Democratic tuition grant program draws fire

By JON GASKELL
Capital News Service
LANSING– Senate Democrats are pushing a proposal that would provide tuition grants for in-state public university and community college students who attend Michigan schools from kindergarten through 12th grade.
Students who attend Michigan public, private, charter or home schools from kindergarten through high school would be eligible for the grants. Those who go to schools elsewhere would be eligible for a portion of the grants based on time spent in Michigan schools.
The annual grants would be equal to the median tuition of Michigan’s public universities, currently $9,575 a year.
Democrats are drafting legislation for both the House and Senate and expect to introduce it in coming weeks.
Senate Minority Leader Gretchen Whitmer, D-East Lansing, said the proposal “represents the single best investment we can make in the future of our state.
“It’s time for us to be bold,” Whitmer said. “and there’s no better place for us to start than by giving each and every child in Michigan the chance to compete in the 21st century jobs market.”
However, House Republican press secretary Ari Adler said the program can’t work. “This is one of those things that when you implement something this big, you are going to run into problems with how to pay for it.
Democrats said the proposal—estimated to cost $1.8 billion annually when fully implemented—would be justified by an improved economy and a more skilled labor force.
“It would bring increased investment and a higher standard of living,” said Bob McCann, communications director for Senate Democrats. “Students who may have left the state for school will now want to go to college here, and students who graduate here will be more likely to stay.”
In recent years, tuition rates for Michigan universities have steadily risen.
Michael Boulus, executive director of the Presidents Council, State Universities of Michigan, said funding for higher education has been reduced by15 percent for 2012.
Boulus said higher education has lost a billion dollars in state aid over the past decade, amounting to cuts of more than $2,000 per student.
According to Boulus, the loss of state funding has forced public universities to push operating costs onto students.
“In the 1970s, the state covered three-fourths of university costs and the rest was covered by tuition. Now it’s almost reversed– state funding provides one-quarter and the rest is tuition.”
McCann said the grant program could help reverse that trend by increasing competition among colleges for students. Because grants would be pegged to median tuition, schools that raise their rates too high above the median would risk losing potential students.
Democrats propose financing the fund by cutting tax credits and incentives.
“Right now, there are $35 billion of these credits and we would want to cut only $3.5 billion,” McCann said.
Sen. Rebekah Warren, D-Ann Arbor, said many of the tax credits are remnants of past attempts to keep businesses in Michigan and may no longer be worth the cost of lost revenue.
“In Michigan, every dollar we spend has to be approved by the Legislature but a lot of these credits don’t have to go through appropriations and they stay on the books long after they are created. Some of these credits have been around since the 1970s and 1980s,” she said.
Warren said the legislation would include forming a commission to determine which tax credits to keep and which to eliminate.
“If there is a better use of that money, we should consider it,” said Warren.
Adler, however, said the Democrats’ $35 billion figure is based on “incomplete and misleading numbers” and doesn’t take into account last year’s elimination of the Michigan Business Tax, which ended many of these credits.
“What that leaves are personal tax exemptions,” Adler said. “Senate Democrats are saying, ‘look you can have free tuition,’ but someone has to pay that bill.”
© 2012, Capital News Service, Michigan State University School of Journalism. Nonmembers cannot reproduce CNS articles without written permission.