FY 2016-17 HIGHER EDUCATION BUDGET                                           S.B. 790:  GOVERNOR'S RECOMMENDATION

 

 

 

 

 

 

 

 

Senate Bill 790 (as introduced)                          Vehicle for Governor’s Recommendation line items is Senate Bill 824.

Committee:  Appropriations

 

 

 

 

CHANGES FROM

FY 2015-16 YEAR-TO-DATE

FULL-TIME EQUATED (FTE) CLASSIFIED POSITIONS/FUNDING SOURCE

FY 2015-16

YEAR-TO-DATE

FY 2016-17

GOV.'S REC.

AMOUNT

PERCENT

FTE Positions..............................................................

N/A

N/A

0.0

0

GROSS.........................................................................

1,534,724,400

1,598,654,400

63,930,000

4.2

Less:

 

 

 

 

   Interdepartmental Grants Received.....................

0

0

0

0

ADJUSTED GROSS..................................................

1,534,724,400

1,598,654,400

63,930,000

4.2

Less:

 

 

 

 

   Federal Funds..........................................................

97,026,400

99,026,400

2,000,000

2.1

   Local and Private....................................................

0

0

0

0

TOTAL STATE SPENDING.......................................

1,437,698,000

1,499,628,000

61,930,000

4.3

Less:

 

 

 

 

   Other State Restricted Funds................................

205,279,500

237,209,500

31,930,000

15.6

GENERAL FUND/GENERAL PURPOSE..............

1,232,418,500

1,262,418,500

30,000,000

2.4

PAYMENTS TO LOCALS..........................................

0

0

0

0

 


 

FY 2015-16 Year-to-Date Gross Appropriation.....................................................................

$1,534,724,400

 

Changes from FY 2015-16 Year-to-Date:

 

  1.  University Operations Increase. The Governor included an overall $59.8 million (4.4%) increase for university operations funded from the School Aid Fund (SAF) $31.2 million, and the State General Fund $28.6 million. The formula continues performance metrics used in FY 2015-16, but distributes half of the funding increase proportional to FY 2010-11 (across-the-board). Prerequisites for receiving performance funding are continued. Tuition restraint is set at 4.8% (FY 2015-16 tuition restraint was 3.2%). The increase brings overall funding for university operations back to its FY 2010-11 level (prior to the FY 2011-12 15.0% reduction). Details of allocations by university are included in Table 1.

59,787,400

  2.  MSU AgBioResearch. AgBioResearch performs agricultural research to promote efficient production, marketing, distribution, and use of farm products. AgBioResearch receives funds from the Federal government under the Hatch Act, as well as State appropriations and local and private revenue. Examples of research conducted include quality and yield-related properties of dry beans, production of leaner, low-fat meat products, and plant biotechnology. AgBioResearch and MSU Extension Services are partners with MSU in both Project GREEEN (Generating Research and Extension to meet Economic and Environmental Needs) and the animal health diagnostic laboratory. The Governor included a 2.3% GF/GP increase for MSU AgBioResearch, increasing funding from $32,508,300 to $33,243,100. This brings MSU AgBioResearch back to its funding level in FY 2010-11.

734,800

  3.   MSU Extension. MSU Extension Services identify and solve farm, home, and community problems through the practical application of Federal and State research findings. MSU Extension Services receives funds from the Federal government under the Smith-Lever Act and the Food and Agriculture Act, as well as State appropriations and local and private revenue. MSU Extension Services operates Michigan's Expanded Food and Nutrition Education Program (EFNEP), serves as a resource for youth 4-H programs, and provides information on family financial planning. The Governor included a 2.4% GF/GP increase for MSU Extension, increasing funding from $27,994,800 to $28,672,600. This brings MSU Extension back to its funding level in FY 2010-11.

