“We get the same absolute number of dollars [from the state] that we got in 1997,” U-M president Mark Schlissel told the Ann Arbor Rotary Club in May.
The first question after Schlissel’s talk to the club was a hardball: would the university consider a “payment in lieu of taxes” to the city? Schlissel’s answer was immediate and decisive: “No.”
The answer might be different, the president allowed, if Michigan was a rich school like Harvard or Yale, both of which make PILOT payments. But Michigan, he made it clear, is not in the private schools’ financial league. On the contrary, when adjusted for inflation, this year’s $300 million state appropriation is no more than the university received fifty years ago.
No adjustment was needed to see Michigan’s higher education funding cuts during the Great Recession. In 2011, the legislature slashed the overall higher ed budget by 15 percent. For the U-M in Ann Arbor, by far the largest recipient of state money, that meant a $47 million drop, from $316 to $269 million.
The state is still catching up. Governor Snyder’s proposed $55 billion budget for fiscal 2017 calls for an additional $61.2 million for Michigan’s fifteen public universities–a 4.3 percent increase that would restore overall state support to its 2011 level.
State representative Jeff Irwin is distinctly unimpressed. “Doesn’t it say something about the space we’re in that it’s a positive story that we’re finally back at where we were before [the legislature] cut it so deeply in 2011?” the Ann Arbor Democrat asks.
“Ultimately it comes down to leadership,” Irwin argues. “We don’t have a governor who can stand up to Tea Party extremists in his own party. Until there’s a change in leadership, I don’t see a change. We’re investing more in prisons than in higher education–and that sums up the poor choices we’re making in Lansing.”
The state budget cuts were bad enough, but in Irwin’s view the subsequent increases were “worse” because they weren’t shared equally. “For the last five years, there’s been a systematic effort to give more funding to certain institutions and less funding to other certain institutions,” he says. “Five schools are still going to be behind, and two of them are U-M and EMU right here in Washtenaw County. But Grand Valley State University is way ahead of where they were, like 12 percent higher.”
Cynthia Wilbanks, the U-M’s VP for governmental affairs, confirms that even approval of the governor’s proposed 2017 budget would not make the university whole: “The U-M Ann Arbor would get a 4.5 percent increase, but that still puts us at $312 million,” she says–$4 million less than it got in 2011.
But Wilbanks doesn’t endorse Irwin’s argument that other schools are getting rich at the U-M’s expense. “It’s always tempting to draw a comparison,” she says, but both the U-M and GVSU “receive 16 percent of our general operating budget from the state.” Like Schlissel, she worries more about the shrinking pie as a whole.
Wilbanks offers another perspective on the trend. “The recent high-water mark of state support for U-M Ann Arbor was $364 million in 2002,” she says. “If you had taken the state appropriation in 2002 and just incremented it by the rate of inflation, the appropriation would be $468 million now.”
Regent Mark Bernstein points out that in 1970, Michigan’s public universities were “about 64 percent supported by the state, 26 [percent] by students, 11 [percent] by indirect cost recoveries [on research grants]. In 2016, it’s about 71 students, 16 state, and 11 indirects. The line crossed in 1992-93. That’s when the burden shifted to students.”
And even that doesn’t tell the whole story of Michigan’s waning commitment to higher ed. “There are lots of ways that government supports higher education,” Bernstein notes. “One is direct financial aid to students–and we’re at the bottom. The U-C at Berkeley’s is $12,000. The U-M’s is $750. We’ve seen the state disinvest in higher education when higher education is the most direct predictor of household income.”
To cope with the outright cuts and diminished buying power of its state appropriation, the university has imposed “reductions for various schools and colleges,” Wilbanks says. “And our expenditures on benefits have been reduced because our employees are paying for more of their benefits now.”
Wilbanks sees some hope for the future. “The trend has been positive, and if the state’s economy continues to increase I anticipate we’ll see recommendations for increases.” But no one expects the state to ever again be the main support of its “state supported” schools. In his May talk, Schlissel blamed a long-term shift in public attitudes, from a willingness to invest in shared goods to a sense that people should pay for the services they receive. That’s certainly the case at Michigan, which could now most accurately be described as “student supported.”
None of which means that the state’s $300 million isn’t appreciated. “It matters a lot,” says Bernstein. “The state money goes to the general fund of the university, the most valuable money the university has at its disposal. State funding amounts to [the return on] about another $6 or 7 billion worth of endowment.”