Funding proposal below inflation

LANSING - Gov. John Engler released his budget for fiscal year 1999 yesterday, which includes just a 1.5-percent increase in funding for the University - a disappointment to many University officials and state legislators.

Michigan's Department of Management and Budget Director Mary Lannoye, who presented the proposal yesterday to a joint meeting of the state House of Representatives and Senate Appropriations Committee, said the increase for higher education funding will propel the state's spending per student to $6,694.

"We're proposing an additional $21.6 million (for public universities)," Lannoye said. "Our per-pupil spending will now rank 11th (in the nation), which is up from 24th two years ago."

But many University officials and some state legislators said they think this proposal does not meet the needs of state higher education institutions.

Sen. John Schwarz (R-Battle Creek) said the amount Engler proposed for increases in funding for public education will hurt the state's universities that have tried to keep tuition at or below the inflation rate.

"This proposal is not even an increase that meets the inflation rate for 1997," Schwarz said.

Schwarz said the trim funding increase could hurt students, adding that universities could face a 5.5- to 8-percent tuition increase if the proposal is approved.

"All students ought to be concerned," Schwarz said.

Lannoye said the increases in funding over the past few years will make up for this year's proposed lower increase.

"If you look at what we've given the past few years, it meets inflation," Lannoye said.

The University's Vice President for Government Relations Cynthia Wilbanks said the proposal did not come as a surprise, and it will probably not be the final product.

The proposed increase "is about what we expected and it's the starting point for the legislators," Wilbanks said.

State Rep. Mary Schroer (D-Ann Arbor) said money for University expenditures will be tight, adding that there are some projects on which the University needs to focus.

"What's of most concern is the special maintenance money," Schroer said. "We've been fairly blessed in the past few years."

Wilbanks said the allocations are smaller due to decreased revenue to the state treasury. "The predictions were based on the amount of revenue made available for new spending," Wilbanks said.

Under Engler's proposal, public universities in Michigan will receive $1.46 billion in state aid, of which the University will receive more than $320 million. Each school will receive a 1.5-percent budget addition, which Schwarz said will hurt smaller state institutions more than schools like Michigan State University or the University of Michigan.

"This may disproportionately affect the smaller schools," Schwarz said. "One of the problems with the smaller schools is that they don't have a big endowment to fall back on. Only Michigan and Michigan State can fall back on endowments and shift money around."

While the proposal suggested an increase for public four-year institutions, Engler did not recommend an increase for community colleges as he has in past years.

Rep. Thomas Mathieu (D-Grand Rapids), vice chair of the House Appropriations committee, said the governor's higher education funding recommendation - specifically the community college numbers - will change.

"I can guarantee you that there will need to be some movement on this issue," Mathieu told Lannoye in response to her presentation.

House Appropriations Chair Morris Hood (D-Detroit) agreed with Mathieu, calling the proposal "totally inadequate."

Lannoye said the reason for maintaining current community college funding is to account for the money that schools have received from retirement savings during the past two years. The state took over the payment of the retirement funds, freeing the community colleges from that requirement, thus providing the schools with $31 million in funding.

"I think our position is perfectly defensible," Lannoye said.

In addition to the higher education funding increases, Lannoye outlined plans to expand public safety programs and transportation services. Engler also plans to continue reducing unemployment.

The budget calls also for the creation of a new State Trooper training school with an increase in funding by $5.1 million, bringing the total budget to $101 million.

Rep. Jim McBryde (R-Mt. Pleasant) said Michigan's state troopers are nationally renowned.

"We really do have the envy of the nation here," McBryde said.

The Department of Corrections will also receive a five-percent increase this year.

The Department of Transportation's budget will include $662 million solely for the purpose of road repairs and maintenance.

Engler also proposed a 10-percent increase to the Michigan Jobs Commission, raising its budget to $569.5 million.

02-13-98