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House Bill 4496 (as passed by the House)
Sponsor: Representative John Walsh
House Committee: Appropriations
Senate Committee: Education

Date Completed: 11-30-11

The bill would amend the Community College Act to revise the prohibition that prevents community colleges from granting baccalaureate degrees. The bill would allow community colleges to grant a bachelor of science in nursing degree, or any baccalaureate degree in cement technology, maritime technology, energy production technology, or culinary arts.

A community college could not operate a program that granted a bachelor of science in nursing degrees, however, unless the Michigan Board of Nursing approved the program.

MCL 389.105 & 389.121

The bill would have an indeterminate impact on the State and local community college districts. The bill would result in increased operational costs for community colleges that chose to offer baccalaureate degrees under the provisions of the bill. Costs to each college would depend on staffing needs, equipment, and the capacity of current infrastructure. The ability to provide these programs also would depend on accreditation, the availability of qualified instructors and, specifically for bachelor of science nursing degrees, clinical placement availability.

Revenue sources for Michigan public community colleges consist mainly of State aid, local property tax revenue, and tuition. Based on information contained in the 2009-10 Activities Classification Structure (ACS) Data Book and Companion, sources for community college operating revenue statewide were reported as follows:

Source Amount Percent of Total
  State Aid $293,489,146 18.9%
Property Tax Revenue 565,647,618 36. 5
Tuition and Fees 633,514,887 40. 8
Other 58,716,048 3. 8
  Total $1,551,367,699 100.0%

The bill would not require an increase in State aid. Unless a community college district were able to pass a voter-approved millage increase, growth in property tax revenue would not support the cost of new programs. The assumption is that tuition would be the main source of funding for baccalaureate programs at community colleges. To cover the higher costs of
granting baccalaureate degrees, if the cost of the baccalaureate programs exceed revenue from current tuition rates, a community college could charge a higher amount for the baccalaureate program, or provide for an overall increase in tuition for all programs. That decision would be up to each community college governing board. For 2011-12, the per credit/contact hour in-district tuition and fee rates at Michigan public community colleges range from $66.70 at Oakland Community College to $100.50 at Jackson Community College. The statewide unweighted average tuition and fee rate is $85.70. By comparison, the 2011-12 statewide unweighted average per credit hour tuition and fee rate at Michigan public universities for resident undergraduates is $347, and ranges from $261 at Saginaw Valley to $464 at Michigan Technological University.

The bill could affect how funding is allocated among Michigan's 28 public community colleges to the extent a formula is used to distribute funds in the future. Factors that would benefit colleges that added baccalaureate degrees include contact hours and degrees granted. The bill also could affect tuition revenue for universities, to the extent that it diverted students from universities to community college baccalaureate programs. It is not possible to estimate the extent to which the bill would provide educational opportunities to students who otherwise will not obtain a baccalaureate degree, compared to drawing future students from universities.

Fiscal Analyst: Bill Bowerman

Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. 4496/1112