677,800

  4.  Michigan Public School Employees Retirement System (MPSERS) Rate Cap. The Governor increases appropriations from $5,160,000 to $5,890,000 based on implementing an employer's cap on contributions for MPSERS unfunded accrued liability (UAL) payments (25.73% of payroll). The affected universities include Central, Eastern, Ferris, Lake Superior, Michigan Tech, Northern, and Western. Payments by the State for the cap will increase from $5.2 million in FY 2015-16 to $10.3 million in FY 2035-36. Over that time period, the cost to the State is estimated at $156.1 million.

730,000

  5.  Tuition Incentive Program (TIP). The Tuition Incentive Program (TIP) is a financial aid program targeted toward low-income middle school and high school students. It was established in FY 1986-87 through language in the Department of Social Services appropriation bill and was eventually transferred to the Higher Education budget in FY 1992-93. The TIP provides an incentive to students to complete high school and go on to college by pledging to pay their tuition and fees for associate degree or certificate programs (Phase I), as well as up to $2,000 at a four-year institution (Phase II). Students in grades 6 through 12 who are Medicaid-eligible for 24 months in a 36-consecutive-month period can qualify for TIP. The Governor recommended increasing the TIP appropriation from $48.5 million to $50.5 million based on program costs, funded by Federal Temporary Assistance for Needy Families (TANF) funds.

2,000,000

 

Total Changes.....................................................................................................................

$63,930,000

FY 2016-17 Governor's Recommendation...........................................................................

$1,598,654,400

 

Boilerplate Changes from FY 2015-16 Year-to-Date:

  1.  Budget Transparency. Posting of financial and other information on university websites. The Governor eliminated the State Budget Director's authority to determine compliance and withhold funding for noncompliance. (Sec. 245)

  2.  State Tuition Grant Program. The Governor changed the application deadline from July 1, to March 1; eliminated the carryforward of unexpended grants; reduced the limit on how much can be awarded to students at a single institution from $3.2 million to $3.0 million; and updated date references. (Sec. 252)

  3.  Tuition Restraint.  The Governor increased the tuition restraint cap from 3.2% to 4.8%; clarified tuition and fee definition with cross-references to the Higher Education Institutional Data Inventory (HEIDI) definition; eliminated university-mandated health insurance from the definition of fees; and updated date references. (Sec. 265)

  4.  Financial Aid. The Governor changed the payment schedule for the Tuition Incentive Program from 50% paid at the beginning of the State's first fiscal quarter, 30% during the State's second fiscal quarter, 10% during the State's third fiscal quarter, and 10% during the State's fourth fiscal quarter; to 55% in the 1st quarter, 40% in the 2nd quarter, and 5% in the 3rd quarter. (Sec. 254) 

  5.  Tuition Incentive Program. The Governor added a new subsection stating that beginning in FY 2017-18, the Department of Treasury shall not award more than $8.5 million annually to eligible students enrolled in the same college or university. The Governor also changed the reference from "general education development" to "high school equivalency" and clarified a requirement in (4) (C) as 24 months within 36 "consecutive" months regarding Medicaid eligibility requirement. (Sec. 256)

  6.  Tuition Restraint. The Governor increased the cap from 3.2% to 4.8%; clarified tuition and fee definition with cross-reference to the manual for the Michigan Higher Education Institutional Data Inventory (HEIDI); eliminated language that states "fee” includes the annual amount a student is charged for coverage by the university-affiliated group health insurance policy; and updated date references.  (Sec. 265)

  7.  Performance Funding. The Governor removed "or has made a good-faith effort" exception regarding prerequisite that a university has entered into reverse transfer agreements; clarified that participation in the Michigan Transfer Network includes "active" participation" and submission of "timely updates" to the Michigan Transfer Network; modified the formula to include half of the funding increase being allocated proportional to FY 2010-11 appropriation; specified that  Carnegie classifications are those existing prior to February 1, 2016;  eliminated legislative intent that, beginning in the 2016‑17 State fiscal year, a university classified as improving is assigned a score of 1; and updated date references. (Sec. 265a)     

