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MSU in compliance with state's tuition restraints; maintains state funding

July 28, 2011

In a move that defied the expectations of some House Republicans, Michigan Budget Director John Nixon announced Thursday afternoon that MSU will not lose additional funding as a result of the school’s disputed tuition increase.

“We are pleased that the administration has confirmed that MSU is in compliance with the tuition restraint language,” university spokesman Kent Cassella said in a statement. “We look forward to working with the administration and the Legislature as we strive to improve higher education for all.”

Nixon said in a letter to MSU President Lou Anna K. Simon that he found the school to be in compliance with the state’s tuition restraint language, after the MSU Board of Trustees voted to increase tuition 6.9 percent for this fall.

The state had set a tuition increase ceiling of 7.1 percent for state universities, with language specifically targeting schools that exceeded the threshold.

In the document, Nixon said MSU will receive its full allotment of $18.3 million, funding that had been in danger of being cut by the state as recently as last week.

The ruling comes after a tense span of seven days that followed back-and-forth testimony from MSU officials in front of a House higher education appropriations subcommittee.

Members of the committee — led by chair Rep. Bob Genetski, R-Saugatuck — bombarded school officials with pointed questions at the hearing, accusing the school’s administration of manipulating the definition of the academic year calendar in an attempt to thwart state lawmakers’ plans to cap tuition.

Committee members also claimed the school’s Board of Trustees displayed a lack of awareness about the state’s tuition restraint language.

Genetski expressed anger and frustration at what he called an attempt by MSU officials to deceive state lawmakers.

“I feel a little hurt with all the (officials) at MSU, that they were used to find a legal loophole, so they could basically stretch the law,” he said.

MSU vice president for governmental affairs Mark Burnham and others previously had maintained the disputed increase stemmed from calculation errors in a House Fiscal Agency report issued earlier this month. That report claimed MSU’s tuition will jump 9.4 percent over last year’s rates, not the increase voted on earlier this summer by the school.

Under fire from the state, Burnham maintained the discrepancy came from a 2.4 percent rebate the school issued to MSU students last fall, a figure that he says accidentally was included in calculations made by the Higher Education Institutional Data Inventory, or HEIDI, as part of the report.

Had MSU lost the funding, the university would have absorbed a total hit of more than $60 million from the state this year alone, something school officials hadn’t accounted for in budget documents or preparations. It also remains unclear what the university might have done in light of the unexpected funding cuts.

Burnham and MSU CFO and assistant vice president for business Mark Haas struggled to answer questions on that matter last week, yet said a re-evaluation of tuition rates might be in order.
MSU Trustee Mitch Lyons said he was pleased with Nixon’s decision.

“I wasn’t too concerned about it,” he said. “We were pretty sure that this was what the administration would come back with.”

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