Michigan Gov. Jennifer Granholm said during her eighth and final State of the State address Wednesday she will reinstate the Michigan Promise Scholarship in her budget proposal for the 2010-11 fiscal year.
In her speech at the Capitol in Lansing, the governor said she will fund the scholarship, restructuring it to keep graduates in Michigan. However, she did not reveal how she plans to fund it.
“Virtually every economist and anyone who’s read the want ads recently would agree — today’s jobs demand a college degree or technical training,” she said in her speech. “Tonight, I am announcing that my budget for the year ahead will restore the Michigan Promise Scholarship, identify a creative way to pay for it and give it a new focus — keeping our young people in Michigan when they earn their degrees.”
The scholarship was slashed in the process of eliminating Michigan’s $2.8 billion deficit in the 2009-10 fiscal year, leaving about 8,200 eligible MSU students without the funding they were promised. About 96,000 students statewide lost funding.
Granholm spokeswoman, Liz Boyd, said details about funding the Michigan Promise Scholarship will be in the governor’s budget proposal for the 2010-11 fiscal year, which will be released Feb. 11.
Although potential funding for the scholarship remains unknown, MSU officials were encouraged by Granholm’s proposal for its reinstatement.
“I feel very good about (the proposal),” MSU Trustee George Perles said. “I hope that happens. We better educate our students. That’s the future of our whole country. Whatever we can do for them is worth every cent.”
Senate Majority Leader Mike Bishop, R-Rochester, said if the governor wants to reinstate the Michigan Promise Scholarship she must identify a revenue source.
“Everyone would love to restore the Michigan Promise Scholarship,” he said. “She has to identify a revenue source for the $160 million it would cost to reinstate the Promise grant.”
University officials developed a plan in November to use $7.9 million in federal stimulus dollars to aid MSU students affected by the loss of the scholarship with one-time, $500 grants this fall, said Rick Shipman, director of the MSU Office of Financial Aid.
This semester, part of the stimulus funds will be used to ensure about 2,000 high-need students of the 8,200 previously eligible will have the full $1,000 in Promise Scholarship funding they expected for the year, Shipman said.
Granholm said if the scholarship is reinstated, its focus would shift to keeping students in the state after graduation. Sarah Ballman, a finance senior, said keeping graduates in Michigan was one of the scholarship’s biggest assets when it was in effect.
“The one reason why I really liked the Promise — or at least enjoyed having it when I did — is that especially now in these economic times, so much emphasis is put on redoing the economy of Michigan, but on the college level you see the great educational drain of kids leaving college … and leaving the state,” Ballman said.
If Granholm can convince the Michigan House and Senate to fund the scholarship in next year’s budget, it would take effect when the state’s next budget year begins on Oct. 1.
But the state already has a $1.7 billion projected deficit for the next fiscal year, which means finding funding could be difficult, said state Rep. Joan Bauer, D-Lansing.
“I look forward to see what new form of funding the governor will propose,” she said. “The devil is in the details.”
Granholm also said she would “draw the line against additional education cuts.”
Bishop said the Republican-controlled Senate will not support new revenue in the form of taxes and funding must be identified through reforms.
The governor emphasized the importance of enacting more reforms in her speech. She highlighted the reforms she proposed last week including a new cost-effective health care plan for state employees, elimination of lifetime health care for state legislators and incentives for 46,000 state employees to retire. Her reform plan would save more than $450 million, she said.
“State government and our schools will definitely miss the contribution of the most experienced employees, but we will save money,” she said in her speech. “That money we can put toward education and job creation. And we will open up thousands of jobs for people who want to launch careers in public service and education.”
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Granholm urged legislators to review her budget proposal when it is released next week and to agree on a budget by July 1 to avoid another government shutdown when the fiscal year begins in October.
Although her budget will be released next week, Bishop said it will not be a complete budget unless it eliminates the deficit without new taxes.
“We believe we can resolve this budget shortfall by saving money within government,” Bishop said.
Throughout the speech, the governor maintained a positive spirit about the future of Michigan and its struggling economy.
Urban and regional planning sophomore Bobby Busley said he liked the governor’s proposals but was concerned about her overly optimistic attitude.
“It’s her last year so I feel like she doesn’t have anything to lose,” he said. “But I would have liked to hear a little more of her throwing caution to the wind.”
Kate Jacobson and Zane McMillin contributed to this report.
