FY 2019-20 HIGHER EDUCATION BUDGET                                     S.B. 140 (S-1):  SENATE SUBCOMMITTEE REC.

 

 

 

 

 

 

Senate Bill 140 (S-1 as reported)                                             Throughout this document Senate means Subcommittee.

Committee:  Appropriations

 

 

 

 

CHANGES FROM

FY 2018-19 YEAR-TO-DATE

FULL-TIME EQUATED (FTE) CLASSIFIED POSITIONS/FUNDING SOURCE

FY 2018-19

YEAR-TO-DATE*

FY 2019-20

SENATE SUBCOMM.

AMOUNT

PERCENT

FTE Positions..............................................................

                           0.0

                           0.0

 N/A   

 N/A   

GROSS..........................................................................

      1,669,732,600

      1,693,001,800

            23,269,200

               1.4 

Less:

 

 

 

 

   Interdepartmental Grants Received.........................

                              0

                              0

                              0

               0.0 

ADJUSTED GROSS....................................................

      1,669,732,600

      1,693,001,800

            23,269,200

               1.4 

Less:

 

 

 

 

   Federal Funds...........................................................

          123,526,400

          128,026,400

              4,500,000

               3.6 

   Local and Private.......................................................

                              0

                              0

                              0

               0.0 

TOTAL STATE SPENDING.........................................

      1,546,206,200

      1,564,975,400

            18,769,200

               1.2 

Less:

 

 

 

 

   Other State Restricted Funds..................................

          500,188,300

          500,537,300

                  349,000

               0.1 

GENERAL FUND/GENERAL PURPOSE...................

      1,046,017,900

      1,064,438,100

            18,420,200

               1.8 

PAYMENTS TO LOCALS...........................................

                              0

                              0

                              0

               0.0 

*As of March 5, 2019.


 

 

Gross

GF/GP

FY 2018-19 Year-to-Date Appropriation...............................................

$1,669,732,600

$1,046,017,900

 

Changes from FY 2018-19 Year-to-Date:

 

 

  1.  University Operations Increase. Governor included a 3% across-the-board increase based on each university's FY 2018-19 operations funding.

Senate provided a 1.5% increase through the performance funding formula used in recent years. Table 1 provides details of formula allocations. Table 2 compares FY 2018-19 year-to-date funding, the FY 2019-20 Governor's recommendation, and the FY 2019-20 Senate budget.

21,853,700

21,853,700

  2.  School Aid Fund Shift. Governor removed all School Aid Fund revenue ($500.2 million) in the Higher Education budget and replaced it with GF/GP. Under the Governor's proposal, this fund shift would be made possible through amendments to the Income Tax Act that would remove the $600.0 million earmark of income tax revenue for transportation. Removal of that earmark would cause that revenue to revert to the State General Fund. Lost transportation funding would then be replaced with revenue from increased fuel taxes. Senate did not include this fund shift.

0

0

  3.  MSU AgBioResearch Increase. Governor included a 3% increase for this program to mirror increases provided for university operations. The Senate included a 1.5% increase for this program.

518,900

518,900

  4.  MSU Extension Increase. Governor included a 3% increase for this program to mirror increases provided for university operations. Senate included a 1.5% increase for this program.

447,600

447,600

  5.  Tuition Incentive Program. Governor reduced this program to reflect boilerplate that would limit payments to three times the average rate for in-district tuition at community colleges. This reduction would bring total funding for the program to $59.8 million.

Senate did not include the payment limitation and kept the program at the current level of $64.3 million. Senate also reduced GF/GP supporting the program by $4.5 million and supplanted those funds with $4.5 million in Federal TANF dollars.

0

(4,500,000)

  6.  MPSERS Normal Cost Offset. Governor moved the $669,000 one-time FY19 item for this purpose to an ongoing appropriation and increased the amount by an additional $565,000 for a total normal cost offset of $1.2 million for the seven universities that are part of MPSERS. This amount will support the additional costs associated with brining the assumed rate of return for MPSERS funds from 8% to 7.05%. Senate concurred with the Governor's changes.

565,000

0

  7.  MPSERS Unfunded Accrued Liability Stabilization Adjustment. Governor reduced this item to reflect a reduction in the amount of the State's share of costs above the statutory cap. This reduction would bring total MPSERS UAAL payments to $5.0 million. Senate concurred with the Governor.

(116,000)

0

  8.  Children of Veterans Tuition Grant - Supplant Income Tax Checkoff. Governor replaced $100,000 in income tax checkoff revenue with GF/GP as this item no longer appears on tax forms. Total appropriations for this program would remain unchanged at $1.4 million. Senate concurred with the Governor.

0

100,000

  9.  Comparison to the Governor's Recommendation. The Senate is $18,320,000 Gross and $523,357,300 GF/GP under the Governor.

 

 

 

Total Changes.........................................................................................

$23,269,200

$18,420,200

FY 2019-20 Senate Appropriations Subcommittee Recommendation....

