent and Extension’s by 3 percent.

While the increases in any of those plans would represent an improvement over recent years, they still lag inflation for higher education, as measured by the Higher Education Price Index, which totaled 5 percent for the current year. That means that Michigan State will still be challenged to do more with less: innovating to fuel economic development in Michigan (and beyond), as well as preserving student access and success.

Because Michigan’s most recent monthly revenue collections indicate forecasting next year’s revenue collections will continue to be difficult, MSU and all of Michigan’s colleges and universities face additional uncertainty regarding next year’s funding.

Last week, we made a presentation to the MSU Board of Trustees that examines in detail some of the key variables that shape our current outlook and will influence how we set tuition and other costs for the 2006-07 academic year. The chart on page 14 of the presentation is especially helpful in understanding the relationship between the state appropriation and tuition rates.

While the timing of the budget process downtown is never assured, we will continue our process of target-setting and look forward to having a pretty good understanding of what the appropriation will be by the first or second week of July. We would anticipate action on next year’s MSU budget and tuition at that time.

In the meantime we will continue to outline our message and make our case for the value of higher education in promoting the state’s economic vitality and building its future, in particular its research universities and its land-grant university, Michigan State.

We will maintain our focus on our students, making sure that the value of their MSU degree increases over the years. At the same time we also will be taking in the bigger picture, building upon our strength and stature as one of the top 100 universities in the world, and advancing our Boldness by Design initiatives toward our world-grant goals.


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