U-M President Mary Sue Coleman on Snyder's budget proposal: 'Why should we get so little?'

"We have gone in a decade from a top 10 state in higher education support to a bottom 10 state. We've raced to the bottom," Coleman said.

"Clearly the state has been under financial pressure.... But our prisons budgets have grown pretty darn dramatically, so you have to ask what’s more valuable" she continued. "We have taken the brunt (of budget cuts). The state has balanced its budget on the back of higher education."

Sndyer's proposal allots $1.4 billion of the state's $48.2 billion fiscal 2012-13 budget to higher education, up $36 million, or 3 percent, from the $1.34 fiscal 2011-12 allotment. Prisons are set to receive $1.6 billion and currently house 43,000 inmates.

The governor proposes that the $36 million increase be tied to a formula that recognizes universities for increasing graduation rates, the number of degrees awarded in critical skill areas, the number of Pell Grants awarded to enrolled students and tuition restraint.

With a six-year graduation rate of 89.7 percent —a rate that's already one of the highest in the country and not likely to significantly improve,— the lowest rate of Pell Grants at any university in the state and an average yearly tuition increase of 5.5 percent over the past 10 years, U-M doesn't fare well under Snyder's formula.

"If that’s the metric then we’re sunk," Coleman said bluntly.

In fact, U-M is to receive a 1.4 increase if Snyder's proposal is passed as-is, the second-lowest incremental increase in the state. The highest increase, a 7.6 percent bump, is planned for Grand Valley State University.

Nonetheless, U-M is set to receive $3.9 million in extra funds, the second-highest dollar amount of the $36 million increase. The school's total appropriations are drafted at $272.7 million.

U-M received roughly $368 million in state appropriations in 2002, the year Coleman began her tenure at the university. That year $1.85 billion was allotted to higher education and corrections was given $1.69 billion.

"It's tantamount to figuring out what the best diet is for a chicken and then taking that chicken feed and giving it to your very expensive thoroughbred racing horse," said Kimberlee Kearfott, vice chair of the faculty-run Senate Advisory Committee on University Affairs and an engineering professor. "You need different types of metrics for different types of universities."

Coleman agreed, saying that it makes no sense for the Legislature to compare U-M to lower tier schools and then for U-M to lose out in the process.

"We should be worried with how we compare to Princeton and Yale, not (state universities)," Coleman said. "Why would you want to penalize your most successful university in the state? It makes no sense to me.... Why should we get so little?"

As she has before, Coleman said the metrics are "very backward-looking" and would work better if they rewarded graduate education and entrepreneurship. Yet she stressed strongly her opposition to a set formula for doling out higher education dollars.

"We’ve been proposing alternatives with every breath that we have," Coleman said, saying that she saw formula funding models go awry in her time as an administrator in New Mexico and Iowa. "Formulas worry me, because I’ve seen it happen in other places that they say 'Well we can't fund the formula so we’ll just fund it at a certain percentage.' The formula means nothing."

Coleman is going to Washington D.C. on Tuesday to speak about higher education funding before Congress. In addition to addressing dwindling state funding, she will also address shrinking federal support, she said.

During the SACUA meeting, Coleman referenced President Barack Obama's January speech in Ann Arbor about reining in college costs. Obama said then that states need to reinvest in higher education and that universities need to quit letting tuition skyrocket. Coleman said the university has tried to cut operational costs, but has had no choice but to raise tuition.

"I can get beat up all everybody wants to about tution increases, but when you have this kind of disinvestment... there’s still a gap," she said.

Coleman criticized Snyder's budget proposal before the Michigan House Appropriation Higher Education Subcommittee earlier this month. More committee testimony from other university presidents is expected before the Legislature finalizes next year's budget.