Michigan legislators are working to balance Michigan’s next budget, and it’s still unclear how much funding public universities like Oakland University will receive from the state, as of press time Tuesday night.

 

The Michigan state senate and the house have until midnight Wednesday, Sept. 30, to decide on a budget, and then Governor Jennifer Granholm has to approve it and sign it into law. If an agreement isn’t reached by deadline, the state government could be shut down like it was for a few hours in 2007.

 

But this year, if the deadline isn’t met, legislators could vote to install an interim state budget to prevent a shutdown and keep the state running while the budget talks go on.

 

Rochelle Black, OU’s vice president for government relations, said most likely OU and other public universities are in pretty secure positions this year, although she warned that this could change, even in the next couple days, because everything is on the table until Granholm signs the budget. Even if legislators tentatively agree to give one organization a certain amount of money, they could increase or decrease that amount while the discussions are going on.

 

“It’s crazy and chaotic up there right now” in Lansing, Black said.

 

According to the OU general fund budget and tuition rate document presented by the OU administration and approved by the OU board of trustees on July 29, OU projected that the state will give all public universities a 3 percent decrease in funding over last year, and according to media reports and university officials, this looks most likely to happen.

 

So OU predicted that it would get about $50.7 million in state appropriations – taxpayer money the state gives towards the budget – instead of the $51.9 million it got last year.

 

But it also accounted for getting about $1.1 million from the federal stimulus funds, with a total of about $51.7 million.

 

Black said this was because of the Maintenance of Effort Provisions clause in the State Fiscal Stabilization Fund, which is part of the government stimulus package, American Recovery and Reinvestment Act of 2009.

 

According to the U.S. Department of Education (www.ed.gov), states that apply for SFSF money must give the same amount of financial support to public universities and community colleges as it did in fiscal year 2006 (academic year 2005-06).

 

Black said this means that even if the state cuts appropriations to OU by 3 percent, it will be required to use federal stimulus money to do a “backfill” and give the other 3 percent to OU.

 

She said states can apply for a waiver to this clause, and some states have, but Michigan has not yet.

 

“This is a one-time fix, not an ongoing solution,” she said, “because the state will be back at the budget discussions again next year, deciding how much to give to higher education and other public institutions, and it won’t have the stimulus money to fall back on then.”

 

So she believes next year and the year after, higher education will take a hit, because Michigan may not recover from the downfall of the automotive industry, unemployment, home value depreciation and other problems.

 

“Clearly, Michigan is in crisis,” she said.

 

Michigan Promise Scholarship is one thing that is on the chopping block this year, along with other financial aid around $140 million, Black said. Legislators are also considering cutting from aid to local government, health care, libraries and other public institutions. She said that relative to some institutions, public universities have done pretty well.

 

“I don’t think there’s anyone who wants to cut these things,” she said. “But typically, the public also doesn’t want a tax increase.”