FY 2007-08 HIGHER EDUCATION BUDGET H.B. 4350 & 4351: GOVERNOR'S RECOMMENDATION






House Bills 4350 and 4351 (as introduced)
Committee: Appropriations

Changes from FY 2006-07 Year-to-Date:
  1. University Operations. The Governor added an inflation increase of 2.5% for Michigan State University, the University of Michigan-Ann Arbor, and Wayne State University. The Governor created a separate appropriation bill for these three universities which are characterized as "research universities". 20,950,300
2. University Operations. The Governor included an inflation increase of 2.5% for each of the other 12 public universities and they are funded in a separate bill, along with grants and financial aid. 15,626,900
3. Cooperative Extension Service (CES). The Governor reduced funding for Michigan State's CES by 9.1%; the FY 2007-08 appropriation would be $26,520,700. (2,655,700)
4. FY 2006-07 Payment Delay. To help resolve the FY 2006-07 budget deficit, the Governor proposed a delay in half of the $138.7 million August 2007 State payment for University Operations, the Agricultural Experiment Station, and CES; the Governor included the restoration of this payment in FY 2007-08, with the payment to be made on October 16, 2007. 69,368,000
5. Tuition Grants. For the fifth consecutive year, the Governor eliminated these need-based grants that are awarded to students at independent colleges and universities. (58,768,100)
6. Michigan Merit Award Program. The Governor adjusted funding for the Merit Program to reflect the move to the new Promise Grant Program for the class of 2007; $43.5 million of Merit Program funding was transferred to the new Program and $24.2 million was eliminated due to temporary cost savings related to the payment schedule of the new Promise Grant. (67,700,000)
7. Michigan Promise Grant Program. Public Act 479 of 2006 created this Program that provides merit-based grants of up to $4,000 to students who do well on the high school Merit Exam or who complete two years of postsecondary education with a 2.5 GPA. The State Budget Office estimated that approximately $43.5 million would be required to fund the Program in FY 2007-08. 43,500,000
8. Tuition Incentive Program (TIP). Due to a growing TIP caseload, the Governor recommended a 50.7% increase for this currently $14.0 million Program that promises to pay college tuition for Medicaid-eligible students who graduate from high school. There were 9,046 TIP students in FY 2005-06 compared to 7,637 in FY 2004-05. 7,100,000
9. Project GEAR UP. The mission of the Federal "Gaining Early Awareness and Readiness for Undergraduate Programs" (GEAR UP) is to increase the number of low-income students prepared to succeed in postsecondary education. The Governor targeted this grant for student scholarships in three urban school systems: Detroit, Flint, and Muskegon. 3,000,000
Total Changes $25,421,400
  FY 2007-08 Governor's Recommendation $1,812,912,700
FY 2007-08 HIGHER EDUCATION BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2006-07 Year to Date:
  1. FY 2006-07 Payment Delay. Governor required restoration of the delayed payment on October 16, 2007 and its accrual to each university's 2006-07 fiscal year. (Sec. 212(2))
2. Appropriations Report from Fiscal Agencies. Governor deleted.
3. Tuition Grant Program. Governor deleted due to proposed elimination of the Program.
4. Tuition Incentive Program (TIP). Governor prohibited enrollment in an institution whose primary purpose is to prepare students for the clergy. (Sec. 310(11))
5. Nursing Scholarship and Grant Programs. Governor deleted reference to Master's degree component because it is now part of the Nursing Scholarship Act. (Sec. 312)
6. MiLEAD. Governor deleted due to proposed work project status.
7. Douglas Lake. Governor deleted legislative intent to preserve research value.
8. House Funding Model. Governor deleted.
9. Lists of Required Textbooks. Governor deleted legislative intent for timely access to lists by private bookstores and use of university-administered student accounts, and intent to allow students to decide where to purchase books.
10. Tuition Restraint. Governor changed "legislative intent" for universities to increase financial aid if tuition is increased, to a requirement. (Sec. 436)
11. Per-Student Floor Funding. Governor deleted.
12. Research and Technology Transfer Report. Governor deleted reporting requirement for 12 of the State universities and retained it for Michigan State University, University of Michigan-Ann Arbor, and Wayne State University. (Sec. 712)

Date Completed: 2-14-07 Fiscal Analyst: Ellen Jeffries Bill Analysis @ http://www.senate.michigan.gov/sfa This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations. hihed_gr.doc