Steve Webster, MSU vice president for governmental affairs, said he is not worried the budget shortfall will affect the university.
“To a great extent, this slowdown in the Michigan economy was anticipated at the start of this year and, as a result, the university appropriations was set at 0 percent,” Webster said of the deal cut between the state and the university.
According to the agreement, the state will exchange no budget cuts for no tuition increases more than 8.5 percent or $425, whichever is greater, for each of Michigan’s 15 public universities.
The MSU Board of Trustees voted May 10 to raise tuition 8.5 percent for the 2002-2003 fiscal year. University officials say they hope 8.5 percent is the highest increases reach.
But trustees say if the state breaks its end of the deal and makes higher education budget cuts, a higher increase may be necessary.
“This really has been widely anticipated and planned for,” Webster said.
Trustee Joel Ferguson doesn’t believe any of the fiscal agency’s predictions deserve a second thought.
“They haven’t told us anything,” Ferguson said. “It’s all guess work. They haven’t said there are going to be adjustments in the higher education budget. They might make other adjustments in different directions.
“We just don’t know at this point, and there’s no point in speculating.”
Webster said all the university can do at this point is sit and wait.
“We continue to monitor state appropriations and hope that the situation brightens,” he said. “We just hope it brightens before further reduction.”
Rep. David Mead, R-Frankfort, vice chairman of the House Appropriations Higher Education Subcommittee, said it’s too early to determine what the state might do to compensate for the drop. Mead said he just hopes both the state and university stay true to their deal.
“We’re just analyzing reports and economic forecasts as much as possible at this time,” Mead said. “In my opinion, we’ve already signed a bill into effect, and hopefully both sides can stick to that.”
Kelly Chesney, spokeswoman for the Department of Management and Budget, attributed the drop to lower income tax payments and larger refunds.
Along with this year’s revenue being down, the Senate Fiscal Agency estimates next year’s general fund money to be less than earlier projections by $320 million.
After these revenue losses, the deficit for 2001-02 is an estimated $368 million, which would violate state constitution, which requires a balanced budget. Michigan lawmakers will have five months to rectify the deficit before the fiscal year ends Sept. 30.
Rep. Gretchen Whitmer, D-East Lansing, also serves on the House Appropriations Higher Education Subcommittee. She is unsure how these budget problems will affect the state and the budget.
“The magnitude of this budget deficit is going to impact probably every item of government across the board,” Whitmer said. “While we’ve got a decent higher ed budget in place, when you run up a deficit this large, there’s no telling whether it will hold.”
Katie Byrne can be reached at byrnecat@msu.edu.
