An executive order that would postpone the state's scheduled payment of more than $13 million to MSU has some students worried that the state's commitment to education is fading.
The order, issued by Gov. Jennifer Granholm on March 22, would cut $344 million in expenses from the state budget and delay a total of $73 million to Michigan's universities.
If MSU doesn't eventually receive the $13 million promised by the state, the university would have to treat it as a cut. However, it's Granholm's full intention to repay MSU, said Steve Webster, MSU's vice president for governmental affairs.
"To the extent that the $13 million is repaid to the university promptly in the new state fiscal year, it would be a matter of the university really borrowing the money to carry this promised payment," Webster said.
It would be wise for the state government to continue investing in education because more graduates create more revenue through taxes, said Janae Bucks, a communication senior.
"Universities are shoveling students that are eventually going to help the government through taxes," Bucks said. "They want university graduates to stay in-state, so I don't see why they wouldn't help us."
Delaying funding to universities is an accounting gimmick, said Charles Ballard, an MSU economics professor.
"Over the last several years of recurrent budget crises, Michigan has followed two basic strategies," Ballard said. "One is spending cuts. The other is one-time fixes combined with accounting changes. The proposal to delay, but not eliminate, some funding to the universities is another of these accounting changes.
"This sort of thing may make it appear that the budget in the current fiscal year is in better shape, but of course it is not a permanent solution to the problem."
Under state law, the House Appropriations Committee and Senate are required to vote on the executive order within 10 days of its introduction. The Senate already approved the order, and the House Appropriations Committee is scheduled to vote on it later this week.
Granholm's order came as part of a resolution to trim funds from the state's combined $3 billion budget deficit. It also came despite her mantra to continue investing in education.
If passed, MSU would receive the $13 million in October, which is the first month of the next fiscal year, said Greg Bird, spokesman for the Office of the State Budget.
"(The) $13 million is the portion of a half month's payment that MSU receives from the state that (it) will not receive this fiscal year, but next fiscal year," Bird said. "We're delaying that half month's payment."
Delaying these payments would allow the state to free up the funds for use in the current fiscal year, Bird said.
"We're moving the problem from one fiscal year to the next," he said.
If the state government didn't help fund its universities, if would be harder for many students to attend college, said Patrick Murphy, a creative writing senior.
"A lot of that money probably goes to scholarships," Murphy said. "Less scholarships — less students."
Alex Altman can be reached at altmanal@msu.edu.