  8.  Indian Tuition Waiver. The Governor removed a legislative intent statement that funds be allocated from the General Fund for unfunded North American Indian tuition waiver costs incurred by public universities. The Governor also replaced "postsecondary institution" with "public university" regarding the Department of Civil Rights reporting requirement for the Indian Tuition Waiver Program. (Sec. 268)

  9.  Deleted Provisions. The Governor removed the following sections:  intent regarding appropriations for the next fiscal year (Sec. 236a); purchase of foreign automobiles prohibition (Sec. 239a); provision stating the acceptance and use of Federal or private funds does not place an obligation upon the Legislature to continue the purposes for which the funds are made available (portion of Sec. 242); intent regarding protection/preservation of U of M Douglas Lake Biological Station (Sec. 261); discouraged instruction activity (Sec. 271a); human embryonic stem cell research report (Sec. 274); Yellow Ribbon GI Education Enhancement Program notice/reporting requirements (portion of Sec. 275); prohibits use of funds for the construction or maintenance of a self-liquidating project, requires compliance with Section 238 of 1984 PA 431 and Joint Capital Outlay Subcommittee use and finance requirements, and includes penalty provisions (Sec. 275a); and Federal Educational Rights & Privacy Act compliance (Sec. 293). The Governor also removed legislative intent references in sections 263a and 275.

 

Date Completed:  2-17-16                                                                                              Fiscal Analyst:  Bill Bowerman

 

 


Table 1

FY 2016-17 HIGHER EDUCATION APPROPRIATIONS:  GOVERNOR'S RECOMMENDATION

 

 

Formula Adjustments

 

 

 

 

 

University

FY 2015-16 Year-To-Date Appropriation

Proportional to

FY 2010-11

Critical Skills

Research & Development

Metrics Based on Carnegie Peers

Total Formula Distribution

Other Changes1)

FY 2016-17 Gov's Rec.

Dollar Change from

FY 2015-16

Percent Change

Central

$81,127,100

$1,686,521

$353,218

$36,356

$2,129,009

$4,205,100

 

$85,332,200

$4,205,100

5.2%

Eastern

71,782,500

1,600,107

335,167

0

1,387,614

3,322,900

 

75,105,400

3,322,900

4.6

Ferris

50,369,800

1,023,278

535,365

0

1,281,530

2,840,200

 

53,210,000

2,840,200

5.6

Grand Valley

65,275,700

1,304,404

525,520

0

2,606,335

4,436,300

 

69,712,000

4,436,300

6.8

Lake Superior

13,207,400

267,172

77,946

0

195,826

541,000

 

13,748,400

541,000

4.1

 

 

 

 

 

 

 

 

 

 

 

Michigan State

268,770,700

5,970,663

1,135,139

822,172

2,427,490

10,355,500

 

279,126,200

10,355,500

3.9

Michigan Tech

46,754,700

1,008,651

370,038

135,436

503,648

2,017,800

 

48,772,500

2,017,800

4.3

Northern

45,107,700

950,058

225,633

0

584,616

1,760,300

 

46,868,000

1,760,300

3.9

Oakland

48,371,900

1,068,362

459,061

23,933

1,376,993

2,928,300

 

51,300,200

2,928,300

6.1

Saginaw Valley

28,181,200

583,432

189,942

0

628,304

1,401,700

 

29,582,900

1,401,700

5.0

 

 

 

 

 

 

 

 

 

 

 

UM-Ann Arbor

299,975,000

6,656,142

1,218,828

1,856,291

2,987,258

12,718,500

 

312,693,500

12,718,500

4.2

UM-Dearborn

24,033,100

520,407

178,455

0

458,569

1,157,400

 

25,190,500

1,157,400

4.8

UM-Flint

21,815,400

439,836

228,915

0

434,126

1,102,900

 

