FY 2019-20 HIGHER EDUCATION BUDGET                                             H.B. 4236 (CR-1):  CONFERENCE REPORT

 

 

 

 

 

 

 

 

 

 

 

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

CONFERENCE

AMOUNT

PERCENT

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

                           0.0

                           0.0

 N/A   

 N/A   

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

      1,669,732,600

      1,685,545,000

            15,812,400

               0.9 

Less:

 

 

 

 

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

                              0

                              0

                              0

               0.0 

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

      1,669,732,600

      1,685,545,000

            15,812,400

               0.9 

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

      1,557,518,600

            11,312,400

               0.7 

Less:

 

 

 

 

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

          500,188,300

          349,419,300

        (150,769,000)

           (30.1)

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

      1,046,017,900

      1,208,099,300

          162,081,400

             15.5 

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

                              0

                              0

                              0

               0.0 

*As of July 1, 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:

 

 

Items Included by the Senate and House

 

 

  1.  North American Indian Tuition Waiver Shortfall. The House and Senate provided an additional $6.7 million GF/GP to offset costs incurred by universities under Public Act 174 of 1976.  Additionally, the House and Senate removed a $300,000 item that was previously used to offset a portion of those costs, and rolled that amount into the operations line for each university.

6,687,100

6,687,100

  2.  MPSERS Normal Cost Offset. The 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%. The House and Senate concurred with the Governor's changes.

565,000

0

  3.  MPSERS Unfunded Accrued Liability Stabilization Adjustment. The 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. The House and Senate concurred with the Governor.

(116,000)

0

  4.  Children of Veterans Tuition Grant - Supplant Income Tax Checkoff. The 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. The House and Senate concurred with the Governor.

0

100,000

Conference Agreement on Items of Difference

 

 

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

Senate provided a 1.0% increase through the performance funding formula used in recent years. The House included a 0.4% increase through a modified performance funding formula.  The Conference included a 0.5% increase through the current performance funding formula. Table 1 provides details of formula allocations included by the Conference. Table 2 compares FY 2018-19 year-to-date funding, the FY 2019-20 Governor's recommendation, and the FY 2019-20 Senate, House, and Conference budgets.

7,882,000

7,882,000

  6.  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.  Senate did not include this fund shift, whereas the House did include the fund shift.  The Conference included a smaller shift of $150.3 million.

0

151,118,000

  7.  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, and the House included a 1.0% increase.  The Conference included a 1.0% increase for the program.

345,900

345,900

  8.  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, and the House included a 1.0% increase.  The Conference included a 1.0% increase for the program.

298,400

298,400

  9.  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.

The House, Senate, and Conference did not include the payment limitation and kept the program at the current level of $64.3 million.

The Senate and Conference also reduced GF/GP supporting scholarship and grant programs by $4.5 million and supplanted those funds with $4.5 million in Federal TANF dollars.

0

(4,500,000)

10.  Pregnant and Parenting Student Services Grants.  The House and Conference included $150,000 for grants to universities to provide pregnant and parenting services under Public Act 500 of 2004.

150,000

150,000

11.  Michigan Competitive Scholarship Reduction.  The House reduced support for this scholarship program by $2.1 million GF/GP, which would reduce total support for the program to $30.3 million.  The Conference did not include this reduction.

0

0

12.  Tuition Grant Increase.  The House increased support for this program by $500,000 GF/GP, which would have increased total support to $38.5 million.  The Conference did not include this increase.

0

0

 

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

$15,812,400

$162,081,400

FY 2019-20 Conference Report Appropriation..............................................

$1,685,545,000

$1,208,099,300

Amount Over/(Under) GF/GP Target:

$0

$0


 

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

Items Included by the Senate and House

  1.  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. The 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. The House, Senate, and Conference retained existing language. (Sec. 242)

  2.  Tuition Incentive Program - Limit Payment Size. The 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. The House, Senate, and Conference did not include this new language. (Sec. 256)

   3.  U of M Douglas Lake Biological Station. The 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. The House, Senate, and Conference retained this section. (Sec. 261)

  4.  Discouraged Instruction Activity. The 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 House, Senate, and Conference retained this section. (Sec. 271a)

  5.  Human Embryonic Stem Cell Research. The 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. The House, Senate, and Conference retained this section. (Sec. 274)

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

Conference Agreement on Items of Difference

  7.  Contingency Funds. The 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. The House and Conference retained this section. (Sec. 236b)

  8.  Transparency Reporting. The 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. The Senate retained existing language. The House retained existing language and added several requirements.  The Conference retained the existing section with the new requirement of reporting the number of students who complete the FAFSA. (Sec. 245)

  9.  Tuition Grant Limitation. The 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. The House increased the maximum grants to $2,450 and $5.0 million per institution.   The House increased the maximum grants to $3,000 and $5.0 million per institution, and included new language prohibiting Treasury from using tuition grants to offset the costs of other financial aid programs. (Sec. 252)

10.  Tuition Incentive Program. The 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. The House and Senate retained this language. The House and Conference removed the requirement that applicants for the program not be incarcerated. (Sec. 256)

11.  Tuition Restraint - Lower Threshold. The 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. The House concurred with the Governor. The Senate and Conference maintained the current policy, which resulted in a tuition cap of 4.4% or $587. (Sec. 265)

12.  Tuition Restraint - Exceeding Limit. The 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. The House and Conference retained both the restriction on capital outlay projects and appropriation adjustment language. (Sec. 265)

13.  Performance Funding. The 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. The House removed two of the four Carnegie metrics, included a new metric based on in-state retention of graduates, and re-weighted the formula factors.  The Conference retained the current formula and included a statement of intent that new metrics would be developed using input from Subcommittee hearings to be held this fall. (Sec. 265a)

14.  Academic Program Partnerships. The 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. The House, Senate, and Conference retained this language. (Sec. 265c)

15.  Campus Safety Programs - Utilization of Funding. The Governor and Senate 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. The House and Conference retained this section. (Sec. 265e)

16.  Indian Tuition Waiver - Remove Intent Language. The 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. The Senate retained this language. The House and Conference retained the intent language, but removed language directing the expenditure of a lump-sum appropriation for waiver costs, as the costs would be instead reflected in each university's appropriation. (Sec. 268)

17.  Communication with the Legislature.  The Senate and Conference 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. The Governor, House, and Conference 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:  9-11-19                                                                                                  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.