Gov. Jennifer Granholm was thrown for an expensive loop Tuesday when she learned she'll have to quickly slash $142.6 million to balance this year's budget.
The state's leading budget experts announced Tuesday revenue expectations will fall short of predictions made in November. The shortfall is likely to have an impact on MSU's budget, analysts said.
Before the announcement, Granholm hadn't planned to be responsible for greatly adjusting the current year's budget because former Gov. John Engler made last-minute reductions before leaving office at the start of the year.
"They were a shock to her," Granholm spokeswoman Mary Dettloff said.
To make up for the shortcomings, Granholm will issue an executive order in the coming weeks outlining additional cuts from state programs, Dettloff said.
"Everything's on the table," she said - including higher education.
MSU receives about half of its funding from state budgets.
Before Tuesday's consensus, Steve Webster, MSU vice president for Governmental Affairs, said immediate budget reductions for public universities might be offset by future tuition increases.
After the estimate was agreed upon, Webster said it is improbable MSU will increase tuition for the current semester. "Unless there was a catastrophic reduction, it'd be hard to charge tuition retroactively," he said.
Aside from a tuition increase, less money to MSU would lower the quality of education, Webster said.
"Our classrooms are crammed as a result of exploding enrollments, our costs as a result are up," he said. "We've absorbed one midyear reduction in state appropriations without raising tuition. Each subsequent reduction in state appropriations begins to hit at quality."
With the state's bleak budget outlook, higher-education money is a likely source for cuts, political science Professor Carol Weissert said.
"My guess is it will be universities and other general fund expenditures," she said. "Universities make up a substantial portion of general fund spending. I don't think she wants to cut higher education, but universities are vulnerable."
Weissert added cuts made in May for the 2004 fiscal year would likely be more dramatic than those in coming weeks.
"It's not good news for the university," she said.
Economics Professor Charles Ballard said he agreed Tuesday's meeting does not bode well for MSU.
"Higher education is certainly one of the things that might be a target," he said. "It wouldn't be at all surprising because there's so few places you can go. Higher education is one of the biggest proponents of the general fund."budde
