Michigan's current funding formula is based on the "degree Completion-Based University Performance Funding formula." Governor Rick Snyder recommended that $36.2 million be added to the FY13 funds and distributed through four equal components based on a "three year average growth of undergraduate degree completions, three year average number of undergraduates receiving Pell Grants, three year average degree completions in critical skills area (science, technology, engineering, mathematics and health fields) and tuition restraint. These factors have Michigan's colleges competing against each other, giving the college's incentive to raise tuition to make up for money lost to other schools.
Comparing full time equivalent (FTE) students, the price of each student, and enrollment, with all states, Michigan is one of the lowest states in appropriations and enrollment. Comparing the current funding formula in Michigan to Ohio's performance funding formula, there is a difference in metrics as to how colleges gain funding from the state. For instance, Ohio gives their public universities incentives to enroll "at risk students" - students coming from lower SES areas - and reward based on course and degree completion. Each degree is weighted differently, for example, STEM (Science, Technology, Engineering, and Math) degrees completed will receive more money from the state than a Political Science degree. Ohio also includes a reward to bring in out of state students and keep them there for graduate school, whereas Michigan rewards on degree completion and does not reward graduate programs or even look at rewarding for at risk students. Allocation of money within a similar performance funding formula may make a difference in public universities receiving needed money while providing an even playing field.
A suggested model for Michigan's appropriation for higher education is a model similar to Ohio's. The metrics used to push Ohio's colleges to receive money from the state are very reasonable. This model helps improve graduation rates of quality students within the four years it should take a student to graduate, and more importantly, make the education affordable. Another significant piece in Ohio's funding model is their "stop-loss" provision that caps the amount of money a university can lose the following year to 1% from the previous year funds. Taking some of the guidelines Ohio uses to fund their schools and implementing them in Michigan may be beneficial.
Looking to the future, Michigan might want to consider changing the funding formula for their 15 public universities and community colleges in the state. The current appropriations formula not only limits newer colleges from rising in prestige, but also limits the education of their student population. If a higher education is needed to qualify for a position at a job, why make it more difficult for the student to receive that education.
"Higher Education Appropriate Report 2013," Accessed: 18 February, 2013. http://www.house.mi.gov/hfa/PDFs/HigherEdAppropsReport2013.pdf
"Recommendations of the Ohio Higher Education Funding Commission," Accessed: 19 February, 2013. https://www.ohiohighered.org/site /ohiohighered.org/files/upl ads/financial/ssi/Ohio%20Higher%20Education%20Funding%20Commission%20-%20Report.pdf
Memorandum:Kyle I. Jen, Deputy Director. House Fiscal Agency, 21 February 2012. http://www.house.mi.gov/hfa/PDFs/university%20funding%20policy%20memo%20feb12i.pdf
"SHEF-State Higher Education Finance FY11," accessed: 20 February, 2013. http://www.sheeo.org/resources/publications/shef-%E2%80%94-state-higher-education-finance-fy11