Proposed budget would change funding formulas for state universities based on MI residents enrolled | Michigan Radio

Proposed budget would change funding formulas for state universities based on MI residents enrolled

May 24, 2021

The University of Michigan is one of the public universities that could lose funding under the House's proposed funding formula.
Credit Emma Winowiecki / Michigan Radio

The Michigan House of Representatives has proposed a change to the way the state allocates funding to public universities. The proposed plan would tie state funding to the number of full-time Michigan residents enrolled in a university.

Some state schools, like Central Michigan University and Eastern Michigan University, would get more in yearly funding. But two major research universities, the University of Michigan and Wayne State University, would lose millions of dollars.

U of M would lose more than 12% of its funding, which is nearly $40 million during the first fiscal year the policy is in place, losing another $125 million over the next three years. Wayne State would lose about 4% or $8 million during the first year, and another $29 million over the next three years.

Dan Hurley is the CEO of the Michigan Association of State Universities. He says the existing formula for allocating funding leaves something to be desired, but the new formula creates more problems than it solves.

"It’s okay for state lawmakers to reallocate funding to their institutions, but it should absolutely not come at the cost of creating winners and losers and cutting funding to other state universities," Hurley says.

The exisiting formula takes into account six metrics when providing funding to state universities. Those metrics include undergraduate degree completion, research and development expenditures, and six-year graduation rates.

Hurley says the people who will feel these cuts the most are the students at these institutions.

"To see the tens and tens of millions of dollars of state funding cuts over the next three years, if this house plan were to take place, would involve one of two things: huge increases in tuition, or huge cuts across the university enterprise," he says. "One thing that is a hallmark of our Michigan public universities is quality: high educational quality. And we don't want to see that take a hit. And with the House plan, something would have to give."

Hurley also says the state has chronically underfunded higher education for years now. He says Michigan ranks 44th in per capita funding for higher education.

"And by still, collectively, not increasing funding for Michigan’s 15 universities, it sends a profound message in how we value education in this state, how we value the educational and career ambitions of our next generation, how we respect and value employers that are currently located in the state and headquartered companies that might want to locate to Michigan."

Both the University of Michigan and Wayne State University have put out statements asking the Legislature to reconsider the plan.

Editor's note: U of M holds Michigan Radio's license.