President Obama announced a plan to force public universities to either “contain tuition or face losing federal dollars,” which left university heads questioning the president’s understanding of university financing.

According to an April 2011 release from the State Higher Education Executive Officers, Michigan is already in the bottom 10 of all states for higher education support. The national average for per-student taxpayer support is $6,451, while Michigan’s average is only $4,822 per student.

Outside Tuesday’s Academic Senate meeting, Ross said he does not see it affecting CMU students.

“For us at CMU, with our philosophy, I don’t think it would hurt our students or the university at all,” he said. “We award based on merit, and I feel comfortable with where we are as a university.”

Political science faculty member Lawrence Sych said President Obama’s plan isn’t unlike attempts of the state in the past.

“This sounds a lot like what states have tried to do in the past with mixed success,” he said. “Over the past several years, Michigan has been trimming back state support for universities, and now with some surpluses at the state level, they’re reconsidering that. It’s the lack of state support that motivates universities to increase tuition.”

President Obama’s plan aims to provide educational opportunities for all students, but Sych said it seems to have potential to harm students.

“It seems like it would be difficult to not hurt the students. If you cut federal support going to public universities, those would be hurting the very students that you’re seeking to help,” Sych said. “One of the major motives for increasing tuition is the lack of state support. If we don’t raise tuition, we’re losing that revenue. At the same time, the federal government says if you raise tuition, we’ll cut federal support. It’s really a lose-lose situation.”

Ross said CMU has been working toward cost efficiency since the beginning of the decade, introducing the CMU Promise, a price-fixed tuition plan, in the fall of 2005. The promise was eliminated in the summer of 2008.

“We’ve cut costs in basic things such as utilities to help keep tuition low,” Ross said. “What sets CMU apart is that we started this in 2002, not just when the economy started to suffer. It’s remained consistent.”

Sych said he doesn’t think Obama’s plan will be put in use anytime soon.

“Obama is close to the end of his term, so I doubt this plan would happen this soon,” he said. “It may just be a nice thing to say to gain some political support going into the next election.”

Obama told the crowd of more than 3,000 he is proposing changes to federal aid programs to combat rising tuition rates across the country.

“If (colleges) can’t stop tuition from going up, then the funding (they) get from taxpayers each year will go down. We should push colleges to do better,” Obama said. “We should hold them accountable if they don’t.”

Under Obama’s plan, federal aid would be cut for colleges and universities that continue to raise tuition.

Last year, Michigan universities increased their tuition rates by an average of 7.1 percent, in large part because of a 15-percent cut in state aid. Central Michigan University increased its tuition rate by 3.45 percent. Obama denounced cuts to state-level aid to colleges and universities throughout the country.

“We’re telling the states if you can bring down the cost of college and find ways for more students to graduate … we will give you additional federal support,” Obama said.

He announced the beginning of a “Race to the Top program for college affordability.” States that invest in higher education will receive more federal support for education, Obama said.

The president called on Congress to extend the recent tuition tax credit, which is set to expire in July.

CMU Political Science Professor James Hill said in an email the importance of a higher education should trump any fears about the cost of such proposals.

“While I am always mindful of the cost of new government initiatives, if there is a promising investment to be made with positive long-term potential, it is in education,” Hill said.

Obama also spoke on the development of green energy and the environment.

“Right now, America is producing more of our own oil than we were eight years ago,” Obama said. “That’s good news. But … no matter how much oil we produce, we’ve only got 2 percent of the world’s oil reserves. And that means we’ve got to focus on clean, renewable energy.”

Obama said the development of green energy is good for the environment and will create jobs across the country.

He also urged Congress to extend the payroll tax cut set to expire at the end of February, and then reiterated his desire to raise taxes for the wealthy to reduce the deficit and pay for government programs.

“When it comes to paying our fair share, I believe we should follow the Warren Buffet rule,” Obama said. “If you make more than $1 million a year, then you should pay a tax rate of at least 30 percent. On other hand, if you make less than $250,000, your taxes shouldn’t go up.”

Michigan Senators Carl Levin and Debbie Stabenow were in attendance, as well as Secretary of Education Arne Duncan and U-M quarterback Denard Robinson.

In the speech Tuesday night, Obama defended his response to the economic and financial crises facing the country.

