LANSING – As universities announce decisions on tuition increases, they are effectively sending a message to Michigan lawmakers that they need action on the 2007-08 budget and hopefully that budget will include an increase for universities. But it is unclear that message will achieve the results the schools hope to get from the Legislature and Gov. Jennifer Granholm.
Democratic lawmakers on the legislative appropriations higher education subcommittees hope the tuition increases can help create the incentive for lawmakers to increase taxes and to use that increased revenue to boost funding for universities. In so doing, they hope to win agreement from universities to cut back on their tuition increases.
Republicans did not see the tuition increases on their own driving a move towards revenue increases, and weren’t clear what effect the increases would have on the budget that is finally adopted.
But all expressed sympathy that the universities felt the need to boost tuitions by that much, and also expressed some understanding as to why.
The overall legislative attitude towards the increase is striking compared to years past when large tuition boosts were seen as something of a crisis and engendered legislative outrage. In previous years, lawmakers tried to find constitutional ways to block or limit tuition increases. Former Senate Majority Leader Ken Sikkema also attempted to get nominees to university board posts to agree to limit tuition increases.
Now, it’s the universities expressing, if indirectly, displeasure at the state for cutbacks in aid and limited increases. The latest example was the president of Grand Valley State University who flatly said with its current economic problems the state could no longer be seen as a dependable source of revenue to universities.
Granholm, in her 2007-08 budget, called for aid to the universities to be increased by 2.5 percent.
Rep. Pam Brynes (D-Chelsea), chair of the Appropriations Higher Education Subcommittee, said she hopes the see the 2.5 percent increase the House budget contains (HB 4350 , HB 4351 ) sustained as the bills move through the full committee and chamber.
She said it is critical for universities to receive at least a cost of living increase and she applauded Michigan State University’s decision to allow the president to provide rebates if state aid supplants some or all of the tuition hike.
But Byrnes also said that each university has to make that decision for itself. Universities and the state are similar in that they have to balance their budgets with a mix of cuts, reforms and revenues.
Asked if there will be more legislative support for a tax increase as university’s have made these, at times, double digit tuition increase decisions, Byrnes said, “I hope so. I hope people realize there is a direct correlation to decreasing state aid to universities and how that relates to higher tuition. That’s not the direction we should be taking.”
However, Rep. Bill Caul (R-Mt. Pleasant), the minority vice chair of the House panel, said Governor Jennifer Granholm probably didn’t want legislators back in their districts the past two weeks because, at least for him, voters have told him not to raise their taxes.
Caul said he is pleased that Central Michigan University, located in his hometown, has its own tuition Promise program, which has provided stability to students and families. “I would like to see more universities go in that direction.”
But in making its decision this week, officials from CMU are concerned about the future of the Promise, because of the uncertainty of future state aid. Caul said he understands that what happens with state aid certainly plays a part in that questioning, but that a lot of what the public is seeing in terms of increase tuition relates to having the state aid payment delayed from August until October and institutions preparing for that delayed payment not to come to fruition.
Caul said he wants the entire payment reimbursed, but legislators must make the tough decisions on cuts and reforms to meet their obligations.
He argued that the two budgets to pass the House (Corrections and Community Health) are “extremely inflated” with 9 percent gross increases and don’t reflect the real world of what families deal with in their own budgeting. Caul said leadership must provide members with target revenues so they can do their work and approve the budgets.
Caul said he believes a 2.5 percent increase for universities is realistic, but in the same vein the House budget is based on the governors. And Ms. Granholm proposed a budget with a 2 percent sales tax on services – a proposal that is going nowhere, Caul argued, so legislators have their work cut out for them in getting that 2.5 percent funded.
“We need to get our act together in the Legislature,” he said.
Senate members also agreed that the budget has to be resolved and relatively soon. All the members of Appropriations Higher Education Subcommittee interviewed acknowledged that one reason the tuition rates were coming as high as they were was because the budget had not yet been resolved.
“I’m not surprised,” said Sen. Tom George (R-Kalamazoo). “It reflects the overall budget situation.” He also said that the state’s increased expenditures on Medicaid had a major effect on the ability to increase university spending.
And Sen. Glenn Anderson (D-Westland) said: “You can’t put all the blame on the universities. They are responding to our lack of action on the budget.” Adding that his son is attending Michigan State University, Mr. Anderson said while it is tough enough to pay one tuition, “lots of other families will be struggling” as they have to pay for more than one child in school.
Sen. Jim Barcia (D-Bay City) said: “The clock is ticking and we have got to act.”
But Senate members were also less certain that a 2.5 percent increase could be accomplished.
“I’d like to see an increases, but we have to see what the bottom line is on” state revenues and other expenditures before an increase can be calculated, said Sen. Bill Hardiman (R-Kentwood).
If an increase to the universities’ budget is adopted, “will they lower those tuition increases?” he asked.
George said the needs and desires of the universities did not change the basic facts of the budget that the state needed find ways to control spending.
Sen. Liz Brater (D-Ann Arbor) said any increase in the universities’ budget will depend on the revenue the state collects.
Brater said the tuition increases do add to the pressure to raise taxes. If the income tax were raised by .5 percent “the cost to the average Michigan resident would be much less of a hardship than what these tuition increases will cost.”
She also hoped the tuition increases would begin to create a “huge uproar” with the public to boost taxes.
Barcia said if nothing else the tuition increases will show the public that “the state is revenue challenged.”
Anderson said he hoped the tuition increases helped lawmakers realize “we have to look at someway to restore the level of funding for universities.”
Hardiman, however, said he was “not willing to concede” that the tuition hikes called for a tax increase. He didn’t deny it as a possibility but said, “We need to start looking at some serious reforms” before the state considers revenue increases.
George concurred with Hardiman, saying the increases themselves don’t mean a push for a tax boost. And he would only be willing to look at a tax increase if the state had enacted major reforms, including changes to Medicaid as well as to teacher and public employee health insurance, along with other budget cuts.
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