During the 1980s, Michigan's 15 public universities received about 75 percent of their funding from the state and only generated about 25 percent of their funding from tuition dollars, according to Mark Burnham, Michigan State University's vice president for governmental affairs. Today, those ratios have flipped, and this year's budget negotiations do not seem likely to halt the downward trend.
Higher education currently makes up about 18.6 percent of the general fund and general purpose state budget, garnering a total of $1.58 billion in fiscal year 2010-11, according to the House Fiscal Agency. In fiscal year 2000-01, appropriations were $350 million - or 18 percent - more, not adjusted for inflation. About 94 percent of those dollars go toward the operation of the 15 public universities and MSU's Extension. Despite these general appropriations decreases, and despite extreme cuts in state financial aid during the past decade - including the elimination of the Michigan Promise Grant - universities saw a 13 percent increase in student enrollment in the interval between fiscal year 1999-2000 and fiscal year 2009-10, according to the Senate Fiscal Agency's report, "Michigan's Budget and Total State Spending: A 10-Year History.". The budget for fiscal year 2011-12 seems likely to cut university funding further. Gov. Rick Snyder's proposal, unveiled in February, suggests cutting appropriations by 22 percent with an additional $43.8 million set aside as a tuition incentive for schools that choose to keep tuition increases below 7.1 percent. The incentive would bring cuts down to 15 percent. The House higher education appropriations subcommittee agrees mostly with Snyder's proposal, maintaining his tuition incentive fund. They, however, only proposes cutting 14 percent across the board, with an extra 1 percent cut spread out on the basis of a new sliding scale formula.
The Senate higher education appropriations subcommittee, on the other hand, dismisses the tuition incentive and creates a 15 percent cut for all universities.
Despite the continued disinvestment, the higher education budget negotiations tends to not be an entirely partisan issue. A generalization is dangerous, but if either party is inclined to be more sympathetic to higher education's funding pinch, it is the Democratic Party. However, if any partisan battles develop during this year's budget negotiations, the Republicans hold a clear advantage in both the House and Senate, as well as controlling the governor's seat. In general, MSU attempts to avoid any partisan issues to focus on working with lawmakers, Burnham said.
"As an institution, we work with the state, whoever's in charge," he said. "And it takes some time to convince whichever party just took over that we weren't in cahoots with the previous party, but we were working with the institutions of the state. ... And that takes communication, it takes time. They have to develop trust."
On top of its lack of partisan defenders, university funding does not draw many interest groups. Rather, the issue's biggest advocates are the 15 public universities themselves. The schools each have a governmental affairs office or another branch of administrations specifically designed to communicate with lawmakers and bureaucrats as well as lobby on behalf of more funding for general appropriations, financial aid and special projects. In addition to working with the state government, which is constitutionally obligated fund public higher education, the universities also lobby the federal government for grants and earmarks.
Outside of the universities, one of the most active groups in favor of increased higher education funding is the Presidents Council, State Universities of Michigan. The group was formally established in 1952 and implicitly designed as a lobbying entity. It is paid for and organized entirely on behalf of the 15 universities, and in addition to its lobbying activities, it serves as an informational resource for the schools.
No interest groups particularly lobby against higher education funding. It is not a popular issue to oppose, and aside from other portions of the budget looking for dollars, no groups would directly benefit from decreased funding. However, some researchers, notably at Midland-based think tank Mackinac Center for Public Policy and at the federal-level Center for College Affordability and Productivity, suggest continued investment in higher education will not help the economy, as often is touted by universities. In fact, increased money for universities likely has a negative relationship with economic growth, according to the article "Michigan Higher Education: Facts and Fiction," which was published through the Mackinac Center and co-written by Matthew Denhart, the administrative director at the Center for College Affordability and Productivity.
"The statistical correlation between state and local governmental expenditures on higher education and the rate of economic growth (growth in real income per capita) is typically negative - higher spending for universities is associated with lower growth in a state, other things being equal," the article reads.
The study examined factors affecting economic growth from 1960-2005 from all 50 states, including variables such as personal income, population growth rate, percentage of the population with a bachelor's degree or higher and per capita appropriations to higher education. In the end, the study was able to reject the hypothesis that increased spending in higher education promotes economic growth.
