FY 2014-15 HIGHER EDUCATION BUDGET S.B. 768 (S-1): SENATE-PASSED
Senate Bill 768 (S-1 as passed by the Senate)
Committee: Appropriations
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$1,430,573,500 |
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1. University Operations Increase. Governor's recommendation includes a $76.9 million (6.1%) increase for university operations. The funding is distributed through the same performance metrics as FY 2013-14 with certain modifications. The changes include distributing half the increase proportionally to universities based on FY 2010-11 appropriations, and adding Pell grants to the metrics that are based on Carnegie classifications. Senate concurred with Governor. See Table 1 for distributions. |
76,892,000 |
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2. Prohibited Instruction Activity. Senate reduced funding for MSU based on Section 271A which states intent that a public university shall not participate in any instructional activity that encourages or discourages union organizing of employees and provides for a $500,000 penalty for each occurrence. (Sec. 271A) |
(500,000) |
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3. MSU AgBioResearch. AgBioResearch performs agricultural research to promote efficient production, marketing, distribution, and use of farm products. Governor and Senate increased funding by 6.1%, from $30,243,900 to $32,088,800. |
1,844,900 |
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4. MSU Extension. MSU Extension Services identifies and solves farm, home, and community problems. Governor and Senate increased funding by 6.1%, from $26,044,800 to $27,633,500. |
1,588,700 |
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5. Tuition Incentive Program (TIP). Governor increased this program by $1.5 million GF/GP (3.2%), from $47.0 million to $48.5 million. The program provides an incentive to students to complete high school and go on to college by pledging to pay tuition and fees for associate degree or certificate programs, as well as up to a maximum amount of $2,000 for junior and senior years combined at a four-year institution. Students in grades 6 through 12 who are Medicaid-eligible for 24 months within a 36-consecutive month period can qualify for TIP. Senate concurred with Governor. |
1,500,000 |
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6. North American Indian Tuition Waiver. Public Act 174 of 1976 provides for free tuition for Michigan resident North American Indians who attend Michigan public community colleges, universities, and certain Federal tribally controlled community colleges. State appropriations have not kept pace with actual costs. In FY 2013-14, universities absorbed $4.7 million of waiver costs. Senate added $500,000 to partially offset the shortfall. |
500,000 |
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7. Higher Education Database Modernization and Conversion. This funding provides support for the maintenance of the Higher Education Institutional Data Inventory (HEIDI). HEIDI is the State's database for enrollment, expenditure, and degree information for Michigan's 15 public universities. Governor and Senate increased funding from $105,000 to $200,000 to cover current information technology support staff needs. |
95,000 |
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8. MPSERS Reform. Senate included $15,000,000 appropriated from the State School Aid Fund to provide funding assistance to universities that have employees that are members of the Michigan Public School Employees Retirement System (Central, Eastern, Ferris, Lake Superior, Michigan Tech, Northern, and Western). While the bill does not delineate the specifics of MPSERS reform, if the Legislature enacts a cap on unfunded accrued liabilities for universities similar to K-12 and Community Colleges, the cost to the State would be approximately $800.0 million over a 22-year period. |
15,000,000 |
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9. Comparison to Governor's Recommendation. Senate is $15,000,000 Gross and $0 GF/GP over the Governor. |
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$96,920,600 |
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FY 2014-15 Senate-Passed Gross Appropriation................................................................. |
$1,527,494,100 |
FY 2014-15 HIGHER EDUCATION BUDGET BOILERPLATE HIGHLIGHTS
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Changes from FY 2013-14 Year-to-Date: |
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1. Posting of Expenditures. Governor eliminated the provision stating that the State Budget Director shall determine whether a university has complied with this section and also eliminated the Budget Director's authority to withhold a public university's monthly installments for noncompliance. Senate retained current year requirements with minor wording changes and added subsection (6) that requires a new report on opportunities for earning college credit at each university through various programs (e.g., concurrent enrollment, dual enrollment, early/middle college, etc.). (Sec. 245) |