22,918,300

1,102,900

5.1

Wayne State

191,451,300

4,507,620

363,064

397,267

1,363,567

6,631,500

 

198,082,800

6,631,500

3.5

Western

104,334,100

2,307,046

446,753

50,067

1,564,149

4,368,000

 

108,702,100

4,368,000

4.2

Subtotal University Operations

$1,360,557,600

$29,893,699

$6,643,044

$3,321,522

$19,929,034

$59,787,400

$0

$1,420,345,000

$59,787,400

4.4%

 

 

 

 

 

 

 

 

 

 

 

MPSERS Reimbursement

5,160,000

 

 

 

 

 

730,000

5,890,000

730,000

14.1

MSU AgBioResearch

32,508,300

 

 

 

 

 

734,800

33,243,100

734,800

2.3

MSU Extension

27,994,800

 

 

 

 

 

677,800

28,672,600

677,800

2.4

Higher Education Database

200,000

 

 

 

 

 

 

200,000

0

0.0

Midwest Higher Ed Compact

115,000

 

 

 

 

 

 

115,000

0

0.0

King-Chavez-Parks

2,691,500

 

 

 

 

 

 

2,691,500

0

0.0

Total Universities

$1,429,227,200

$29,893,699

$6,643,044

$3,321,522

$19,929,034

$59,787,400

$2,142,600

$1,491,157,200

$61,930,000

4.3%

School Aid Fund

205,179,500

0

0

0

0

31,200,000

730,000

237,109,500

31,930,000

15.6

State GF/GP

1,224,047,700

29,893,699

6,643,044

3,321,522

19,929,034

28,587,400

1,412,600

1,254,047,700

30,000,000

2.5

 

 

 

 

 

 

 

 

 

 

 

Grants and Financial Aid

 

 

 

 

 

 

 

 

 

 

State Competitive Scholarships

$18,361,700

 

 

 

 

 

$0

$18,361,700

$0

0.0%

Tuition Grants

34,035,500

 

 

 

 

 

0

34,035,500

0

0.0

Tuition Incentive Program (TIP)

48,500,000

 

 

 

 

 

2,000,000

50,500,000

2,000,000

4.1

Children of Vets & Officer's Tuition

1,400,000

 

 

 

 

 

0

1,400,000

0

0.0

Project Gear-Up

3,200,000

 

 

 

 

 

0

3,200,000

0

0.0

Total Grants/Financial Aid

$105,497,200

 

 

 

 

 

$2,000,000

$107,497,200

$2,000,000

1.9%

Federal Higher Ed Act

3,200,000

 

 

 

 

 

0

3,200,000

0

0.0

Federal TANF

93,826,400

 

 

 

 

 

2,000,000

95,826,400

2,000,000

2.1

Veterans Tax Check-off

100,000

 

 

 

 

 

0

100,000

0

0.0

State GF/GP 

8,370,800

 

 

 

 

 

0

8,370,800

0

0.0

 

 

 

 

 

 

 

 

 

 

 

TOTAL HIGHER EDUCATION

 

 

 

 

 

 

 

 

 

 

TOTAL ALL FUNDS

$1,534,724,400

$29,893,699

$6,643,044

$3,321,522

$19,929,034

$59,787,400

$4,142,600

$1,598,654,400

$63,930,000

4.2%

TOTAL FEDERAL

$97,026,400

0

0

0

0

0

$2,000,000

$99,026,400

$2,000,000

2.1%

TOTAL STATE RESTRICTED

$205,279,500

0

0

0

0

$31,200,000

$730,000

$237,209,500

$31,930,000

15.6%

TOTAL STATE GF/GP

$1,232,418,500

$29,893,699

$6,643,044

$3,321,522

$19,929,034

$28,587,400

$1,412,600

$1,262,418,500

$30,000,000

2.4%

1)         Other Changes column: MPSERS adjustments, increases for MSU AgBioResearch and MSU Extension, and the Tuition Incentive Program.

 

This 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.