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Left: Hurley, right: Nesbary Left: Hurley, right: Nesbary COURTESY PHOTOS

Universities decry Michigan’s ‘out of whack’ funding priorities

BY Sunday, November 24, 2019 03:43pm

Michigan ranked 20th in the nation 19 years ago in per-resident state funding for higher education.

Today, the state ranks 44th in the U.S., appropriating less than $196 per resident toward public funding for higher education, or $85 below the national average.

Michigan Association of State Universities (MASU) CEO Dan Hurley doubts that status will get better anytime soon, particularly after lawmakers appropriated only slight increases in funding for Michigan’s 15 public universities for the state’s 2020 fiscal year.

The 2020 fiscal year appropriations further what Hurley describes as a nearly two-decade disinvestment in higher education in Michigan that’s put a greater burden on students for the cost of a college education.

Public support for higher education covers 22 percent of the cost of tuition at public universities in Michigan, meaning students pay the remaining 78 percent. Nationally, public funding from states covers about 52 percent of tuition costs.

“That just shows you how out of whack Michigan is,” Hurley said. “Until lawmakers start hearing more and more from constituents about wanting their sons and daughters to be able to afford to get a college education, and their willingness to invest in it, we may continue to see similar actions out of the legislature.”

The state budget that took effect Oct. 1 increased funding for university operations 0.5 percent, or by $7.9 million, to $1.54 billion for the 2020 fiscal year. Community colleges received a 0.8-percent increase over the prior fiscal year to $412.5 million.

Gov. Gretchen Whitmer requested increases of 3 percent for both line items in her budget proposal early this year.

Legislators’ relatively flat appropriations came despite persistent calls from business leaders, universities and community colleges for more public support for higher education and “all the evidence one would seem to need in terms of return on public investment,” Hurley said.

The funding level for the 2020 fiscal year comes as the state projects a growing need for people with two-year or four-year college degrees. The state estimates that jobs requiring a four-year degree will grow by 11 percent between 2016 and 2026.

By 2030, Michigan needs 500,000 more graduates with a bachelor’s degree, and 130,000 with an associate degree, according to the Bureau of Labor Market Information and Strategic Initiatives within the Michigan Department of Technology, Management and Budget.

“Where the current situation is particularly confounding is the overwhelming evidence of the labor market demand for workers with four-year degrees and higher,” Hurley said.

Hurley points to data showing that earning a degree equates to higher earning power. People with a four-year degree earn $10,000 more annually than somebody with an associate degree, and $15,000 more than someone with a certification, according to MASU.

“There’s just a correlation at the individual level and the state level in terms of education levels achieved and personal income. That is a basic equation,” Hurley said. “Other states get it and until Michigan lawmakers get it, we are going to be at a severe competitive disadvantage.”

What MASU describes as inadequate funding also contributes to “potential brain drain,” Hurley said. That can lead to “much dimmer economic prospects for the state and an inability for the state to attract and retain knowledge-economy employers.” It also hurts Michigan’s ability to draw business investments, he said.

If Michigan annually appropriated the national average of $280.60 per resident for higher education, as opposed to the $195.52 it does now, the state would spend an additional $850 million more in higher education, according to MASU.

That equates to an average of about $24,000 in costs students now incur when earning a four-year degree.

If the cost shift onto students had not happened, “we would have had an educational attainment in this state that’s much higher than it currently is, we would have had more employers here that would have stayed and new ones that would have come along, and at this very moment we would have more employers from around the country looking to Michigan to set up camp,” Hurley said.

At Muskegon Community College, state funding accounts for 24 percent of this year’s $41 million operating budget, said President Dale Nesbary. State funding for MCC for the 2020 fiscal year increased 1.1 percent.

While the case exists for higher state support, Nesbary said the state has done well historically in supporting community colleges. He recognizes and understands the need for lawmakers to balance competing budget needs such as K-12 education, roads, corrections and law enforcement.

“The state gets a lot of criticism for not funding agencies to the extent that they need to be funded. It depends on your perspective,” he said. “Given where we are in 2019, we’ve done well, but in nominal dollars and actual spending, we are up very little since 2000 as a sector.

“That’s an issue I think all of us are concerned with as providers and supporters of higher education in this state.”

MCC this fall recorded an enrollment of about 4,050 students.

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