Gov. Jennifer Granholm announced Wednesday CMU and other state universities will face a 5 percent recall of money already in this year’s budget.
The mid-year cut, and fourth since December 2002, would give Central a $4 million shortfall in its current budget.
Universities could see a lesser cut of 2 percent if they agree to not raise tuition next semester and restrain tuition increases to the rate of inflation for the Fall 2004 semester.
If state universities abide by the tuition constraints, they will see the remaining 3 percent returned on September 30, 2004 — the last day of the states 2003-2004 fiscal year.
The Senate Appropriations committee approved the executive order Wednesday, which includes a 6-month delay in the state income tax reduction. The Senate voted 24-12 in favor of the delaying the tax cut until July 1.
The Republican-led House Appropriations committee has not signed off on the measure yet. The entire House of Representatives is also required to approve the tax cut delay.
Rep. Sandy Caul, R-Mount Pleasant and member of the House Appropriations committee, said Wednesday night it is still unclear when the committee and House will vote. “There are a number of us that still have concerns,” Caul said.
Caul said her biggest concern is the income tax delay — a measure she says may be harmful to the rebuilding of Michigan’s economy.
“The executive order says we’re going to repeal the income tax and not give the taxpayers their dollars,” she said.
Caul, chair of the House Subcommittee on Higher Education, said she was also concerned with the higher education cut as well.
She questions how the tuition requirements can be guaranteed to the universities.
“This is just a proposal,” she said, “there is absolutely no guarantee that what is being proposed will actually happen.”
Universities are worried that they may fall victim to the state’s budget ax when the Governor proposes her 2004-2005 fiscal year budget early next year, said Mike Silverthorn, public relations executive director of news services.
Silverthorn said university officials are waiting until both houses of the Legislature approved the governors executive order before taking action on CMU’s budget.
“We’re just going to wait and see how it all shakes out in Lansing,” Silverthorn said. Caul said there is no bill or law that would protect universities in case of another mid-year reduction between now and Sept. 30, the end of the state’s fiscal year.
“Everytime we start to have that conversation with the executive branch the only answer is cut the fat out of universities and put a cap on tuition,” she said.
Another of Caul’s concerns is the tuition increases are based on the Detroit Consumer Price Index, a guide she says isn’t in touch with the rising cost of education.
“Detroit CPI is really in no way knowledgeable in calculating educating cost,” Caul said.
The Detroit CPI is running in the 1.8 to 2 percent range, she said.
If approved, the cut will mark a 15 percent reduction in state appropriations for the states 15 universities in a year.
Among other budget decisions affecting college students includes a delay in the payments for next fall’s Merit Scholarship recipients.
Instead of seeing the scholarship money before the beginning of the 2004 fall semester, awards will not be made until Oct. 1, when the state’s 2004-2005 fiscal year begins.
The whirlwind of reductions began Dec. 6, 2002, when former Gov. John Engler was faced with a $337.4 million deficit before leaving office and cut higher education 2.5 percent.
Upon taking office, Gov. Jennifer Granholm was faced with an increasing deficit that forced her to issue a 1.5 percent executive order cut for higher education on Feb. 19.
In July, the governor and Legislature finally agreed to a middle of the ground budget cut for higher education for the 2003-2004 fiscal year, which began Oct. 1.
The state, faced with a $1.2 billion deficit at the time, reduced CMU’s appropriations by 6.1 percent.
On Oct. 14, state budget officials announced another deficit totaling $920 million in the two week old 03-04’ budget.
“I just get very frustrated because higher ed has been on the table so many times,” Caul said.
Sen. Alan Cropsey, R-Dewitt, who voted against the income tax cut, said the states budget woes are far from over.
“We hope there won’t be more cuts but there’s no guarantee on anything here,” Cropsey said.