State funding for the three University of Michigan campuses will remain stable under a 2020-21 fiscal year budget that Gov. Gretchen Whitmer signed Sept. 30.
The spending plan put to rest months of concerns over how a loss in state revenue due to the coronavirus pandemic might hurt higher education appropriations.
“Considering the still-challenging economic circumstances that our state is facing right now, a budget with no funding reduction is welcome news,” said Cynthia Wilbanks, vice president for government relations.
“This plan reflects the understanding by the Legislature and governor that the continued success of our state’s universities will be essential to Michigan’s economic stability as we navigate the pandemic. We appreciate this support.”
Wilbanks added that while this budget holds higher education funding stable, the continuing COVID-19 crisis creates uncertainty about the state’s long-term economic situation and the challenges to future budget years.
All state universities, including U-M’s Ann Arbor campus, experienced an 11 percent reduction in what the state initially appropriated in its 2019-20 fiscal year, which ended Sept. 30. The decrease occurred late in the year and created a gap in revenue needed to cover university operating costs.
To mitigate the reduction, the state provided funding for COVID-related expenditures in the same amount through the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. The federal funding included restrictions on how the money could be spent.
The spending plan for the fiscal year that begins Oct. 1 allocates $322.9 million for U-M’s Ann Arbor campus. UM-Dearborn will receive $26.3 million, and UM-Flint will receive $24 million.
The full appropriations are contingent on in-state undergraduate tuition increases of no more than 4.25 percent or $586, whichever is greater. Unlike in previous budgets, the penalties for raising tuition any higher this year include the state withholding any new operations funding or capital outlay funding for the next three fiscal years.
The Board of Regents approved a university budget for Ann Arbor in June that included a 1.9 percent tuition increase and projected a flat state appropriation. The board also approved a 1.9 percent increase for UM-Dearborn and a 3.9 percent increase for UM-Flint.
The state budget includes maintaining the same funding for the third straight year for both the Michigan Competitive Scholarship, a grant awarded statewide to students with a qualifying SAT score and demonstrated financial aid, and the Tuition Incentive Program, a state financial aid program targeted toward low-income students.
Also included in the spending plan are a number of new reporting requirements for universities, including a report on planning and assessment for how best to provide for free speech while protecting students from hate speech and discrimination.
Another new requirement is a report on enrollment, student credit hours, population, student success, online course fees, other fees, pandemic responses and decision timelines during the COVID pandemic.
