University Governance, State Appropriations and Tuition

University Governance

Michigan's Constitution (1963) contains specific and critical language with respect to the autonomous nature of university governance in Michigan. Article VIII grants the university governing boards general supervision of their respective institutions, and sole control over their expenditures. The state universities exist as distinct entities within Michigan, separate from the branches of government. However, they are supported by public funds, as required by Article VIII, Section 4 of the 1963 Constitution.

The Tuition - Appropriations Connection

Michigan's public universities depend on two primary sources of funding: the public (state appropriations) and their students (tuition and fee charges). At most institutions, the state supports less than half of the cost of educating a student at a public university. Today's economic environment in Michigan furthers the financial challenges to its public universities.

As universities bear cost increases that exceed the rate of inflation (primarily due to energy, health insurance, and high tech equipment needs), the state of Michigan continues to face a budget shortfall.

The graph below illustrates the relationship between year-to-year tuition and appropriations movements. Smaller tuition changes follow greater appropriations increases, and vice versa.

Appropriations

Budget balancing in December 2002 required the first decrease in state funding for Michigan higher education in over a decade. This was followed by a 1.5% Executive Order in February 2003, a 6.74% decrease for the universities' base budget for FY '04, and yet another 5% Executive Order in December 2003. All told, state appropriations to its public universities has been reduced by 15% or $225 million in just the past 15 months. In order to respond to this dramatic disinvestment in state support, the universities have cut an additional $160 million internally from their budgets.

The following materials, presented in February 2004 at the Senate subcommittee hearing on higher education appropriations provide a further articulation of the impact of state support for Michigan's public universities.

Written testimony - House Subcommittee Hearing - April 28, 2004

Written testimony - Senate Subcommitte Hearing - February 20, 2004

Accompanying slideshow - Senate Subcommittee Hearing