Michigan's 15 public universities could see a 6-percent cut under a preliminary budget plan by Gov. Jennifer Granholm, which could include a loss of more than $17 million from MSU's funding.
The cut to higher education is included in Granholm's budget plan to balance a $920 million deficit in the state's $38.6 billion budget, legislative sources confirmed Wednesday.
Also, sources told The State News there is a stipulation included that universities could receive a smaller, 3-percent cut if tuition was not raised or kept within a set range. No other details were disclosed about the tuition stipulation.
If MSU's state funding of more than $293 million is cut by 6 percent, there would be a loss of more than $17 million from its $693 million budget.
"We certainly hope that would not stand," MSU Trustee David Porteous said. "That is a devastating cut for Michigan State."
Porteous said the university has a history of controlling tuition increases when the state provides appropriate funds to higher education.
The budget presented to top legislative officials Tuesday is preliminary and could be tweaked throughout the next few weeks, Granholm spokeswoman Liz Boyd said.
"We are committed to working with legislators to come up with a bipartisan budget," Boyd said.
Legislators will continue to meet with Granholm's administration throughout the next few weeks to approve the budget by Christmas, Boyd said. The state's fiscal year began Oct. 1.
But if the cut is approved by lawmakers, universities will face the third cut in 11 months totaling 16 percent or $240 million, said Mike Boulus, executive director of the Presidents Council, an advocacy group for Michigan's universities.
"Six percent is a significant and disproportionate cut to higher education," Boulus said. "We have done our share. The real challenge would be coming up with 6 percent in six months."
Boulus said midyear cuts could have twice the impact as the cuts posed at the beginning of the fiscal year that began July 1. For example, to cover a 6-percent midyear cut could mean eliminating two faculty positions instead of one.
Boulus said he's not sure tuition increases would be measured or whether the result would be midyear tuition increases or increases next year or this year.
Last year, universities took a 3.5-percent midyear cut, and all 15 public institutions avoided midyear tuition increases.
MSU lost about $33 million in state funding for a total budget shortfall of $60 million.
In response, MSU officials cut $31 million from its budget, raised tuition 9.9 percent, eliminated 110 staff positions, canceled 15 academic programs and froze 16 other programs.
The 15 public universities lost $152 million in state funding and adjusted by slicing $159 million from the budgets, including 1,200 full-time positions.
For Granholm's proposed bill to be official, she must get approval from the House and Senate appropriations committees, which are Republican-controlled.
House Speaker Rick Johnson, R-LeRoy, has agreed to keep budget details confidential but felt the proposals were a first good step, said Matt Resch, spokesman for Johnson.
Senate Majority Leader Ken Sikkema, R-Wyoming, left the meeting feeling positive about the majority of the proposals, spokesman Ari Adler said.
"We don't see anything that will lead to war," Adler said.
