Commentary

Michigan Universities Doing Just Fine

And without more taxpayer money

You might get the impression that no one in Michigan values higher education, given the way university funding gets portrayed. A new report from a group called the Young Invincibles gives the state an F for the size of its subsidies to public universities. But the numbers tell a different story.

State and local governments spend more on higher education in Michigan than all but three other services according to the U.S. Census Bureau, trailing only K-12 education and public welfare. But higher education is not funded exclusively with tax dollars — it is also funded with tuition, fees, grants and other support.

Revenues have been growing over time even without additional money from state taxpayers. Total general revenues at state universities increased from $4.18 billion to $5.95 billion from 2006 to 2014, according to state reports. This is a 42 percent increase. Indeed, this is faster growth than seen in the state budget.

As state support dropped from $1.7 billion to $1.3 billion over the period — a 23 percent decrease — revenues from tuition and fees increased from $2.4 billion to $4.2 billion — a 77 percent increase.

Students get something for the extra money that they — or their parents — have provided universities. State higher education institutions are spending more on instruction and support activities. And universities are spending more on financial aid to their own students. This assistance increased from $336 million to $693 million from 2006 to 2014.

Financial aid is part of a strategy many universities use to get more revenue from the people that can afford its tuition while helping others with fewer means to attend the school.

The universities are also turning this additional money into more degrees. Overall, these state institutions awarded 15 percent more bachelor degrees and 10 percent more of other kinds of degrees and certification. (The student population only increased by 3.8 percent over the period.)

In this environment, what do taxpayers get in return for their spending? It doesn’t seem to be much. Michigan public universities are spending more money and pumping out more college graduates without taxpayers putting more money into the system.

As the budget season for Michigan lawmakers begins, residents should question the actual value of the $1.4 billion in state tax money given to these universities in 2015, considering that university revenues and expenditures seem to grow just fine without increased taxpayers support.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

City: Vote 'Yes' On Tax Hike or You May Die

Vote “yes” for our tax hike or you may die of a heart attack or your house may burn down.

That’s the message implied by mailings sent out last fall by the city of Rochester Hills to promote a property tax hike labeled as being for public safety.

Yet the mayor of that city is one of the local government officials complaining about a new law that restricts their communications before an election to increase property tax rates.

Rochester Hills Mayor Bryan Barnett spoke out against the legislation in a Lansing press conference in January. He also was critical of the law in another publication.

Barnett didn’t respond to an email seeking comment.

The city’s mailings had many claims that one resident considered overboard.

"There are always trade offs in life but this one can mean the difference between life and death as seconds matter in fire department response times," one mailing read.

One mailing read: “This one graph says it all. When a person is suffering a cardiac arrest, or a home is on fire, the goal is to arrive on the scene in less than five minutes. Our Rochester Hills Fire/EMS Department can not meet that goal often enough.”

The flier states that to fix the problem the City Council is asking voters “to approve” the millage and states the tax increase would cost “less than 1 cup of coffee per week.”

“With public safety, every second counts," the flier states.

The flier claims that due to a growing population in the city and more emergency calls, fire and EMS response times are slowing down. The city’s population was 68,825 in 2000, and increased by 4,300 people to 73,125 in 2014, according to the U.S. Census.

Rochester Hills resident Tom McMillin, a former state legislator, said he received the three large glossy, expensive mailings before the public safety millage was approved last fall. He called it an abuse of taxpayer dollars.

McMillin rejected the idea the city was neutral and its mailings were only for informational purposes.

“Using phrases like, ‘Why do we need a millage increase?’ and the tax hike will ‘cost less than 1 cup of coffee per week’ and passing the millage ‘can mean the difference between life and death’ — no one in their right mind doesn't think these taxpayer-paid mailings are clearly supporting the tax increase,” McMillin said in an email. “These mailings alone are exhibit A for a clear reason why the language stopping this abuse in SB 571 was very needed.”

The provision restricting local electioneering was added to Senate Bill 571 in December. The measure became Public Act 269 of 2015 when it was signed into law by Gov. Rick Snyder on Jan. 6. It prohibits schools and local governments from sending communications to residents that reference an upcoming local ballot question within 60 days of the vote.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.