0178: CONFERENCE REPORT (Date Completed: 5-23-11) - FY 2011-12 HIGHER EDUCATION BUDGET

FY 2011-12 HIGHER EDUCATION BUDGET S.B. 178 (CR-1): CONFERENCE REPORT

[Please see the PDF version of this analysis, if available, to view this image.]

Amount Over/(Under) GF/GP Target: $ 0

Changes from FY 2010-11 Year-to-Date:
Items Included by the Senate and House
1. Tuition Grants/State Competitive Scholarships. The Governor eliminated the $31,664,700 Tuition Grant Program and the $19,861,700 State Competitive Scholarship Program to fund a new Pathway to Higher Education Program. The House, Senate and Conference maintained the existing programs.	0
2. Cooperative Extension Service (CES) and Agriculture Experiment Station (AES). The Governor reduced the CES and the AES by 15.0% and rolled the programs into one line item. The House, Senate, and Conference concurred.	(9,289,900)
3. Tuition Incentive Program (TIP). The Governor, House, Senate, and Conference increased funding from $37.4 million to $43.8 million based on individuals eligible for funding and costs associated with the program.	6,400,000
4. Federal Funding Shifts. The Governor, House, Senate, and Conference shifted $93,826,400 in funding for financial aid programs to Temporary Assistance for Needy Families (TANF), offsetting a like amount in State General Fund and State Restricted sources of funding. This eliminates all General Fund support for financial aid except for $1.0 million appropriated for Children of Veterans and Officer's Survivor Tuition Programs.	0
Conference Agreement on Items of Difference
5. School Aid Funding Shift. The Governor shifted $699,719,500 from the State General Fund to the School Aid Fund (SAF) for support of university operation line items. The House concurred with the Governor. The Senate reduced SAF support to $200.0 million. The Conference included $200,019,500 in School Aid Fund revenue.	0
6. University Operations Reductions. The Governor reduced university operations funding by $213,110,200 (15.0%). The Senate concurred. The House included a 15.0% reduction, but applied 14.0% across-the-board and 1.0% based on a sliding scale formula with larger reductions for universities receiving a higher amount of State funding per student. The Conference concurred with the Governor and Senate. Table 1 lists reductions by institution.	(213,110,200)
7. Tuition Restraint Incentive - Operations Reduction. The Governor and House reduced university operations by $83.0 million and appropriated that amount in a separate tuition restraint incentive line item for each university. Individual university incentive amounts are based on that university's average tuition/fee rate increase over the last five years, ranging from 5.1% to 9.8% of proposed FY 2011-12 appropriations. The incentive would be paid only if a university held its FY 2011-12 tuition/fee rate increase below the prior five-year statewide average of 7.1%. The Senate eliminated tuition restraint and restored funding to operation line items. The Conference concurred with the Governor and House.	0
Total Changes	($216,000,100)
FY 2011-12 Conference Report Gross Appropriation	$1,362,278,400

FY 2011-12 HIGHER EDUCATION BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2010-11 Year to Date:

Items Included by the Senate and House

1. Restored Sections. Compliance with the DMB Act, use of Internet for reporting, buy American, depressed and deprived communities, the U of M Douglas Lake Biological Station, GI Education Enhancement Program (Conference included intent that universities include in admission application process a question regarding veteran or active military/national guard/reserve status, or the spouse or dependent thereof, in order to more quickly identify potential educational assistance available to that applicant), new degree programs, and various reporting requirements.

2. Deleted Sections. The Governor, House, and Senate deleted Tuition Tax Credit notification, intent regarding per-student floor funding, Macomb County Report, research technology report, and urban centers.

3. New Sections. Reports on efforts to accommodate religious beliefs of students enrolled in accredited counseling degree programs, and reports on stem cell research were added by the House and Senate. (Sec. 472 & 473) School Aid Fund revenue proration mechanism included by Governor, House, and Senate. (Sec. 483)

Conference Agreement on Items of Difference

4. Research University. Defines. House deleted. Senate modified to include "high" research. Conference included Senate change and also included "doctoral" research in the definition. (Sec. 203)

5. Foreign Vehicle. Prohibits lease or purchase if competitively priced/comparable quality Michigan/USA automobiles available. Governor and House removed; Senate and Conference included. (Sec. 210)

6. Budget Transparency. House and Conference added more detailed reporting. (Sec. 218)

7. Grant Programs. House and Conference adjusted maximum grant award to reflect current amounts. Governor and House adjusted TIP allocations; Conference revised quarterly allocation for all programs. (Sec. 301, 302 & 308)

8. Tuition Restraint - Criteria. Included by Governor, House, and Conference; deleted by Senate. (Sec. 436)

9. Funding Formula. Beginning FY 2012-13, university funding shall be allocated by formula developed by the Budget Director. Senate deleted. House and Conference included formula - developed by the Legislature. (Sec. 437)

10. Purchases of Goods and Services. Requires public universities to coordinate purchases of goods and services whenever possible. Requires report. Governor and House deleted; Senate and Conference restored. (Sec. 466)

11. Academic Program Accreditation. House and Conference section requiring report on direct expenditures for academic program accreditation. (Sec. 470)

12. Transfer Credit Reporting. House and Conference require universities to report regarding the number of transfer credits rejected for incoming students, reported both by academic area and prior institution. (Sec. 471)

13. Adult Co-resident Health Benefits-5.0% Penalty. House language would withhold 5.0% of amount appropriated to each university unless the university verifies that it is not providing fringe benefits for any adult co-resident of a university employee who is not married to that employee or a dependent of such an adult co-resident. Conference replaced with legislative intent that benefits not be provided, removes penalty, and requires report. (Sec. 474)

14. Joint Capital Outlay Subcommittee (JCOS) Requirements. Senate and Conference included 1.0% penalty for each violation of JCOS requirements. House included different penalty. (Sec. 482)

15. Community College Issues. The House revised current-year language to create a committee to improve transferability of core college courses between community colleges and universities on a statewide basis. Senate and Conference maintained current-year language. (Sec. 603) House and Conference included a new section stating intent that universities work with community colleges to implement transfer of credits from a university to a community college to enable award of credentials. (Sec. 604)

16. Anticipated Appropriations for FY 2012-13. Governor and House included line-item appropriations for FY 2012-13. Senate and Conference did not include line items, and instead included boilerplate stating intent to fund at the FY 2011-12 level, except for adjustments for economics, caseloads, Federal match rates, and available revenue. (Sec. 1201)

17. University Financial Aid. Intent that universities increase expenditures for financial aid by at least the same percentage as increases in tuition and fees. Senate included; Governor, House, and Conference deleted.

Date Completed: 5-23-11 Fiscal Analyst: Bill Bowerman This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations. hihed_cr.docx