Preserving quality, ensuring value provides framework for MSU's 2007-08 budget


My State of the University address, delivered in February, was titled “Boldness in a Time of Challenge.” I refer to that speech because today Michigan State University’s trustees faced challenging times with bold action.

Today, MSU’s trustees voted to preserve and build upon the university’s value for the people of Michigan and the world. To help offset a 1.8 percent anticipated decrease in state appropriations, the $876 million 2007-08 general fund budget approved by the trustees includes a 9.6 percent across-the-board tuition increase covering both undergraduate and graduate students.

As a further protection of quality, the board action provided a way to adjust tuition and fees during the 2007-08 academic year should state appropriations for the next fiscal year be inadequate to support the budget or should deferred payments not be paid in a timely way. Please see for additional details on the 2007-08 budget and tuition and fees.

In taking this action, MSU’s Board of Trustees carefully considered the university’s current and future value and how best to preserve that value. MSU’s budget framework is strategic, and it is both evidence-based and values-based in nature. It demands sustainability. The university has worked diligently over time to contain costs, operate efficiently, keep student costs in check, and provide financial aid for students in need, all while maintaining world-class quality.

Every day, Michigan State’s work in Michigan and beyond makes life better for millions of people. Through research, education, and outreach, MSU fuels the economy, creates opportunity, solves real-world problems, fosters entrepreneurship, sustains the arts, and prepares creative thinkers for tomorrow’s knowledge economy.

The university has an economic impact of more than $3 billion annually, makes Michigan residents about $2 million dollars richer each year as a result of operational expenditures, and provides R&D for Michigan’s $60 billion agricultural sector. Over the last three years, MSU has spawned 26 spin-off businesses and has assisted in the start-up of another 60 firms. To address the state’s health care needs, MSU has expanded nursing enrollment more than 40 percent in the last five years, is increasing capacity to prepare doctors by 500 slots over the next few years, and is active in 57 affiliated hospitals located proximate to more than 70 percent of the state’s population.

MSU enrolls nearly 16 percent of all students attending public four-year colleges and universities in Michigan, and nearly 89 percent of our undergraduates are Michigan residents. More than 225,000 MSU graduates live and work in Michigan, providing an educated workforce prepared for new economy jobs. With MSU Extension offices across the state and hundreds of community-based projects, the university is active in every county in Michigan.

In “Boldness in a Time of Challenge,” I stated that MSU’s “added value” is the ultimate test of our worth. “What value do we add to our students’ lives?” I asked. “What value do we add to Michigan? What value do we add to the world? That is the test of who we are.”

Michigan State is one of the top 100 research universities in the world and a premier land-grant institution. For Michigan—its people and its future—we are an essential resource and asset. With our land-grant roots and ideals, “value” has meant and must continue to mean the intersection of affordability and quality. Neither must be sacrificed.

The following points provide some important context for this year’s budget development and tuition and fee increase. More detailed information is available at

  • Student costs: MSU ranks fourth among all Michigan public universities and seventh in the Big Ten in overall cost of attendance for resident students (2006-07). MSU’s tuition policy has resulted in significant savings for Michigan citizens over the past 14 years: more than $30 million when compared to other Michigan public institutions and more than $60 million when compared to other Big Ten institutions.
  • Financial aid: MSU has maintained a consistent number and family income distribution of students receiving financial aid over the past five years, despite increasing financial pressures, through careful management and maintenance of programs and policies, including the Spartan Advantage Program and regular financial aid increases in excess of tuition increases.
  • Revenues: MSU’s annual operating revenue from tuition, fees, and appropriations is about $80 million less than the average for the Big Ten.
  • Appropriation: Over the past five years, 44 states provided greater increases to higher education than did Michigan, and this ranking has been similarly low in all recent years.
  • Resource allocation and efficiency: MSU is dedicated to focusing its resources on students and faculty. MSU exceeds the Big Ten average by 6 percent in both instruction and public service expenditures, and 60 percent of total expenditures go directly to programmatic areas, a number 12 percent above the Big Ten average.
  • Cost containment: The university’s cost containment is exemplary. MSU has the lowest energy consumption per square foot in the Big Ten, has attained below average health care cost increases in four of the past five years, and has reduced maintenance costs through a unique “just-in-time” predictive model. In addition, MSU has eliminated or combined a number of academic colleges and degree programs and their support functions to generate savings.

Much of this context tells you how MSU works every day to achieve good stewardship. This concept is so important to us—and, we believe, to excellence—that Strengthening Stewardship is one of the five imperatives of the university’s strategic positioning effort, Boldness by Design. By giving stewardship this degree of emphasis, we never forget that seeking to do more with less is among our core commitments and continuing endeavors.

Yet, we must also recognize that quality and forward momentum demand not only extraordinary stewardship but, ultimately, investment. World-class research requires adequate laboratory space and equipment. Information technology needs and costs, both for administration and for the academic enterprise, are substantial. And attracting and retaining top faculty to drive innovation, prepare students for the future, and attract research dollars to Michigan is essential.

Michigan must invest more in higher education. The state must see its world-class research universities as critical catalysts to a brighter future. For our students, who will forge that future, investing in a college degree will literally yield more than a million dollars more in income over a lifetime than a high school degree alone. But more importantly, it will be a passport to leadership, challenge, personal fulfillment, and making a difference.


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