While the groups do not dispute colleges can help the economy grow if they educate students well in degrees useful in the marketplace, there is increasing evidence this is not taking place, Denhart said. About 30 percent of college graduates have no new cognitive skills when they graduate, he said. Like any other business, higher education follows a model of diminishing returns. At some level of government funding, which Denhart argues Michigan began providing sometime in the past, universities reach a maximum rate of return. After that peak point, the marginal rate of return decreases and if the government continues to increase funding, the taxpayers are paying more for the universities and receiving less back, he said. Denhart also said inefficiency is one of the chief culprits of this diminishing return, explaining that from 1993-2007, university administration costs rose by 63 percent.
"Close to 3 percent of the GDP now (is) spent on higher education, which is more than several midsize nations," Denhart said. "What's the additional benefit of spending one more dollar, especially when you think about the opportunity cost?"
Despite Denhart's views of the economic problem of higher education funding, he acknowledged his position is not a popular one. He said no one at the Center for College Affordability and Productivity actively lobbies for cutting spending. However, he said he does see rising support as people grow frustrated about rising tuition costs and the way their tax dollars are spent, even as gathering research demonstrates the inefficacy of a college education. Rather than active lobbying, Denhart said the group spends most of its advocacy efforts on talking to members of the media and writing opinion pieces so as to inject their research and views into the public forum.
One indirect opponent the higher education lobby has to fight is the Department of Corrections, which receives a large part of the general fund and general purpose budget. Burnham said while higher education has no issue with corrections, the state's priorities are out of order. He said the corrections budget slice now is larger than that of higher education and community colleges combined, and a lot of the problem stems from lawmakers who dread appearing "soft on crime."
"On an autopilot basis, they're putting more and more money into the corrections budget," Burnham said. "You have members who are afraid of, you know, letting loose lots of criminals."
In Michigan, corrections makes up 30 percent of public employees, according to the Citizens Research Council of Michigan. Costs of incarceration run about $30,000 per prisoner per year, and to add to the burden, Michigan's incarceration rate is nearly 50 percent higher than its Great Lakes neighbors', the Council found. Additionally, from fiscal year 1999-2000 to fiscal year 2009-10, appropriations in the Department of Corrections increased by $441.7 million, or about 29 percent, according to the Senate Fiscal Agency.
Patricia Farrell, the director of university outreach and policy research for the Presidents Council, agreed that corrections becomes an opponent simply on the basis of competition for dollars. However, while representatives of the Presidents Council might attend some legislative hearings about corrections or discuss funding priorities with lawmakers, they never talk directly with anyone in the corrections lobby. Still, Farrell said, higher education frequently gets pushed aside in favor of corrections, and this year's budget proposals are no exception.
"The governor keeps saying shared sacrifice, and we're saying if it's shared sacrifice, why isn't corrections being cut too?" Farrell said. "It's kinda hard to understand."
However, even more than corrections, a new opponent and a new conflict are brewing. Snyder suggested in his budget proposal pulling part of higher education's funding from the School Aid Fund, a portion of the budget ordinarily retained for K-12 education. Snyder and the House both suggest using $700 million out of the fund toward higher education, and the Senate hopes to lessen that amount to $200 million. Farrell said K-12 education never has been a competitor with higher education because the groups got their money from separate budget locations and shared similar goals and missions.
"We need to work together, especially to change Michigan's economy for the future," Farrell said. "So we're staying very quiet about how our funding is possibly occurring this year, because we do not want to be in competition with (K-12 education). Gov. Snyder has put us in a difficult place there."
Although like with any issue, sometimes there are current issues caught in a bitter partisan battle, higher education appropriations lobbying is unique in a few ways. First, nearly all lobbying dollars spent are in favor of increased funding to higher education, making it an issue in which proponents faces off with proponents of other issues looking for funding, rather than with direct ideological opposition. University lobbyists spend a lot of time talking to lawmakers and their staff. Successful advocating requires developing a relationship with lawmakers, Burnham said, something that is made remarkably more difficult by Michigan's restrictive term limits.
However, political science research shows interest groups hold the most power in states with term limits, which might demonstrate Burnham's lobbying style just requires more personal relationships than he feels constant turnover allows, and is not a true trend supported by data.
In general, advocates agree, successful lobbying for higher education requires generating research and hard data. Burnham said before he can persuade any lawmaker that MSU deserves more funding, he first has to educate them as to MSU's mission and purpose.
"The biggest challenge in dealing with folks that are new is they come in with perceptions of institution which may be 25 years old, from when they were looking to go to college, or they may be based solely on their experience with the agriculture programs," Burnham said.