“The state of our union is getting stronger, and we’ve come too far to turn back now,” Obama said.

Obama started the address by honoring American troops returning from the Iraq War and the military successes in Afghanistan and Libya. He called on Congress to follow their examples and work together for the good of the American people.

He quickly turned his attention to the economy, arguing for “smart” regulations and a reformed tax code, where millionaires pay no less than a 30 percent income tax.

“We can restore an economy where everyone gets a fair shot, everyone does their fair share and everyone plays by the same set of rules,” Obama said.

The president spent a portion of his speech addressing education, saying public universities will be hit with cuts in federal funding if they continue to increase tuition. He also urged all states to invest in education at all levels and called on lawmakers to make “higher education a higher priority.”

Obama used the speech to tout his successes with energy independence and the bailouts of the auto industry and defended programs such as the Affordable Care Act and the Dodd-Frank financial reform bill.

“I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place,” Obama said.

In the Republican response to the president’s address, Indiana Gov. Mitch Daniels proposed a simpler tax code and went after the president’s economic record.

Daniels said it’s not fair and it’s not true for the president to attack Republicans in Congress as obstacles.

“No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others,” Daniels said.

The bill, put forward by Senate Democrats, is called Michigan 2020. The plan would give a $9,575 yearly grant toward higher education costs to students who attended school, public, private or are home-schooled, within the state for their entire educational careers. Those students who attended school out-of-state for a period of time would be eligible for a percentage of that amount proportional to the number of years they were educated in-state.

The median tuition level for Michigan’s public universities is $9,575. According to Central Michigan University’s website, in-state tuition costs $9,688 per year for CMU undergraduate students.

“Many, if not most, of the businesses coming to Michigan now need a very well-educated workforce,” said CMU Griffin Endowed Chair Maxine Berman. “If they can’t find those people here, they will bring them in from other states. Wouldn’t it be better if there were more Michigan college grads so that our own residents could get these jobs?”

The proposal would be paid for by cutting $3.5 billion in corporate tax credits and loopholes. The state currently pays out about $34 billion in tax credits annually. Senate Democrats estimate the program would cost $1.7 billion and argue the tax loopholes to be cut are products of special-interest groups and lobbyists.

Berman said the tax credits should not be confused with the $1.8 billion business tax cut signed into law last year. She said an educated workforce, in addition to lower tax rates, will make Michigan a very attractive place for business.

“If you believe in the job creator ideology, you would say any new taxes would hurt Michigan business,” said Political Science Professor James Hill, referring to the belief that higher tax rates stifle job creation. “If you are skeptical of this argument, you might argue that a better-educated workforce would be a net positive for prospective businesses and, in the long run, would be a plus for prospective businesses.”

The proposal comes a year after public universities were hit with a 15-percent cut in funding and a decade in which funding has been cut by 65 percent.

Hill said the proposal is unlikely to pass the Republican-controlled Senate anytime soon but applauds the bill’s goals.

“It is good to focus on education as a primary route to stimulating our state economy,” he said.

Gov. Rick Snyder

Michigan Gov. Rick Snyder promised no further cuts to education in this year’s budget after his second State of the State address Wednesday night.

Snyder has come under fire for signing funding cuts for the state’s public universities and reducing aid for K-12 schools over the past year.

“Our intention is, from where we were last year, is hopefully invest more in education,” Snyder said in an interview with the Detroit Free Press. He added that he while he wants to invest more into education, he does “not (want to) just spend more.”

Kathy Wilbur, vice president for development and external relations for Central Michigan University, said this is welcome news following years of funding cuts for public universities.

“Obviously, we’re thrilled. We’re very pleased by what the governor promised,” Wilbur said. “We’ve had to take some very significant cuts to the universities in the past.”

Vice President for Development and External Relations Kathy Wilbur

Funding for universities was cut 15 percent last year and has been slashed by 65 percent over the past decade. Wilbur said only 16 percent of CMU’s funds come from the state. In the past, up to 65 percent of the university’s funds came from the state.

“Unfortunately, most schools look at tuition increases to offset cuts to funding,” Wilbur said.

Tuition was increased by $12 per credit hour, or 3.47 percent, this academic year for CMU students, and other universities around the state increased their tuition rates by up to seven percent.

