Gov. Jennifer Granholm announced her budget proposal for the upcoming year Thursday, and although she went easy on higher education, history suggests higher education usually can’t avoid red ink.

The state’s higher education budget is part of the state’s general fund budget and supports state financial aid programs and university operations at 15 public universities, including MSU.

Although in the past decade the state’s higher education budget has been reduced by 13.7 percent overall, higher education doesn’t always get hit the hardest compared to other items in the budget.

Under pressure

At the beginning of the decade in fiscal year 2001-02, the higher education budget totaled about $1.8 billion. Since then, higher education allocations have fluctuated every year.

Higher education funding hit a decade low in fiscal year 2006-07 when it dropped to $1.3 billion, but a year later it was back up to $1.6 billion.

From 2001 until 2010, higher education funding decreased by about 16 percent. Community college funding decreased by about 6 percent and state police funding decreased by about 9 percent. Corrections funding increased by about 19 percent.

MSU Trustee Colleen McNamara said levels of funding for higher education are impossible to predict.

“It’s really treated different from year to year,” she said.

Although funding varies, the higher education budget has been treated well compared to other state programs, said Douglas Roberts, director of MSU’s Institute for Public Policy and Social Research and a former state treasurer.

“Michigan has (a) very good higher education sector,” he said. “It’s clearly under pressure, but as far as reductions in general, it has been doing relatively well in relation to other budgets.”

The state’s corrections budget has fared slightly better than higher education, starting the decade with about $1.5 billion and hitting a funding high in fiscal year 2007-08 when it received about $1.9 billion. But the next year it dropped by about 10 percent to about $1.7 billion.

Granholm proposed a 0.6 percent increase to corrections funding in Thursday’s budget proposal allocating about $1.9 billion.

Rick Cole, chief of staff for former Michigan Gov. James Blanchard and chairman of MSU’s Department of Advertising, Public Relations and Retailing said it’s interesting that corrections funding is increasing as higher education funding decreases.

“The prisons are expanding at the same time the universities are declining … once we start to (increase higher education funding) we will reduce the need for prisons,” he said.

General funds for community colleges started the decade with $319 million in general funds. These funds dipped by almost 12 percent the fiscal year 2006-07 to a low of $247 million. By last year, community college funding was back up to $299 million.

“It would be nice if they could hold education harmless while everything else is going, but it isn’t realistic,” said Val Meyers, associate director of the MSU Office of Financial Aid.

Applied engineering science senior Jose Linares said more state funding is needed for higher education. “The state funding for higher education is not being treated equally,” he said.

The year ahead

Granholm allocated about $1.5 billion to the higher education budget — about a 2 percent decrease from last year’s $1.6 billion — in her budget proposal for fiscal year 2010-11.

About $1.4 billion of those appropriations would fund university operations in the state, and MSU is slated to receive about $291 million.

Granholm’s budget proposal serves as a suggestion to state lawmakers who now will develop a budget for fiscal year 2010-11, which begins Oct. 1.

Both the Michigan House and Senate must agree on a budget, and the governor must sign the budget.

Last year, state financial aid spending was reduced by 61 percent because of stipulations involved with using federal stimulus dollars for the budget, said state Rep. Bob Genetski, R-Saugatuck, a member of the House Higher Education Appropriations committee.

“When we look at the budget last year, (because) we accepted the stimulus money, we weren’t allowed to cut university operations,” he said.

“The only thing left in the higher education budget to reduce was scholarships and money that goes directly to the kids.”

Because of the deep financial aid reductions last fiscal year, major cuts to financial aid aren’t likely this year, Genetski said.

State Rep. Alma Wheeler-Smith, D-Salem Township, a member of the House Higher Education Appropriations committee, said she would like to see funding from another area of the budget shifted to increase financial aid funding.

“I would certainly hope the budget the House produces reflects a priority for higher education,” she said.

The future of funding

Cutting higher education funding is a relatively guilt-free fix for lawmakers because they assume universities can raise tuition, said Mike Boulus, executive director of the Presidents Council, State Universities of Michigan.

This year higher education cuts likely will remain minimal as lawmakers consider Granholm’s proposal because of restrictions tied to the use federal stimulus dollars, said state Rep. Bill Caul, R-Mount Pleasant.

“If we are required to define dollars to cut within the higher education budget, the only place is within the scholarship line items,” he said.

Although cuts to higher education should be minimal this year, Cole said unless lawmakers develop major structural changes, students will continue to feel the burden of high tuition and a lack of financial assistance from the state.

“Raising tuition is deferred maintenance in the higher education system,” he said.

“It’s not fixing something that needs to be fixed.”