Proposed tuition caps could strain public universities

By BROOKE KANSIER
Capital News Service
LANSING — Gov. Rick Snyder’s new budget proposal would raise funding for Michigan’s public universities — but that money would come with a catch.
The proposed 2 percent increase would mean about $28 million more for higher education and raise the total state budget for universities to $1.544 billion. But in order to claim their share of the increase, universities would have to work with a limit of 2.8 percent when increasing next year’s tuition rates.
“So the question universities have to ask themselves is, do I want to forgo that money and exceed the cap? Or do I make it work?” said Mike Boulus, executive director of the Presidents Council, a nonprofit organization representing Michigan’s 15 public universities.

The 2.8 percent cap is lower than caps introduced in past years — last year, it was 3.2 percent. The budget increase is also significantly lower than the 6 percent universities saw last year.
“The modest increase coupled with tuition restraints does create budget pressures for us,” said J.J. Boehm, director of media and communications relations at Saginaw Valley State University. “In terms of actual dollars, a 2.8 percent tuition increase at SVSU is less than an increase of the same percentage at other institutions with higher base tuition.”
According to Boulus, less flexibility in tuition rates and less state money could potentially also mean less support for students in financial aid and other programs.
“When you hold tuition down, we can’t provide as much financial aid as we’d like to need-based families,” Boulus said, adding that the council plans to work with legislators and negotiate greater flexibility in the cap. “If the cap stays at 2.8 percent, my hunch is that every university will be right at that cap.”
Michigan’s legislature has not yet approved the budget, and the state’s largest universities are still processing the budget proposal.
The University of Michigan’s public affairs director, Rick Fitzgerald, said the university won’t know what effects the potential cap could have until officials begin planning its budget in June.
“Setting a tuition rate or the amount of increase is always the last piece in the process,” Fitzgerald said.
U-M raised its tuition 1.6 percent last year. Michigan State University also saw an increase, with its cost per credit hour raised by 2.62 percent from fall semester 2013 to 2014.
Fitzgerald said the biggest cost to universities is labor.
“It takes people to teach classes and to keep the labs open, to maintain residence halls and make food in the residence halls, and those are all a cost,” Fitzgerald said. “We have to keep up with inflation.”
While Snyder’s proposed budget provides an increase, the higher education budget still falls under levels last seen under former Gov. Jennifer Granholm. This is due to budget cuts under her administration and significant cutbacks in response to a budget crisis during the early Snyder administration.
“We did increase our institutional financial aid to help offset the loss of state of Michigan aid programs for the neediest resident undergraduates,” MSU Director of Financial Aid Rick Shipman said.
Education is one of the few areas in Snyder’s budget with proposed budget increases. Other departments face cuts under current and projected budget deficits.
According to Boulus, the Snyder administration intends to compensate for past cuts to education and plans to continue to increase the education budget.
“Education is the key to Michigan’s future,” Boulus said. “The states with the most college graduates have the strongest economies. We’re only going to be better off.”