House Subcommittees Approve FY 2014 Budgets for Higher Education, Community Colleges

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The House Appropriations Subcommittee on Higher Education has approved its version of the Fiscal Year 2014 budget for Michigan’s universities. The Subcommittee’s budget includes the same level of overall funding for university operations proposed by the governor, but revises the criteria for performance funding, and penalizes universities that enter into long-term collective bargaining agreements before the end of March when the right-to-work law took effect.

UNIVERSITY OPERATIONS

Governor: The governor’s Fiscal Year 2014 budget would increase funding for Michigan’s 15 public universities by 2% ($24.9 million), with new funds allocated as performance funding. In the current fiscal year, the governor increased funding for higher education by 3%, making new funding contingent on performance on several metrics. The governor’s budget for Fiscal Year 2014 included $1.24 billion for university operations, including $24.9 million in new funding, which would be allocated based on the metrics from the current year budget, including: (1) undergraduate completions in critical skills (science, technology, engineering, mathematics and health); (2) research expenditures; (3) six-year graduation rates; (4) total completions; (5) administrative costs as a percentage of core expenditures.; and (6) tuition restraints.

House Subcommittee:

  • Total funding: The Subcommittee appropriated the same level of overall funding for university operations as the governor.
  • Performance funding: The Subcommittee concurred with the governor and included $24.9 million for performance funding. However, the Subcommittee removed the tuition restraint metric, and allocated performance funding as follows:

o $5.5 million based on undergraduate completions in critical skills areas, including STEM and health care (up from $4.1 million in Executive budget);

o $2.8 million based on research and development expenditures (up from $2.1 million in the Executive budget);

o $16.6 million based on six-year graduation rates compared to national peers (up from $12.4 million in Executive budget);

o $16.6 million based on total degree completions compared to national peers (up from $12.4 million in Executive budget); and

o $16.6 million based on administrative costs as a percentage of university operations compared to national peers (up from $12.4 million in Executive budget).

  • Tuition restraint: The House Subcommittee lowered the tuition restraint benchmark from 4% to 3%, and made tuition restraint a condition for receiving performance funding. Under the Subcommittee’s budget, universities that increase tuition by more than 3% could not receive performance funding.
  • Collective bargaining agreements: The Subcommittee budget stipulates that universities that entered into long-term collective bargaining agreements before March 28, 2013 (when the right-to-work law tookeffect) would lose 15% of their base appropriation if they do not achieve a 10% savings or if they require paying dues to a union as a condition of employment.

FINANCIAL AID

Governor:

  • Michigan Tuition Grant: The governor included continuation funding for Michigan Tuition grants at $31.7 million in federal TANF funds. The grants are needs-based, and are available to low-, middle-, and higher- income students attending private colleges, with eligibility and grant levels based on tuition costs, minus “estimated family contribution.” The governor added budget language requiring private colleges with students receiving grants to participate in the state’s P-20 longitudinal data system, and report on the number of Tuition and Pell Grant students graduating, as well as the number taking remedial education classes.
  • Michigan Competitive Scholarship: The governor provides continuation funding for Michigan Competitive Scholarship grants at $18.4 million in federal TANF. Scholarships are merit-based with eligibility based on ACT scores.
  • Tuition Incentive Program: The governor’s budget increases funding for the Tuition Incentive Program by $3.2 million in General Funds, bringing total funding to $47 million. The program is currently funded by $43.8 million in federal TANF funds. The Tuition Incentive Program is a needs-based grant for students who are Medicaid-eligible. The governor added boilerplate language limiting reimbursements to public universities to 300% of the average community college tuition rate.

House Subcommittee:

  • P-20 data systems for private colleges: The Subcommittee concurred with the governor on the appropriations amounts, but struck the governor’s Michigan Tuition Grant language requiring P-20 data system participation for private colleges.
  • Tuition Incentive Program: The Subcommittee concurred with the governor’s proposed policy changes regarding the Tuition Incentive Program.

COMMUNITY COLLEGES

 The House Appropriations Subcommittee on Community Colleges has approved its version of the Fiscal Year 2014 budget. The Subcommittee’s budget includes the same level of overall funding for community college operations that is in the governor’s budget, but does not adopt the revised performance funding criteria proposed by the governor. The Subcommittee also penalizes institutions that entered into long-term collective bargaining agreements before March 28, when the right-to-work law took effect.

COMMUNITY COLLEGE OPERATIONS

Governor: The governor’s Fiscal Year 2014 budget would increase funding for Michigan’s 28 community colleges by 2% ($5.8 million), with new funds allocated as performance funding, for a total of $298.2 million for community college operations. In the current fiscal year, the governor increased funding for community colleges by 3%, making new funding contingent on performance on several metrics. The governor’s proposed performance funding metrics are similar to the current year budget, except that it makes attainment of local strategic value goals (related to community colleges’ connection and interaction with their surrounding communities) a prerequisite for all performance funding, and replaces the local strategic value metric with a new metric for job placement in the skilled trades. The performance metrics in the governor’s budget are as follows: 50% for across-the-board distribution; 17.5% based on weighted degree completions; 15% based on job placement of students who completed skilled trades programs; 10% based on student contact hours; and 7.5% based on administrative costs as a portion of total operations spending.