One Rockford senior is turning his interest in entertainment into money by using YouTube.

He has created the alias “Peterbutterman,” which is also the name of his YouTube channel, to make comical videos inspired by comedians like Ed Bassmaster.

“I do stuff like this anyways, so might as well do it for some money,” Peterbutterman said.

Macomb Senior Andrea de la Garza smudges eyeshadow on CMU student Peter Butterman's eyelids as he transforms into YouTube character Julia Butterman Wednesday evening at his Mount Pleasant apartment. (Perry Fish/Staff Photographer)

By performing stunts such as “coning” (grabbing a drive-through ice cream cone by the ice cream, and other related frozen dairy pranks) or running though a grocery store covered in peanut butter, Peterbutterman hopes he will become a YouTube hit and pay off students loans by the end of the academic year.

“My biggest hit has been ‘Ugly Face Contest,’ but it’s a growing process,” Peterbutterman said. “Everybody waits for that one big hit that just takes off, and I’m not going to stop (making videos).”

Like Peterbutterman, many students are concerned about being able to pay off loans in a reasonable amount of time.

Amy, a sophomore, deposits the money she earns as an exotic dancer into a savings account she plans to use after graduation.

While Amy knows her employment choices are often frowned upon, she said it is only temporary and provides just what she needs for school.

“I know it’s unorthodox, but I’ve been a competitive dancer all my life and it’s just a way to be on stage,” Amy said. “I don’t think about the audience, just about the goal.”

Amy said the place is well-managed and her employer helps her determine exactly how much she needs to work to meet her budget.

A more popular way of students making money is to donate plasma at BioLife, 4279 E. Blue Grass Road.

Donors are able to go a maximum of twice a week, which can add up to $60. The process is set up by appointment and takes an average of 45 minutes.

Clio sophomore Rob Muter said he does not use the money for student loans, but puts it toward groceries and necessities that are otherwise overshadowed by his tuition bills.

“I chose BioLife not only because it is a great way to earn money, but because it is also a good cause and helps create medicines for people that need them,” Muter said.

A mass email from Student Account Services and University Billing listed the dates and said a $100 non-payment-of-tuition fee will be assessed to students who do not pay in time.

It also advised students to update their refund options to avoid delay in receiving any funds remaining on accounts after payments are made. The first electronic refund payment date for the fall semester is Aug. 22, the first day of class.

During the board of trustees meeting last Thursday, university officials, specifically President George Ross and Vice President of Finance and Administrative Services David Burdette, touted the $429 million budget approved last week as a balanced triumph of solid fiscal sense.

In many ways it was, managing to freeze the wages for several employee groups for the second year in a row, including several unions, as well as incorporating several other cuts to weather reduced state funding.
At the same time, however, CMU is creating new, likely $200,000 a year or greater positions for the College of Medicine.
The university has hired two deans, one replacing Dr. Nehad El-Sawi as associate dean of medical education and another, temporary position created specifically for Dr. Joel Lanphear.
Lanphear interviewed along with Dr. Linda Perkowski for El-Sawi’s previous job. Perkowski got the job, her husband, W. Robert Flieschmann, got a faculty position and Lanphear had a position created on his behalf.
College of Medicine Dean Dr. Ernest Yoder said Lanphear will guide the college through Liaison Committee on Medical Education accreditation, something critical for CMED’s success.
CMU’s fiscal conservatism applies to its workers, but when it comes to the CMED, it is seemingly very ready to burn through piles of money. This is all going toward a project not yet generating any revenue and struggling to raise funds.
Since the April board meeting, little more than $1 million has been raised, as administrators continue to say they are inching toward the $25 million goal.
CMED’s annual salaries, before those of Perkowski, Fleischmann and Lanphear are factored in, total nearly $1.2 million annually.
When every other area on campus is seeing cuts, and every academic and service unit is undergoing prioritization to determine potential reductions, it is ludicrous for one still-developing element to get what looks more and more like a blank check.
The project has yet to demonstrate its true potential aside from buzzwords and lofty rhetoric. It all sounds like a risky bet for an otherwise conservative institution.
CMU delivered a balanced budget, and it deserves accolades for preparing so well for the hefty axe of state cuts to fall. A 3.47 percent tuition increase does not sound awful in any respect, even without its context as the state’s lowest hike.
However, the university’s funds ultimately come from the public — whether through tuition, state funding, charitable gifts or investments made from those monies. This demands fiscal responsibility across the board, even if it means delaying the completion of a certain pet project.
If the university would like a recommendation of where to start, this editorial board may have a certain place in mind.

