March 28, 2006

Written by Ron Wilson, former president of the U of M Club of Greater Lansing

On Tuesday, March 21, 2006, the board of the U of M Club of Greater Lansing had an opportunity to meet with State Representative Dianne Byrum (D-Onondaga) to discuss the higher education budget for the next fiscal year.

Last summer, the Michigan Legislature adopted a budget that included $1.734 billion in funding for higher education. Higher education includes all of the public universities and community colleges. As the state's premier research university, the University of Michigan received $316 million (18.2%) of the $1.734 billion for its Ann Arbor campus In addition UM-Dearborn received $24.8 million and UM-Flint received $20.9 million.

Rep. Byrum maintained that as one of the nation's elite universities, U-M deserves to get stronger support and a greater allocation than the other universities. With fewer and fewer U-M graduates in the Michigan Legislature, U-M's greater allocation may be in jeopardy.

There will be much debate over the entire budget for the next fiscal year. One reason is that the State's revenue has not kept pace with the operational cost increases. Tax cuts implemented in the past have not generated the prosperity and economic growth predicted. In addition, the costs for health care, running prisons, and K-12 public schools and private academies continue to soar beyond the rate of inflation.

The other main reason is that it is an election year for the governor, attorney general, secretary of state, state senators and representatives. There could also be a ballot proposal to eliminate the State's Single Business Tax (SBT), which generates $1.734 billion annually, and a ballot proposal to ensure funding for K-12 and colleges to keep up with inflation.

Rep. Byrum noted that the SBT is scheduled to be phased out over the next couple of years. The ballot proposal would eliminate it sooner. Unfortunately, a replacement business tax has not yet been formulated. One thing is clear: It is very unlikely the Republican majority in the Michigan Legislature will want to create a replacement business tax that generates the same $1.8 billion in revenue.

Rep. Byrum maintains that higher education is an investment in the economic future of this state. She believes the new business replacement tax should be earmarked for higher education. The SBT generates $1.8 billion, roughly the same amount of money that is allocated to higher education each year. Michigan's universities are at the forefront of emerging biotech and biomass technologies, with U-M leading the way in hydrogen fuel cells and MSU in biofuel. The transfer of their intellectual property will play a key role in rebuilding the state's economy and developing a quality workforce.

Finding a replacement for the SBT will not be easy. Term limits, unfortunately, has taken away historical knowledge of elected officials and their staff pertaining to these revenue and spending issues. Most of the current State Senators and Representatives will be facing term limitations this year and will not be around for the discussion. Rep. Byrum is one, and so is Rep. Michael Murphy (D-Lansing).

It is incumbent upon University of Michigan alumni to participate in the debate about:

• Funding for higher education
• Allocation of the funding to U-M
• Finding a replacement business tax for the Single Business Tax that generates comparable funding
• Whether the replacement tax should be earmarked for higher education

Alumni should arrange meetings with their legislators and with the legislative candidates before the primary election in August and then again before the general election in November.

Alumni should get their legislator's ideas and understand their plans. Many of the legislative districts have been formulated or gerrymandered to keep the prevailing political party in control. As a result, the primary election in August and not the general election in November is the key battle ground to decide which person will win.

Instead, the focus for University of Michigan alumni, especially those living in Michigan, should be on the future of the state's budget and key questions like:

• Should higher education and K-12 education be sacrosanct?
• Should the allocation for U-M continue to be greater than for other universities?
• Will U-M tuition rates be affordable for your children and grandchildren to attend in the not so distant future?
• What programs would face cuts if funding for higher education and K-12 education were earmarked?
• Should the SBT replacement tax generate more or less revenue?
• Should the state increase other taxes or apply the sales tax to exempt items like dry cleaning, landscaping, etc?
• Can the state find ways to become even more efficient and cut costs?
• What can we do about the escalation of health care and prescription costs?
• Can we provide more staff for the Family Independence Agency to investigate abused and neglected children?

We are the Leaders and Best and our education and experiences should be at the forefront to help lead the discussion in each community. There will not be a zero sum game. There aren't any easy answers. That's why our input in the discussion is important.