Budget 2012: U-M receives 1.6% percent increase, must report stem cell research

Since Snyder proposed his budget in February, top U-M officials have been critical of the existing performance funding model, saying the metrics don't fairly track success.

Snyder and House lawmakers proposed funding be tied to improvement in degree completion rates, the number of degrees universities offer in "critical skill areas," the number of Pell Grant recipients attending the institution and tuition restraint.

Senate and House lawmakers agreed this morning to keep the tuition restraint and critical skill degrees metrics, but decided to eliminate the Pell Grant requirement and rework the graduation rate requirement. The new formula considers a university's Carnegie Classification, which takes into consideration completion rates and institutional support, among other things. The formula also rewards research and development expenditures.

The end result is a 1.6 percent funding increase for U-M, instead of the 1.8 percent increase proposed by a House appropriations subcommittee. As a whole, higher education funding increased 3 percent this year.

"While U-M saw only a 1.6 percent increase this year, they are still getting almost 11 percent of the performance money," said Rebecca Devooght, chief of staff for State Sen. Tonya Schuitmaker, R-Lawton, who was integral in higher education budget negotiations. Devooght said the new formula is the first step in measuring universities to their peers instead of other Michigan institutions.

"You can't compare Michigan to Northern; you can't even really compare Michigan State to Michigan," Devooght said.

U-M is set to receive $4.2 million in performance funding this year, prior to tuition restraint monies. Lawmakers are setting aside $9 million to be split between universities who keep tuition increases below 4 percent.

"Measuring performance is critical to ensure that our hardworking taxpayers get a return for their investments in ... education," state Rep. Kevin Cotter, R- Mt. Pleasant, said on the House floor Friday afternoon.

Democratic representatives expressed discontent over the stem-cell research reporting requirement and bill language pertaining to other social issues. For example, state lawmakers are requiring universities to prohibit students from protesting local businesses during their internships.

Rep. Rashida Tlaib, D- Detroit, said the boiler plate additions "directly violates a university's academic freedom."

"This is the kind of approach that leaves a bad taste to voters' mouths back home," Tlaib said. "This implies in many ways that we are for sale. ... This budget smells funny, it actually reeks."

The protest language, specifically requested by the Michigan Restaurant Association, was added in response to a handful of U-M students protesting a local business in Detroit during an internship with a nonprofit.

The stem cell requirement originates from a disagreement between Republican lawmakers and U-M —the only university in the state to conduct research using embryonic stem cells— on how U-M should report on its research. A House subcommittee wanted U-M to provide the exact amount of stem cells it's using for research purposes, but U-M President Mary Sue Coleman refused, saying "we don’t collect the data in this way."

GOP state representatives accused U-M of thumbing its nose at the Legislature and threatened to withhold funding from the school.

"As a legislative body, we are only as good as the information we can attain. They basically thumb their nose at the (Legislature),” Rep. Bill Rogers, R-Genoa Township, told MLive recently. Rogers chairs the state House's K-12 budget and Department of Education budget subcommittees.

In the new budget draft, the Legislature requires U-M to report on its use of stem cells more thoroughly than before, but does not require the school to disclose the number of embryonic stem cells it uses.

Devooght said U-M was not enthusiastic about the stem cell requirement remaining, but predicted that officials will report stem cell research as requested by the Legislature.

"They would be giving up almost $5 million in performance funding" otherwise, she said. U-M Vice President for Government Relations Cynthia Wilbanks said the stem-cell change is a "reasonable solution" but criticized the language forbidding protests.

"We vigorously disagree with the inclusion of that language in a higher education bill," she said.

Disagreements over how best to appropriate this year's 3 percent, $36 million funding increase forced the Legislature to miss its self-imposed June 1 deadline to pass the fiscal 2012-13 budget.

"There were serious differences of opinion," Wilbanks said. In fact, chair of the House subcommittee on higher education appropriations Rep. Bob Genetski, R-Saugatuck, removed himself from negotiations due to disagreements.

The House is expected to pass the agreed-upon higher education package at its afternoon meeting today and the Senate is expected to pass it next week.

Devooght admitted the comprise wasn't a perfect formula and said lawmakers will monitor how it plays out over the next year.

"We're going to really have to look at these because there's no perfect system when you're attempting to quantify and reward and look at universities that are this different," she said. "We're going to have to evaluate what goes on."

Added Wilbanks:

"I don’t think we're close to perfection. This bill is the result of some pretty serious discussions and a willingness at the end of the day to try and find a compromise."