House Subcommittee:

  • Total funding: The Subcommittee appropriated the same level of overall funding for community college operations as the governor.
  • Performance funding: The Subcommittee concurred with the governor on the $5.8 million increase for performance funding, but kept the current local strategic value metric in place and did not add a metric for job placement in the skilled trades.
  • Collective bargaining agreements: The Subcommittee budget stipulates that community colleges that entered into long-term collective bargaining agreements before March 28, 2013 (when the right-to-work law took effect) would not receive any performance funding if they do not achieve a specified savings or if they require paying dues to a union as a condition of employment.

Another big reason to expand Medicaid

The latest support for expanding Medicaid in Michigan comes from none other than Wall Street.

Moody’s Investors Service reports that states that do not expand Medicaid will be under the greatest political and budgetary pressure as what’s known as the Disproportionate Share Hospital payment is phased out. The DSH payment helps compensate hospitals serving large numbers of uninsured patients.

Without Medicaid expansion, hospitals that continue to provide a lot of charity care to uninsured patients will not  have a source of funding to replace DSH payments. (more…)

MLive: Viewpoint: College education funding must be restored to ensure Michigan’s economic growth

Sadly, Michigan has cut investment in its public universities by 32 percent since 2008, driving up tuition and undermining educational quality while making it harder for the state to attract businesses that rely on a well-educated workforce. March 27, 2013 — MLive

Ryan plan: Schools, public health, safety threatened

Contact: Judy Putnam at (517) 487-5436
March 27, 2013

Michigan Could Lose Billions Under Ryan Budget

Massive Cuts in Federal Funding to States and Localities Under Ryan Plan
Could Harm Michigan Schools, Public Health and Safety, Report Finds

LANSING, Mich.— Critical federal funding for Michigan’s schools, health care, clean water, law enforcement, and other key services would be slashed under U.S. House of Representatives Budget Committee Chairman Paul Ryan’s budget, which passed by the U.S. House of Representatives last week.

“The budget by Chairman Ryan places the deficit reduction burden on the  backs of Michigan’s  low-income and middle-class families while, at the same time, offering a windfall in tax cuts to corporations and the wealthiest individuals,” said Gilda Z. Jacobs, president & CEO of the Michigan League for Public Policy. “It’s clear that yet another round of deep cuts to our schools, public safety, and health would harm our families, communities and economy.” (more…)

Mom’s juggling act hurt by EITC cut

Shannan Mills does a lot of juggling. With three daughters and three jobs, the 34-year-old divorced mom from Fowlerville is on the move constantly trying to make sure her daughters’ needs are met.

Shannan Mills

She said she was surprised and disappointed when she received only $100 from the Michigan Earned Income Tax Credit this year.

In 2011, Gov. Rick Snyder and a majority of lawmakers voted to cut the EITC from 20% of the similarly named federal credit to just 6% to pay for a dramatic drop in the state’s corporate income tax.

The big tax shift from businesses to individuals is just hitting home now as taxes are filed for the 2012 tax year.

Under the reduced EITC, Mills saw her credit drop from about $330 to $100. (more…)

The Detroit News: Medicaid expansion in trouble in Mich. Legislature

Rep. Matt Lori found himself in an unusual position when shepherding through a $15.3 billion health budget that pays for Medicaid, the health insurance program for the needy. March 24, 2013 — The Detroit News

Michigan Radio: What tax changes mean for Michigan’s working class

When Governor Snyder and Michigan legislature cut part of the Earned Income Tax, they argued that it was just a move that piggy-backed on the federal Earned Income Tax Credit.  March 12, 2013 — Michigan Radio

MLive: Sandy Hook shootings push mental health debate to the front of Michigan school safety review

Michigan is poised to take a long, hard look at its mental health support system after the shootings at Sandy Hook Elementary in Newtown, Conn. March 14, 2013 — MLive

Detroit Free Press: State House Republicans reject Snyder’s Medicaid expansion proposal

Gov. Rick Snyder’s proposal to expand Medicaid to nearly 500,000 Michigan residents, is not getting a warm reception in the state House of Representatives. March 21, 2013 — Detroit Free Press

Public News Service: Report: 32 Percent Less Funding for MI Higher Ed Since 2008

Michigan is ranked among the states that have cut higher education the most since the recession began in 2008.

In the past five years, according to a study from the Center on Budget and Policy Priorities, Michigan lawmakers have cut almost one-third of the revenue for public colleges and universities. Those cuts have meant higher tuition costs and diminished the quality of education, according to the study. March 20, 2013 — Public News Service

 

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