FY 2007-08 HIGHER EDUCATION BUDGET H.B. 4350 (CR-1*): CONFERENCE REPORT


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Amount Over/(Under) GF/GP Target: $ 0
Changes from FY 2006-07 Year-to-Date:
  Items Included by the House and Senate
1. FY 2006-07 Payment Delay. To help resolve the FY 2006-07 budget deficit, the August 2007 payment for University Operations, AES, and CES was delayed. To restore the delayed payment, $138.7 million is reinstated to the FY 2007-08 base and $138.7 million was repaid on October 16, 2007. 277,472,000
2. FY 2006-07 Michigan Public School Employees Retirement (MPSERS) Savings. Executive Order 2007-3 reduced defined benefit contributions to MPSERS for seven of the universities. This one-time re-valuation of the system's assets resulted in a base adjustment for FY 2007-08. 4,022,900
3. Michigan Merit Awards. The Governor, House, and Senate adjusted funding for Merit Awards to reflect the move to the new Promise Grants for the class of 2007; $43.5 million of Merit funding was transferred to Promise Grants and $18.2 million was eliminated due to temporary cost savings related to the payment schedule of the new Promise Grants. (61,700,000)
4. Michigan Promise Grants. 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 $43.5 million would be required for FY 2007-08. 43,500,000
5. Tuition Incentive Program (TIP). Due to a growing caseload, this program that promises to pay college tuition for Medicaid-eligible students who graduate from high school was increased from $14.0 million to $21.0 million. There were 9,046 TIP students in FY 2005-06 compared to 7,637 in FY 2004-05. 7,100,000
6. Elimination of Michigan Leadership, Education, and Development (MiLEAD).   (5,000,000)
7. Project "Gaining Early Awareness and Readiness for Undergraduate Programs" (GEAR UP). The mission of this new Federal program is to increase the number of low-income students prepared to succeed in postsecondary education. The Project plans to target three urban school systems: Detroit, Flint, and Muskegon. 3,000,000
Conference Agreement on Items of Difference
8. Format Change. The Governor and House recommended two separate Higher Education budget bills: one for the three "research" universities and one for the other 12 universities; the Senate retained one bill for all 15 universities. The Conference adopted one bill with separate articles for the research universities, State universities, and financial aid.
9. University Operations. An increase of 1.0% was added to each university. 14,128,100
10. Agricultural Experiment Station (AES) and Cooperative Extension Service (CES). The Governor reduced CES by 9.1%; the House retained AES and CES at their FY 2006-07 funding levels of $33.8 million and $29.2 million, respectively. The Conference added an 0.5% increase to each. 302,300
11. State Competitive Scholarships. New Federal funds were added, resulting in a total appropriation of $35.5 million with total Federal revenue of $2.9 million. 1,400,000
12. Tuition Grants. The Governor recommended elimination of these need-based grants for students at independent colleges; the Conference retained the FY 2006-07 year-to-date appropriated level of $56.7 million, funded in part by $1.4 million in carryforward funds. 0
Total Changes $285,625,300
  FY 2007-08 Conference Report Gross Appropriation $1,896,375,700
FY 2007-08 HIGHER EDUCATION BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2006-07 Year to Date:
  Items Included by the House (House Bills 4350/4351) and Senate (Senate Bill 511)
1. University Payment Schedule. Governor deleted "equal" from monthly distribution; House/Senate retained. (Sec. 212(1))
2. FY 2006-07 Payment Delay. Governor, House, and Senate required restoration of the delayed payment on October 16, 2007, and its accrual to each university's 2006-07 fiscal year. (Sec. 212(2))
3. Appropriations Report from Fiscal Agencies. Governor deleted; House and Senate retained. (Sec. 212(4))
4. Nursing Scholarship and Grant Programs. Governor, House, and Senate deleted reference to Master's degree component because it is now part of the Nursing Scholarship Act. (Sec. 312)
5. MiLEAD. Governor, House, and Senate deleted.
6. Douglas Lake. Governor deleted intent to preserve research value; House and Senate retained. (Sec. 402/307)
7. House Funding Model. Governor, House, and Senate deleted.
8. Lists of Required Textbooks. Governor deleted intent for timely access, House/Senate retained. (Sec. 426)
9. Macomb County. House and Senate required report on county residents enrolled at public universities. (Sec. 463)
10. King-Chavez-Parks Initiative. House and Senate changed all references to "minorities", "underrepresented", and "males" to "academically and economically disadvantaged". (Secs. 501-506)
11. Distance Learning. Governor, House, and Senate revised definition to include instruction that occurs solely outside a traditional classroom and for which tuition rates are different than in-State main campus resident rates. (Sec. 701)
12. New Academic Programs. House and Senate added Presidents Council-approved programs. (Sec. 701a)
Conference Agreement on Items of Difference
13. Tuition Grant Program. Governor deleted due to proposed elimination of the Program; House restored but deleted fund carry-forward provision and Ferris/Kendall College student eligibility; Senate retained current year language with new requirement to spend "substantially all" of the appropriated funds; Conference Report added $2,100 grant minimum and retained fund carry-forward provision. (Sec. 302)
14. Tuition Incentive Program (TIP). Governor and House prohibited enrollment in an institution whose primary purpose is to prepare students for the clergy; Senate and Conference Report did not. (Sec. 310(11))
15. University Research Corridor. House created legal entity; Conference Report did not. (Sec. 403)
16. Future Farmers of America. Senate had $100 placeholder within MSU; Conferees earmarked $80,000. (Sec. 434)
17. Tuition Restraint. Governor changed "legislative intent" for universities to increase financial aid if tuition is increased, to a requirement; Conference Report retained legislative intent status. (Sec. 436)
18. Per-Student Floor Funding. Governor and House deleted; Senate and Conference Report retained. (Sec. 450)
19. Suicide Prevention. House/Conference Report added intent for universities to develop education programs. (Sec. 462)
20. Technology Commercialization Incentive Fund. Senate required plan from each university on its process to inform private and public sectors regarding research and technology that could be developed commercially; Conference Report combined House/Senate concepts. (Sec. 464)
21. Independent Commission. Senate added intent for audits of university spending; Conference Report deleted. (Sec. 465)
22. Coordination of Purchases. House and Senate added intent for universities to coordinate purchases of goods and services and to report on pooled purchases and savings achieved; Conference Report combined House/Senate. (Sec. 466)
23. Performance Standards. Conference added intent to establish standards. (Sec. 467)
24. Community Colleges. Senate/Conference Report added intent for universities to facilitate transfer of credits. (Sec. 603)
25. Education Degrees. Governor/House/Conference Report deleted report on efforts to increase degrees conferred for teaching high school math, physics, chemistry, biology, foreign languages, and in critical shortage areas.(Sec. 711)
26. Research and Technology Transfer Report. Governor deleted requirement for 12 of the universities, retained it for Michigan State University, University of Michigan-Ann Arbor, and Wayne State University, Conference deleted. (Sec. 712)
27. Federal Privacy Act. Senate/Conference added intent to comply. (Sec. 714)
Date Completed: 10-26-07 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_cr.doc