$1,693,001,800

$1,064,438,100

 


 

Boilerplate Changes from FY 2018-19 Year-to-Date:

  1.  Contingency Funds. Senate removed a section appropriating up to $6.0 million in Federal contingency funds for grants and scholarships. Under the removed language, funds may only be spent once transferred through the legislative transfer process. (Sec. 236b)

  2.  Receipt of Federal and Private Funds. Specifies that Federal and private funds received by the State for use of a college or university are appropriated for the purposes for which they are received. Governor removed a sentence that specifies that the acceptance of funds does not obligate the Legislature to continue the purposes for which the funds are made available. Senate retained existing language. (Sec. 242)

  3.  Transparency Reporting. Governor removed language that allows the State Budget Director to withhold monthly payments to universities if they fail to comply with statutory financial transparency requirements. Senate retained existing language. (Sec. 245)

  4.  Tuition Grant Limitation. Governor removed a sentence that specifies that the $4.2 million institutional limit placed on Tuition Grants does not apply to any other student financial aid program or in combination with any other student financial aid program. Senate did not make this change.

Senate increased the maximum amount of tuition grants from $2,400 per student to $2,500, and the maximum amount per institution from $4.2 million to $4.6 million. (Sec. 252)

  5.  Tuition Incentive Program - Limit Payment Size. Governor included new language that would limit payments made to universities under this program to a per-credit payment that does not exceed three times the average community college in-district tuition rate. Senate did not include this new language. (Sec. 256)

  6.  Tuition Incentive Program - Data Reporting. Governor removed language that would require an institution that does not report certain data to the P-20 longitudinal data system to report that data to the Department of Treasury. Senate retained this language. (Sec. 256)

  7.  U of M Douglas Lake Biological Station. Governor removed a section that designates Douglas Lake a special reserve and states the intent of the Legislature that no State programs or policies be developed that would have a deleterious impact on the research value of Douglas Lake. Senate retained this section. (Sec. 261)

  8.  Tuition Restraint - Lower Threshold. Governor reduced the allowable tuition increase under this section from 3.8% or $490 to 3.2% or $427. This change reflects a new policy of setting the tuition restraint cap at the rate of inflation plus 1.0%, whereas the policy in previous years had been twice the rate of inflation. Senate maintained the current policy, which resulted in a tuition cap of 4.4% or $587. (Sec. 265)

  9.  Tuition Restraint - Exceeding Limit. Governor removed language that restricts a university that exceeds the rate cap from receiving a capital outlay planning or construction authorization, as well as language that specifies that the Legislature may adjust the appropriation to any university that exceeds the rate cap. Senate retained the restriction on capital outlay projects for universities that exceed the rate cap, but concurred in removing the language referring to adjusting appropriations. (Sec. 265)

10.  Performance Funding. Governor changed the name of 'performance funding' to 'student affordability funding', and replaced the funding formula with an increase of 3% for all universities based on their FY 2018-19 funding. Senate retained current-year language, but added language stating the intent to update the existing performance funding formula metrics. (Sec. 265a)

11.  Academic Program Partnerships. Governor removed a section requiring the Michigan Community College Association, Michigan Independent Colleges and Universities, and the Michigan Association of State Universities to submit a report on academic partnership programs. Senate retained this language. (Sec. 265c)

12.  Campus Safety Programs - Utilization of Funding. Governor removed a section stating the intent of the Legislature that State funds provided to universities be used for campus safety programs, sexual assault prevention programs, and student mental health programs. Senate concurred with the removal of this section. (Sec. 265e)

13.  Indian Tuition Waiver - Remove Intent Language. Governor removed language stating the intent of the Legislature that for FY 2018-19 funds be allocated for unfunded North American Indian tuition waiver costs. Senate retained this language. (Sec. 268)

14.  Discouraged Instruction Activity. Governor removed a section stating the intent of the Legislature that public universities not use State funds to offer instructional activities that target companies or groups of companies for unionization or decertification of a union. The Senate retained this section. (Sec. 271a)

15.  Human Embryonic Stem Cell Research. Governor removed a section stating the intent of the Legislature that public and private organizations stem cell research provide certain information to the director of the Department of Health and Human Services. Senate retained this section. (Sec. 274)

16.  Use and Finance Noncompliance Penalty. Governor removed a section that imposes a 1% reduction in State funding to a community college for each violation of certain requirement of the Management and Budget Act. Senate retained this section. (Sec. 275a)

17.  Communication with the Legislature.  Senate included a new section urging each university not to take disciplinary action against their staff for communicating with the Legislature.  (Sec. 275d)

18.  HEIDI Data - Allow Counting of Distance Education and Inmates. Governor modified the HEIDI data audit requirements to allow distance learning and inmate programs to count toward university student credit hours. Senate partially concurred, allowing inmate programs, but retaining the prohibition on distance learning. (Sec. 289)

 

 

Date Completed:  4-24-19                                                                                                  Fiscal Analyst:  Josh Sefton

 

 

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.