Further reduction in state aid still expected despite no executive cuts ordered

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Central Michigan University’s budget will avoid a potential executive order cut from Gov. Rick Snyder to balance the state’s budget.

Any governor, according to previous reports, has the authority to issue executive order cuts based on budget figures to indicate payments to institutions will be held up, taken away or even cut because of the state’s finances.

David Burdette, vice president of Finance and Administrative Services, said he doesn’t see an executive order cut coming this fiscal year because of sufficient revenue estimates by the state.

“The current revenue estimates look like this year’s budget is approximately balanced,” Burdette said. “We’re not anticipating an executive order (cut).”

In the next fiscal year, beginning July 1, CMU will see a cut in its state funding as the state works to compensate for a $1.8-billion budget shortfall.

Kathy Wilbur, vice president of Development and External Relations, previously told CM Life it is “very clear” higher education funding will receive a cut when Snyder proposes his budget next month.

Sara Wurfel, press secretary for the governor, said in an e-mailed statement the budget is still in review and development.

“The Governor is looking to be as thoughtful and deliberative as possible, especially given the dire fiscal crisis and estimated deficit,” Wurfel said. “It’s not just about cutting either, he’s hoping to invest in items that achieve key outcomes and can lay the foundation for the reinvention of Michigan.”

With diminishing state-aid funds, Burdette said the university is becoming more dependent on tuition revenues. In the 2009-10 fiscal year, tuition accounted for 54 percent of revenue, other revenues for 26 percent and state appropriations accounted for 20 percent of the budget.

CMU received $80,132,000 in state funding for the current fiscal year, a 2-percent cut in the previous year’s state funding. This fiscal year, with CMU’s current $417,903,423 budget, state aid equals 19 percent of the total revenue, according to figures from Burdette.

“We depend on tuition for supporting the campus,” Burdette said. “CMU will not only survive, but be a strong institution (when further cuts are made in state aid).”

Burdette said he did not know where CMU would trim its budget to account for state aid cuts next fiscal year.

He said he sees a parallel with diminishing state aid and higher tuition rates in CMU’s budget with the decline of the auto industry and rising unemployment in the state.

“The state was paying a lot more toward higher education than it currently is,” Burdette said. “Michigan is similar to other states in that they have pulled back state funding and campuses have been raising tuition as a consequence of those reductions.”

In the past 10 years, tuition has increased about 220 percent from a rate of $108.15 in the 2000-01 academic year to $346 this year, according to the Office of Institutional Research.

The university remains competitive with the increases, Burdette said.

“We had record enrollment (this year),” he said. “We became a strong-demand campus and we’re very pleased about that. We have absorbed the work load this year.”