Income tax proposal could hurt community colleges

By ISAAC CONSTANS
Capital News Service
LANSING — Things were different in the 20th century. Back then, there were all sorts of trade jobs available to high school graduates who just needed some extra training, and those careers were especially abundant in the thriving Michigan manufacturing sector.
Finish up school, learn the craft and trickle into the workforce -– that was the course for a happy middle-class existence.
But, for most people, it isn’t like that anymore.
“Michigan’s still a very heavily manufacturing-based economy. There’s still a lot of manufacturing in Michigan,” said Michael Hansen, president of the Michigan Community College Association. “It’s just that manufacturing has changed, where it has become more automated, more technical, more complex and requires therefore higher levels of skill.
“It’s just that the nature of jobs is changing such that the vast majority of those jobs require some sort of post-high school education.”
Daniel Hurley, chief executive officer of the Michigan Association of State Universities, said it is particularly difficult to convince Michigan parents who grew up around, with or as factory workers that sending their children to college is now essential. It’s a lot of money, after all.
That’s where community colleges have historically come into play. However, new bills in the Legislature that would phase out the state income tax could threaten that role.
Community colleges were designed to be of minimal cost to students and families. Despite rising costs of maintenance and technological modernity, attending a community college is still significantly cheaper than a four-year university.
The Michigan Community College Association reports that the average in-district credit hour in 2013-2014 cost $98.13 for state community colleges, about a quarter of the cost of a Michigan State University in-state credit hour.
“The hallmark of community colleges since their inception has been affordability and trying to keep tuition low,” Hansen said. “We’re able to do that because we have two other major revenue streams, and that is local property tax and state appropriation.”
Community colleges often conceive their curricula with the job requirements of local employers in mind.
Thomas Hawley, director of college relations for West Shore Community College in Scottville, said college officials talk to state and local businesses when they design their course offerings.
“The greatest need that I think many communities across Michigan are facing is finding a workforce pool that is committed to the work they do and trained and ready to go to work,” Hawley said. “If Michigan wants to remain competitive, it needs to have a trained workforce. And that’s what community colleges do.”
Yet amid the expansion of educational opportunity, the foundational pillar of community college affordability has tapered across the state. Their three main funding sources — state appropriations, property tax and tuition — used to split the bill evenly 30 years ago, said Hansen. Fifty years ago, Hansen said, states would subsidize 50 percent of the funding.
However, state aid hasn’t offset rising costs equally, and over the past 30 years, students have had to foot a larger portion of the bill.
The association says tuition and fees now account for 43 percent of community college revenue, while local property taxes cover 35 percent. State funds have dropped to 20 percent.
Bills introduced in the House and Senate this session could carve further into state support. The bills propose to phase out the state income tax.

The Legislature is still in the early stages of considering the bills, which are in the Senate Finance Committee and House Tax Policy committee.
Rep. Larry Inman, R-Williamsburg, who sits on the Appropriations Subcommittee on Community Colleges, said he is not convinced eliminating the income tax is a good idea. Although he said he believes that Michigan residents deserve “a break” with lower state taxes, Inman opposes the elimination of the income tax without a greater analysis of its gradual effects.
“I’m going to continue to support a continuation of funding for capital outlay projects and assisting universities and community colleges,” said Inman, who earned an associate degree at Northwestern Michigan College, a community college in Traverse City.
Hansen said it’s impossible to know how the income-tax proposals could impact funding until alternative revenue sources are proposed.
Inman brought up a sizable state sales tax as one possible replacement.
Still, Hansen said, cuts could be expected.
“They’re already having to operate under fairly lean, relatively, revenue constraints,” Hansen said of community colleges. “Program evaluation and service evaluation is just the natural routine for colleges, where if there are programs that are not impactful or too costly or not contributing the needs of students or the community, they get those cut anyway.
“But yeah, if things got really bad, they’d have to look at programs and start cutting programs and/or try to raise fees.”
The state’s 28 community colleges offer a wide range of programs to answer business calls for trained workers. Yearlong certification programs and associate degrees are attainable.
The colleges offer training ranging from writing to welding to mechatronics. For many openings, anywhere from an extra class to an associate degree can be enough to snare the job.
Community colleges serve as centers for local residents as well. From plays to festivals, they are community beacons and draw people to support regional interests.
Inman was recently involved in the passing of a $7 million state contribution, that the college matched, for a campus renovation and a new learning center at Northwestern Michigan College.
For many students, enrollment in a four-year university is the eventual goal. Hurley sees community colleges as excellent conduits for those who want to reach universities in the future.
“I have four degrees: a two-, four-, six- and eight-year degree,” said Hurley. “My proudest was my associate degree in community college.”
When faced with funding shortages, community colleges have to decide the lesser evil: quality deterioration or tuition hikes. So far, the decision has been easy.
“We never want to diminish the quality, because we know we’re preparing students for a future in a very competitive world,” West Shore Community College’s Hawley said. “Technology and all other things need to be current, and so do we.
“We at times have had to increase our tuition, but we keep it at a modest level that’s affordable, so that we don’t have to diminish that quality of what we deliver.”