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2. State Tuition Grant Program. Governor changed the application deadline from July 1 to March 1, eliminated carry-forward authorization, and required independent colleges and universities to submit annual P-20 longitudinal data system sets and annual reports on the number of tuition grant students that successfully complete a program or graduate, the number of tuition grant students taking remedial classes, and Pell grant students that successfully complete a program or graduate. Senate did not include Governor's changes. (Sec. 252) |
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3. Tuition Incentive Program. Sets criteria and financial thresholds for the Tuition Incentive Program (TIP). Governor and Senate specified that the application for certification must be before August 31, and requires compliance with satisfactory academic progress policy, which is consistent with current practice. (Sec. 256) |
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4. Tuition Restraint. Governor sets the maximum tuition and fee increase for FY 2014-15 at 3.2% and eliminates cost of mandated health insurance from calculation. Senate concurred with the 3.2% tuition restraint but maintained current year requirements regarding the calculation for compliance. (Sec. 265) |
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5. Performance Funding Criteria. Governor revised the formula by distributing 50% of the funding increase proportional to each university's share of State funding in FY 2010-11, added the number of students receiving Pell grants to Carnegie classification metrics, and eliminated intent language that would change the score for improving universities from 2 to 1. Senate concurred with Gov's recommended formula for FY 2014-15, but maintained intent language that would change the score for improving from 2 to 1 in the next fiscal year. (Sec. 265a) |
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6. Transfer Credits. Requires report on the number of transfer credits rejected for incoming students. Governor and Senate limited report to credits earned by resident students at Michigan postsecondary institutions. (Sec. 272a) |
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7. King-Chavez-Parks-Hood Unexpended Grant Funds. Governor modified this section to provide that funds remaining after reallocation of unexpended funds up to $100,000 may be used by the Workforce Development Agency for administration of the programs. Senate did not concur with Governor. (Sec. 282) |
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8. Prohibited Instruction Activity. Senate added new language stating that it is the intent of the Legislature that a public university that receives funds under section 236 shall not participate in any instructional activity that encourages or discourages union organizing of employees including, but not limited to participating with any business or union, or group of businesses or unions, in hosting, sponsoring, administering, or in any way facilitating an academy, seminar, class, course, conference, or program that provides instruction, in whole or in part, in techniques for encouraging or discouraging employees in regard to union organizing. The appropriation in section 236 for any university that participates in an activity described in this section shall be reduced by $500,000 for each occurrence. (Sec. 271A) |
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9. Health Insurance Report. Senate added language requiring each public university to submit a report on the number of students who had health insurance and the number of students who did not have health insurance in the previous fiscal year. The report shall also include how much each university spent on health services for uninsured students. (Sec. 271B) |
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10. Restored Sections. Senate restored the following sections that were removed by Governor: Purchase of foreign automobiles prohibition (Sec. 239a); provision stating the acceptance and use of Federal or private funds does not place an obligation upon the Legislature to continue the purposes for which the funds are made available (portion of Sec. 242); intent regarding protection/preservation of U of M Douglas Lake Biological Station (Sec. 261); intent that universities develop policies to minimize the cost of textbooks and course materials (Sec 262a); legislative intent stating that funds be allocated from the General Fund for North American Indian tuition waiver costs – modified based on additional funding included by Senate (Sec. 268); counseling degree programs/student's religious beliefs (Sec. 273); human embryonic stem cell research report (Sec. 274); intent regarding adult co-resident health benefits (Sec. 274a); Yellow Ribbon GI Education Enhancement Program reporting requirements (portion of Sec. 275); prohibits use of funds for the construction or maintenance of a self-liquidating project, requires compliance with Section 238 of 1984 PA 431 and JCOS use and finance requirements, and includes penalty provisions (Sec. 275a); and Federal Educational Rights & Privacy Act compliance (Sec. 293). |
Date Completed: 5-6-14 Fiscal Analyst: Bill Bowerman
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.