Thoughts on Michigan’s budget

06-01-2011

The legislature and Governor Rick Snyder are to be applauded for working toward an early agreement for the 2011–12 state budget, an action that projects confidence in state finances. Employers need confidence in the state’s resolve to support their investments with a stable business climate, and citizens need confidence in the state’s ability to support critical functions, including public and higher education.

As I’ve discussed previously, MSU and Michigan’s 14 other public universities must absorb 15 percent cuts in state support, or even more for universities that do not keep tuition increases below 7.1 percent. For MSU that will add up to at least a 25 percent reduction in public support over the past decade, a decade when student enrollments have grown by some 4,000 and the cost of everything from health care to energy has gone up as well. Our population of students needing financial assistance has grown likewise as state support for programs such as the Michigan Promise has been cut.

This isn’t the budget any of us would prefer—not by a long shot. Universities, including MSU, represent a long-running public investment in the state’s future, a set of embedded assets that help maintain Michigan’s world competitiveness irrespective of economic cycles. But we in higher education understand that we must share the burden of creating a more stable fiscal future for Michigan.

State appropriations reductions and the broader economic downturn have affected MSU over the course of many years. Through our “Shaping the Future” initiative we challenged ourselves to reconceptualize every aspect of the organization to maintain our status as one of the world’s leading institutions while adapting to the new economic reality. “Shaping the Future” efforts resulted in significant changes to the academic enterprise, student services, employee compensation and benefits, purchasing and business processes, and others. MSU cut more than 350 full-time equivalent positions over the past two years, while working to improve quality in each institutional function. With employees’ cooperation, we’ve cut and capped health care expense increases and temporarily have frozen salary levels.

Transparency is among our fundamental values. However, the cumulative burden of federal and state reporting requirements on research universities today is staggering. Such requirements, including new ones being imposed by the state with this year’s budget, degrade our competitiveness and represent one of the factors driving the cost of higher education upward.

We are pleased that Governor Snyder will include a one-time appropriation of $1.2 million to cover the state’s share of our federally funded $615 million Facility for Rare Isotope Beams. The state’s modest share of the cost represents an investment in maintaining Michigan’s position as a world leader in nuclear research, one that promises practical technology development and skilled job creation in addition to scientific insight.

We are committed to continuing to work with our broad array of stakeholders to give all Michigan residents access to a world-class education for a 21st-century knowledge economy; to serve residents in every corner of the state with cutting-edge knowledge services; to apply our vast knowledge assets to the problems that confront us; and to bring the best of the world to Michigan while offering the best of Michigan to the world.

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