As the university is preparing to tighten its finances, MSU has formally committed to a deal that would freeze state appropriations and limit tuition increases to 8.5 percent this year.
MSU President M. Peter McPherson is sending a letter to Lansing lawmakers, signing the university to Gov. John Engler’s promise not to cut funding to Michigan’s 15 public universities. As part of the promise, schools have to keep tuition increases at or below 8.5 percent or $425, whichever is greater.
Universities originally had until Friday to commit to the deal in writing, but the deadline was extended until Feb. 28.
The letter, dated Feb. 11, said MSU is committed to a long-term policy of tuition restraint and promises to keep tuition and fee increases for in-state undergraduates at or below Engler’s specified rate.
In his State of the University address Tuesday, McPherson said he was pleased with the deal.
“This is in the spirit of the informal covenant of responsibility of our Tuition Guarantee,” McPherson said.
The guarantee, established in 1994, promises to keep tuition increases consistent with the projected rate of inflation as long as state appropriations do the same. A 1.5 percent increase in state appropriations last year led MSU to raise tuition 8.9 percent.
With no increase expected for next year’s budget, the university could have some serious money issues to deal with.
But Fred Poston, vice president for finance and operations, said MSU is in a better-than-average position to deal with economic difficulties.
“We have been quite frugal with dollars,” Poston said. “Over the years, there have been a whole series of things that have been done.”
Poston points to many small-scale issues that have helped MSU manage its funds more efficiently.
The 1999 incorporation of MSU’s bus service with the Capital Area Transportation Authority saved MSU fuel and maintenance money while increasing bus service on campus, Poston said.
MSU also has redistributed more than $20 million of internal funds in the past seven years.
“There are a lot of things you cut down on internally and then you reallocate those dollars,” Poston said. “Those things are never seen by the public.”
But as MSU prepares to look at next year’s budget, union officials have begun to think about the likelihood of layoffs.
“Of course we’re worried,” said Barbara Reeves, president of MSU’s Clerical-Technical Union. “Any time there’s a potential of hurting our members it’s a source of concern.
“It’s terrible that the potential of layoffs exist, but I certainly understand that there are times when an employer has to look at every possibility, no matter how pleasant or not.”
A clause in the union’s contract requires that any layoffs be seniority-based, protecting more experienced members of the organization.
Reeves said jobs may be cut by attrition - retiring workers will not be replaced - but if it comes down to the termination of active employees, the union is more than ready to handle the situation.
“We’re all doing our part, and that includes the unions in trying to keep costs down,” Reeves said. “If (layoffs) come, we’re prepared to make sure they are instituted appropriately.”
