Lansing - MSU officials braced for deep budget cuts Thursday after Gov. John Engler handed down an executive order immediately reducing state spending by $337.4 million - including a possible cut of $8.1 million for MSU.
MSU President M. Peter McPherson said the university was prepared for the cuts and will continue to look for ways to save money, but university officials say a tuition increase for spring semester most likely won't be one of those avenues.
"It will be hard, no question," McPherson said. "A 2-percent cut is a 4 percent cut because it's halfway through the year. We'll work with it. We've been worried about next year, too.
"It's clear there's going to be problems in the future."
A $2 million sum might have been spared for MSU when state Sen. John Schwarz, R-Battle Creek, voted against the executive order in a morning session, which resulted in a lengthy meeting between Engler and the Senate Appropriations Committee.
The sides agreed new legislation would be drafted to cut higher education funding by 2 percent, rather than the 2.5 percent outlined in the original order. The difference will come from $11 million that would be reallocated from the Michigan Merit Award scholarship program trust fund to higher education.
"I was able to mitigate to some degree the numbers of dollars that would be taken from our education," said Schwarz, a term-limited appropriations member, on changing his position.
The House still must past the supplemental bill, which would potentially ease MSU's cuts to about $6 million. The executive order was approved by both House and Senate appropriations committees.
"There is a point in this process when you understand you've done the best you can do," Schwarz said. "I felt I've done the best we can do, we had to make an executive order."
To make up for the budget shortcomings, MSU spokesman Terry Denbow said departments will need to adjust their spending.
"I can't speak for the departments, but there's various ways to do it that could range from not filling positions to restricting whatever," he said.
As MSU officials look for ways to make up for lost money, municipalities statewide are preparing for cuts of at least $53.1 million. The order also reduced state fire protection grants by 50 percent.
Between the two cuts, East Lansing is bracing for a funding reduction of $600,000 to $700,000 for city services, including fire protection, City Manager Ted Staton said.
The order also will cut funding by 3.5 percent for all state departments except corrections and military affairs. State Rep. Gretchen Whitmer, D-East Lansing, said the executive order hasn't pulled the budget "out of the hole."
"This is a Band-Aid on a gaping wound, and unfortunately everyone is going to feel pain in the state of Michigan," said Whitmer, a member of the House Appropriations Committee. "The Engler administration is leaving the state in such a devastating budget condition that I don't how we can build this up until the economy turns around and until some revenue sources are identified."
Engler spokesman Matt Resch said it becomes more difficult to address budget issues at the end of the year. Michigan's Constitution requires the state to have a balanced budget.
"There is still work to be done when it comes to supplemental bills that go with the executive order," Resch said. "The governor has felt strongly from the beginning that when he leaves office, the budget will be balanced so the governor-elect can focus on the next year's challenges."
House Democratic spokesman Dennis Denno said it would be difficult for Democratic Governor-elect Jennifer Granholm to change Thursday's executive order when she takes office. But, he said, it is possible that she could create a new order.
Staff writers Joey Guillen, Kristofer Karol, Kurt Ludke and The Associated Press contributed to this report.
Megan Frye can be reached at fryemega@msu.edu.
