More than a month after Gov. Jennifer Granholm's pledge to invest in higher education, a delay of $73 million in funding is looming in the distance.
The state faces a $344 million cut if Granholm's executive order to reduce Michigan's combined $3 billion deficit is approved by the state House Appropriations Committee.
If passed, Granholm has proposed to postpone higher education payments — totaling $73 million for Michigan schools — until the next fiscal year, which starts Oct. 1.
MSU would face $13 million in postponed payments. In the meantime, the university would borrow money until the next fiscal year.
Steve Webster, MSU's vice president of governmental affairs, has said it is the governor's intention to repay the full amount of borrowed money. However, relying on funds from the state would cross into dangerous territory.
If the state were to choose to or become unable to repay that amount, it would be treated as a cut in funding and MSU would have a debt to pay.
The MSU Board of Trustees are now in a precarious situation as they decide on next year's tuition, which strongly depends on the amount of money MSU receives from the state. Tuition is bound to increase regardless. But since the board cannot guarantee the funding, it will have to carefully balance the risks when setting the cost.
Granholm's plan, which also will decrease funding in Michigan schools by $34 per pupil, is noticeably void of any new or raised taxes.
Last week, Granholm's service tax was rejected by the state's Republican-controlled Senate. It would have yielded approximately $1.5 billion, which would have helped to balance the state budget. The proposed 2 percent tax on services included car washes, barbers and movie tickets and would have been implemented by June 1.
This means deep cuts and delays in payments for education might not have been necessary if Congress had passed the bill.
Senate Majority Leader Mike Bishop, R-Rochester, has said the budget solution looks out for the long-term interests of Michigan residents.
But deeper cuts to state programs are not the answer. They hurt Michigan's residents more than help the budget deficit.
Educated Michigan residents hold the potential to boost Michigan's drowning economy and hurting people's ability to attend school does the exact opposite.
If the delay does turn into a decrease in funding, it also could cause college graduates to emerge into the workforce shouldering more of the immense debt they acquire during college.
Essentially, cuts in funding for Michigan schools and delayed funding for higher education institutions are not wise moves to invest in long-term interests.
