The University of Michigan provides the state with a strong return on investment and could further strengthen its academic programs and student financial aid support with an increase in base funding for the state’s public universities.

That was the message President Mark Schlissel delivered March 18 to state lawmakers in the House Appropriations Subcommittee on Higher Education and Community Colleges. The annual testimony, delivered virtually this year, comes as legislators begin the months-long process of hammering out a state budget before the start of the new fiscal year on Oct. 1.

Schlissel stressed that the COVID-19 pandemic has demonstrated why state support of “its oldest public research university” is critical.

“As fellow Michiganders, we can all be proud that when our world needs knowledge, care and understanding most, U-M rises to the challenge,” he said. “As we have for more than 200 years, we are serving the public through education, research and service – and we very much appreciate the partnership of the people of Michigan in making that happen.”

Despite the challenges of the pandemic, U-M students have continued to make progress toward their degrees, the university’s research labs are operating at nearly full capacity and its health system has administered tens of thousands of COVID-19 vaccines, Schlissel said. Early last year, Michigan Medicine stood up a special unit to accept COVID-19 patients from all around Southeast Michigan.

In his testimony, the president highlighted a number of ways the university has furthered its mission while working toward some of society’s most pressing challenges, including:

  • U-M researchers logged $1.62 billion in research volume during the past fiscal year, leading to advancements in areas ranging from COVID-19 treatment to driverless vehicle technology, and social justice.
  • The university continued to honor its commitment to college affordability through the Go Blue Guarantee, providing free tuition for in-state students from families who make less than $65,000 per year.
  • U-M research resulted in 31 startup companies that were launched based on the university’s technology this past year along with hundreds of patents.

But delivering on the university’s mission during the pandemic has come at a cost, said Schlissel, adding that the net financial impact of COVID-19 to the Ann Arbor campus is projected to be $174 million through the end of the current fiscal year.

U-M officials expect ongoing efforts to protect the health and safety of the community will continue to generate costs of $1 million per week, he said.

Last month, Gov. Gretchen Whitmer released budget recommendations that include a 2 percent one-time increase in state funding for each of the state’s 15 public universities in fiscal year 2021-22. An accompanying proposal also would provide $57.3 million in one-time funds for the current fiscal year to universities that have adopted certain pandemic-related policies.

Since 2001, U-M has become increasingly reliant on tuition, research grants, fundraising and other sources of revenue to offset the declining share of revenue from state appropriations. In 1970, state funding accounted for 64 percent of the Ann Arbor campus general fund, while this year it covered only 14 percent.

About 85 percent of public universities in the Association of American Universities receive more state support per student than U-M.

Schlissel said that while U-M is grateful for the proposed funding for COVID and an increased appropriation next fiscal year, the university “would most welcome increases to base funding” for itself and the other public universities.

“One-time funding commitments don’t allow us to make long- term investments in educational excellence for the people of Michigan,” he said. “U-M is poised to make investments in the future of this state by further strengthening our academic programs and increasing financial aid, and stable state budget increases will allow us to plan, while responding to the needs of our workforce and economy.”

Schlissel also encouraged lawmakers to put more dollars toward student need-based financial aid, which he said would lead to “greater degree attainment, diminished student debt, growth in the Michigan economy and increased per-capita income.”

“If we want our state to be among the most prosperous in the nation, our people have to be among the most educated,” Schlissel said.

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