State budget gives 'U' small increase

LANSING - Gov. John Engler's fiscal year 2000 Executive Budget recommendation includes a 4 percent overall increase for higher education spending, but a new method of funding means not all universities - including the University - will see the full amount.

The new formula only guarantees the University a 1.5 percent, well below the University Board of Regents' request of 5 percent.

But the University could receive up to a 3 percent increase by keeping tuition rates low, bringing the University total to $333.3 million.

"From what we have outlined and what we had hoped to do, a 1.5 percent increase would be a challenge," said Cynthia Wilbanks, the University's vice president for government relations.

Wilbanks said the increase in higher education spending in the preliminary proposal will likely change during the budget revision process in the state Legislature.

"The for-sure increase is a starting point, as it was last year," Wilbanks said. "Last year a 1.5 percent increase was recommended, and we ended up with something less than 3 percent."

When State Budget Director Mary Lannoye presented Engler's $34 billion budget recommendation yesterday to a joint session of the House and Senate appropriations committees, she highlighted educational funding as the governor's top priority.

"The key to Michigan's success is the quality of our schools," Lannoye said.

But senators and representatives disputed Lannoye's claim that education is of greatest importance to Engler, citing comparatively larger spending increases in other areas.

Sen. John Schwarz (R-Battle Creek), chair of the Senate Appropriations Subcommittee on Colleges and Universities, pointed to an 8.6 percent increase recommended for the Department of Corrections, calling for the opening of 11 new prisons by August of 2000.

"One of the significant points of difference is going to be how one can justify spending 8-plus percent on corrections and 4 percent on higher education," Schwarz said.

Rep. Hubert Price (D-Pontiac) said this discrepancy was particularly tough to handle, saying "my mother taught me some basic math" and this proposal doesn't show an administration committed to education.

"I'm having trouble reconciling how you can say that," Price, the House appropriations committee's minority vice chair, told Lannoye after her presentation.

Engler spokesperson John Truscott said past increases toward prison spending have been much larger and corrections are a necessary evil.

"As long as people commit crimes, we're going to lock them up," Truscott said.

Lannoye said prisons are so overcrowded that "we have no choice."

The additional 1.5 percent increase that the University could qualify for depends upon a requested repeal of the Tuition Tax Credit, which Lannoye said is currently "an empty promise anyway."

The tax credit is offered to Michigan residents who attend a state college or university whose tuition increase stays below the rate of inflation.

Lannoye said recent low rates of inflation mean universities can't easily keep tuition rates low enough for students to qualify for the tax credit.

According to the proposal, universities would directly receive the funding otherwise used for the credit, provided they keep tuition increases below 3 percent.

"There's no incentive now for schools to keep their tuition below the rate of inflation," Truscott said.

Regent David Brandon (R-Plymouth) said the plan sends a clear message to the regents.

"We need to do everything we can do to hold down tuition increases," Brandon said.

The final 1 percent of the higher education increase would go toward a four-tiered method of distributing funds. The formula groups the state's public universities into four tiers, based on cost per credit hour, and assigns each tier a per-student funding floor. Money would go only to those universities that receive less than their tier's floor level.

The University is grouped in the top tier, along with Michigan State University, Wayne State University, and Michigan Technological University.

Because the University of Michigan already receives more than $8,500 per in-state student as required by the top tier, it would not receive any additional funding under the formula. MSU would get money because its per-student allocation falls below that number.

"I am opposed to the four-tier program," Schwarz said. "My overall impression is that it's not as bad as I thought but certainly not as good as I had hoped."

Engler's budget proposal:

n Spends more on K-12 education than entire general fund

n Overall 4 percent increase for higher education

n Improves care in nursing homes

n Opening of 4,712 new prison beds in 11 new prisons

n Spends $1.25 billion to improve 1,625 miles of roads

02-12-99