The university expects $333,603,212 from the general fund in total revenue, which includes tuition dollars, state appropriations and other sources. The non-general fund, which includes other revenue such as parking tickets and several other sources, will generate about $95 million.

Tuition Revenue

Tuition dollars will account for $204,496,263, said David Burdette, vice president of Administration and Financial Services.

The number is $7 million higher than the previous fiscal year, which ended June 30. Tuition was increased about 3.5 percent, or $12 a credit hour from $346 to $358 per credit hour.

The 2,118 students still covered under the CMU Promise, a program which locked students in to a tuition rate for five years, will not experience the change.

All students who joined CMU in 2007-2008 when the Promise was active pay $304 per credit hour, or $9,120 for a 30-credit-hour year. Those not covered will pay $10,740 annually for the same hours.

Tuition increases at other universities have ranged from 3.65 percent at Eastern Michigan University to 7 percent at Oakland University.

Kathy Wilbur, vice president of Development and External Relations, said the tuition move will be helpful in dealing with state educational organizations, referencing a message she saw on Twitter from State Rep. Bob Genetski, R-Saugatuck.

Genetski, the chairman of the Higher Education subcommittee in the state House of Representatives, wrote in response to a Detroit Free Press article regarding the tuition news, “Great for students and state!”

Michigan State and Wayne State University have been accused of raising tuition above the 7.1 tuition restraint clause of the state budget. According to the Detroit News, MSU could lose $18.3 million in public funding, WSU could lose up to $12.8 million in public dollars.

Grand Valley State University was the last Michigan public university to reveal its rates when its board of trustees decided on a 6.9 percent increase on Friday.

Pay freezes

Four employee groups will see their wages frozen at least temporarily for a second year in a row; professional and administrative employees, senior officers, public broadcasting and office professionals will all have no pay increases for at least the beginning of FY 2011-12.

University President George Ross said the pay of these groups will be reviewed later this year.

“Given the continued uncertainty regarding the state appropriations funding and the economic climate, 2011 to 2012 salary adjustments will not be given at this time,” Ross said. “University-wide, budget-related employee furloughs and lay-offs will not occur in 2011-12.”

Two other employee groups have also seen pay freezes: the Police Officers Association of Michigan and American Federation of State, County and Municipal Employees.

The Graduate Student Union and Union of Teaching Faculty both received pay increases.

The university was in mediation with the Faculty Association, which represents tenure and tenure track faculty members at CMU, at the time, and fact finding with supervisory and technical employees.

Following Thursday’s meeting, the FA announced mediation was unsuccessful between the parties and the FA will also enter fact finding with the university.

The university is looking to find efficiencies by outsourcing some services, Burdette said, and 25 vacant full time equivalent positions have been eliminated.

He said CMU cut almost $3.8 million total from the following divisions in spring 2011 to prepare for losses in state funding: Central Administration, Academic Affairs, Finance and Administrative Services, Development and External Relations and the President’s Office.

“We have put together a plan of $3.7, almost $3.8 million of permanent reductions,” Burdette said.

Financial plan

Burdette said declining state appropriations are a major change in the new budget. The university has lost $12 million in state aid, or 15 percent from FY 2010-11.

Burdette highlighted the decline in state revenue since 2000-2001, when state aid accounted for 36 percent of revenue compared to FY 2011-12, where it accounts for 16 percent.

The university has also intentionally decreased student enrollment by 2.1 percent, University President George Ross said.

CMU will spend an additional $3.8 million on financial aid, $2.1 million on infastructure and $2.2 million in recruiting and hiring tenure-track faculty.

It currently spends $39.5 million on financial aid for various scholarships and grants; the additional $3.8 million will be spent on additional Board of Trustees Academic Scholarships, increased need-based aid and additional Study Abroad scholarships as well as others.