February 20, 2012/The Detroit News
Cutting spending elsewhere to restore university funding would make state more competitive
Top corporate executives are making a strong case that Michigan's public universities and community colleges can be key drivers of economic growth if lawmakers and Gov. Rick Snyder can find a way to significantly increase the government's investment in higher education over the next decade.
Business Leaders for Michigan estimates that Michigan needs an additional 1.3 million college graduates to meet the work force demand expected in 2025, and accordingly should bolster funding of higher education by $1 billion over the next 10 years. University presidents are proposing to add an array of performance metrics to those proposed by Snyder so elected officials can make sure the state's investment will be well-spent.
The billon-dollar in new funding target would require more than doubling the 3 percent increase proposed in Snyder's budget plan for the next fiscal year.
Business Leaders, a nonprofit group aiming to make Michigan a top 10 state in job and economic growth, backs its claims with some interesting statistics:
In 2010, the major research universities had an estimated economic impact of $15.2 billion, equaling 4 percent of the gross state product.
An older study by the Michigan Economic Development Corp. in 2002 found that the total economic impact of all the schools was nearly $40 billion and almost 13 percent of the state domestic product.
Michigan universities ranked 10th in the nation in research and development in 2009 with $1.7 billion in spending. It led to fuel innovations, patents, business startups and new jobs. Between 2004 and 2008, in fact, Michigan was in the nation's top five states for new patents and business startups.
The state must build on these achievements, not shrink from the challenge, CEOs such as Dominos Pizza President Patrick Doyle are telling lawmakers.
That probably would be like preaching to the choir were it not for a 10-year recession in Michigan and a reluctance by elected officials to apply the necessary restraints before Snyder and a friendly Republican Legislature were swept into office a year ago.
State spending on higher education plunged during that period and still is almost $1 billion below prison funding. Business leaders say the state spends less than $5,000 annually per university student, compared to just under $30,000 per inmate each year. Which of those expenditures is most likely to make the state more competitive?
Business leaders say the schools could add as much as $200 million to their funding pot by more aggressively going after students from outside the state and country, who pay at least double the in-state tuition rate on most campuses. They want schools, particularly the smaller ones, to expand to create more space for in-state students.
But coming up with another $1 billion over 10 years — increases averaging $100 million per year in state funding — is a tall order considering the modest pace of Michigan's recovery. The goal will be more attainable if political leaders accept it as a priority and continue to emphasize efficiency and spending restraints wherever possible.