Business leaders from across the state and the University Research Corridor (URC) of Wayne State University, Michigan State University and University of Michigan say that the House budget plan for higher education “picks winners and losers.”
House Republicans passed House Bill 4400 last week that would better fund universities with more in-state students for Fiscal Year 2022 using a per-resident student formula, leaving two of the state’s larger research universities with budget cuts.
U of M-Ann Arbor would see a 12.2% budget cut, $39.5 million less, and Wayne State University would see a 4% budget cut, or $8.2 million less, from the FY ‘21 budget. MSU would see a 1.2% increase.
The three universities in the Upper Peninsula will not see any change to their state funding and the other nine universities will see an increase in funding ranging from 1.2% to 10%. The funding will largely be redistributed among universities, as the total House Higher Education budget will not see an increase.
“I know how important it is for all universities to get increases this year, especially with the extra costs that have been incurred by keeping students, faculty and staff safe during this COVID pandemic,” said Mike Jandernoa, 42 North Partners founder. “I don’t agree with the House bill that cuts funding for research universities. But I do believe strongly that the gaps between the funding of the universities need to be much closer, with research universities receiving a premium.”
Jandernoa, who is a long-time donor for Republican candidates, donated $20,000 to the House Republican Campaign Committee on April 16, according to the Michigan Secretary of State.
During a press conference Monday, business leaders and the URC shared support for the GOP Senate-passed plan, which mirrors Democratic Gov. Gretchen Whitmer’s executive budget recommendation, to increase one-time funding by 2% for all of Michigan’s state universities.
“It’s a budget under which all students at all 15 universities benefit and would set up businesses and our state to benefit. Unfortunately, the budget passed by the House is very different. It picks winners and losers and will have a negative effect on students, businesses and Michigan’s economic future,” URC Executive Director Britany Affolter-Caine said.
The speakers at Tuesday’s press conference said this change will make it harder for Michigan’s research universities to attract out-of-state students, which could be detrimental to the state’s talent pipeline.
“We’ve been in a state where our birth rate has been declining. So the number of students in our K-12 system is much smaller than we need to continue to grow in higher education,” said Paul Glantz, Emagine Entertainment co-founder. “We need to bring in out-of-state students to help support the jobs that are open today and the jobs that will be open in the next five to 10 years. So, this idea of deprioritizing out-of-state students at this time, with the baby boomers wanting to retire, is not at all reasonable and would really hurt our competitive advantage in our state.”
Last week, both the House and Senate passed their budget plans and the bills will next go through the conference committee process involving members from both chambers for negotiations.