To dispel these perceptions, Burnham spends a lot of effort informing lawmakers about MSU's many programs, including top-ranked graduate degrees in education and nuclear physics.
Farrell also said using data is an effective lobbying method, especially with a mostly freshman legislature such as this year's. Part of her job is generating research, particularly about higher education funding in other states, to present to lawmakers and staff in an effort to receive greater appropriations, she said.
Each year, one lobbying effort brings presidents or other representatives from all 15 public universities to present their case for increased funding in front of the members of the legislature. Their written testimonies provide physical evidence about exactly how the universities attempt to brand themselves and what themes they focus on to campaign for more funds. All of the universities spoke in March this year in front of the House higher education appropriations subcommittee, but written testimonies only were available from Central Michigan University, Eastern Michigan University, Ferris State University, Grand Valley State University, Michigan State University, Oakland University, the University of Michigan-Dearborn and Wayne State University. Each of the testimonies varied greatly in length, but generally fell in the range of five to fifteen standard typed pages, and an analysis of the words and phrases used offers some interesting conclusions.
With the exception of Ferris and Grand Valley, all of the universities mentioned research at least once in their testimonies. Wayne State, however, mentioned research six times while MSU mentioned it 16 times. This difference in branding is unsurprising; Wayne State and MSU make up two of the three prongs of the University Research Corridor, the state's leading research institutions.
Additionally, most schools discussed the economy extensively, typically in the context of the higher education's contribution toward an economic recovery. Apart from Grand Valley and Oakland, all of the universities mentioned the poor state of the current economy at least once so as to contrast it to what they could offer. From there, the schools took different tacks. Wayne State brought up economic recovery seven times, while UM-Dearborn talked about its ability to aid the transition to a new economy with new industries four times. Most schools also discussed Snyder's public relations campaign for "shared sacrifice," emphasizing they understood the need for everyone to suffer some cuts. However, the universities then followed this statement of common ground with one pleading for the cuts to be gentle, and for the legislature to understand the importance of higher education and the difficult positions of university administrators in creating a trimmed budget that still is fair to students.
Apart from these common themes, each school took a slightly different approach to lobbying. UM-Dearborn alluded to the governor's call for greater accountability at universities and more mileage for the dollars received, mentioning either efficiency or accountability seven times. Most schools mentioned their financial aid offerings, but Eastern mentioned its record of affordability six times, and Ferris also pushed this angle, discussing affordability three times. Only two schools mentioned innovation in business, technology and science - another of the recently popular catchphrases. MSU and UM-Dearborn both brought up the word six times during their presentations.
Oakland, in contrast to other schools' strategies, barely discussed any buzzwords. Instead, the university's administrators focused on a statistical analysis of the school's worth and budget breakdown, and offered a brief presentation about its new medical school.
Higher education funding is a distinctive lobbying group to examine, because despite its one-sided support, the group continues to lose funding nearly every year in a no-win structural budget issue. Fiscal year 2010-11 seems destined to prove no exception, but it might still provide hope for the future of university funding, Burnham said.
"I think this administration does understand the need to increase graduation outputs ... to attract business, but they also are dealing with a budget structural deficit," Burnham said. "Basically what (MSU) President (Lou Anna K.) Simon has said to the governor is ‘We'll be a part of shared sacrifice, but the deal is this is the end of a death by a thousand cuts.' We really have to get to a point that's a baseline we can grow from."
Burnham, Mark. MSU vice president for governmental affairs. Personal interview. 1 April 2011.
Farrell, Patricia. Director of university outreach and policy research, Presidents Council, State Universities of Michigan. Phone interview. 25 March 2011.
Denhart, Matthew. Administrative director and research associate. Center for College Affordability and Productivity. Phone interview. March/April 2011.
Citizens Research Council of Michigan. "Michigan's On-Going Budget Problems and its Fiscal Future." As presented to Michigan EPFP. 2 Feb. 2009.
Jenn, Kyle I. "Background Briefing: Higher Education." House Fiscal Agency. January 2011.
Olson, Gary S. and Sara E. Wycoff. "Michigan's Budget and Total State Spending: A 10-Year History (FY 1999-2000 - FY 2009-10)." Senate Fiscal Agency. October 2010.
Vedder, Dr. Richard and Matthew Denhart. "Michigan Higher Education: Facts and Fiction." Policy Brief. Mackinac Center for Public Policy. 20 June 2007.