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FY 2024-25 HIGHER EDUCATION BUDGET

S.B. 752 (S-2): COMMITTEE OF THE WHOLE REC.

(as reported)

 

FULL-TIME EQUATED (FTE) CLASSIFIED

POSITIONS/FUNDING SOURCE

FY 2023-24

YEAR-TO-DATE*

FY 2024-25

COMMITTEE OF THE WHOLE REC.

CHANGES FROM

FY 2023-24 YEAR-TO-DATE

AMOUNT

PERCENT

FTE Positions.............................................................

0.0

0.0

N/A

N/A

GROSS.......................................................................

2,291,048,800

2,325,732,700

34,683,900

1.5

Less:

 

 

 

 

Interdepartmental Grants Received............................

0

0

0

0.0

ADJUSTED GROSS....................................................

2,291,048,800

2,325,732,700

34,683,900

1.5

Less:

 

 

 

 

Federal Funds..........................................................

131,026,400

3,200,000

(127,826,400)

(97.6)

Local and Private......................................................

0

0

0

0.0

TOTAL STATE SPENDING.........................................

2,160,022,400

2,322,532,700

162,510,300

7.5

Less:

 

 

 

 

Other State Restricted Funds....................................

482,268,300

451,668,300

(30,600,000)

(6.3)

GENERAL FUND/GENERAL PURPOSE......................

1,677,754,100

1,870,864,400

193,110,300

11.5

PAYMENTS TO LOCALS............................................

0

0

0

0.0

*As of February 7, 2024.

 

Major Boilerplate Changes from FY 2023-24 Year-to-Date:

1.   Repealed Sections. 236h (FY 2022-23 MPSERS Paydown), 236k (Per-FYES Funding Floor), 236n (FY 2022-23 TIP Supplemental), 236o (ITEM Certification), 241d (Higher Education Coordinating Council)

2.   Michigan Achievement Scholarship (MAS). The Senate amended language for this program to increase last-dollar awards for community college students as follows: For students paying in-district tuition, all tuition and fees; For students who live in a college district but are attending a different community college, all tuition and fees, capped at the in-district tuition of the student's "home" college; For students who do not live in a community college district, $1,000. The Senate additionally increased the award amount for students at independent colleges and universities from $4,000 to $5,500, and made program awards for students at 4-year public and independent colleges and universities all "first dollar".

3.   Tuition Restraint. The Senate maintained the current-law maximum increase of 4.5% and adjusted the maximum dollar increase to $703.00.

4.   Tuition Grants. The Senate included language that would begin phasing out the program by prohibiting students from receiving an award under both the Tuition Grant and MAS. The high school class of 2023 would be allowed to continue to receive both.

5.   Other Boilerplate Changes. NEW 236q (Institutional Best Practices), NEW 236r (Education Performance Study), NEW 247 (Reconnect Administration), NEW 270 (Bay Mills ITW Reimbursement), NEW 275l (Cost of Attendance Report), NEW 275m (Housing Report), NEW 275n (Scholarship Award Conditions)

 


FY 2023-24 Year-to-Date Appropriation..................................................

$2,291,048,800

$1,677,754,100

 

 

 

CHANGE FROM
FY 2023-24
Y-T-D

FY 2024-25 RECOMMENDED
APPROPRIATION

Gross

GF/GP

Gross

GF/GP

Baseline Adjustments

 

 

 

 

  1.  Transfer Michigan Reconnect from Department of Labor and Economic Opportunity (LEO) Budget. The Senate moved funding for the Michigan Reconnect Program from LEO to the Higher Education budget. This change would result in a $12.0 million reduction to the program relative to the current year, as LEO currently has $62.0 million appropriated for program awards. There is sufficient work project spending authority from prior years to ensure scholarship awards under the program are not affected.

50,000,000

50,000,000

50,000,000

50,000,000

  2.  MPSERS Normal Cost Offset. The Senate reduced appropriations for MPSERS normal costs, which are the present value of the cost of future retirement benefits accrued during a year of employment. This appropriation varies annually, based on market conditions, payroll growth, and various other actuarial assumptions.

(600,000)

0

8,500,000

0

  3.  North American Indian Tuition Waiver (ITW) Adjustment. The Senate included an adjustment to ITW payments to universities, based on the most recent ITW cost data submitted to the Department of Civil Rights.

507,800

507,800

12,826,100

12,826,100

  4.  Children of Veterans and Officer's Survivor Tuition Grant Program. The Senate included additional funds to support existing awards from this program. Increases in tuition and fee costs, as well as an increase in the number of veterans considered to be totally and permanently disabled has led to increased program costs.

600,000

600,000

2,000,000

2,000,000

  5.  Remove FY 2023-24 One-Time Appropriations.

(117,870,000)

(87,870,000)

0

0

New Programs/Program Increases

 

 

 

 

  6.  University Operations Increase. The Senate included a 2.5% ongoing operations increase for universities, distributed proportionately to each university's FY 2023-24 operations amounts. This amount also includes a 2.5% increase for MSU Extension and MSU AgBioResearch.

42,536,800

42,536,800

1,744,005,800

 

 

1,300,837,500

  7.  Tuition Incentive Program (TIP). The Senate increased appropriations for TIP to reflect increased uptake of the program, as well as to reflect increases in community college tuition that have caused the cost of Phase I of TIP (community college tuition waiver) to increase.

20,000,000

20,000,000

93,800,000

93,800,000

Eliminations/Reductions

 

 

 

 

  8.  Michigan Competitive Scholarship (MCS). The Senate included a reduction to the MCS to reflect the 2nd year of phasing-out the MCS for students who receive an award from the MAS

(6,930,800)

(6,930,800)

19,930,900

19,930,900

  9.  Michigan Tuition Grants (MTG). The Senate included a reduction to the MTG to reflect a new proposal to phase-out the MTG for students who receive an award from the Michigan Achievement Scholarship. The high school class of 2023 would be allowed to continue to receive an award from both programs if the student received both awards in the current academic year.

(7,095,600)

(7,095,600)

34,925,900

34,925,900

One-Time Appropriations

 

 

 

 

10.  Institutional Best Practices Incentive. The Senate included a one-time incentive pool that would be available to universities that certify that they have met the following criteria: 1) Require students to participate in institutional and academic orientation; 2) Require students to receive an academic map for their program; 3) The university has a policy for assessing and providing credit for prior learning; 4) The university uses a co-requisite model for delivering remedial or developmental education, and that those classes are offered at no cost; 5) Require students to meet with a designated academic advisor each semester. 6) Requires discounts for on-campus housing if more than one year on campus is required by university policy. 7) Accept students with associate degrees as juniors upon transfer to the university. Payments would be distributed proportionately to each university's operations increase amount.

42,536,800

42,536,800

42,536,800

42,536,800

11.  MPSERS UAAL Paydown. The Senate included $4.1 million to pay down the unfunded actuarial accrued liabilities (UAAL) associated with the 7 universities that have employees in the MPSERS system. As of the end of FY 2021-22, approximately $82.0 million in UAAL was remaining. The current liability is likely lower than this amount due to payments into the system and growth of MPSERS assets.

4,100,000

4,100,000

4,100,000

4,100,000

12.  Other One-Time Appropriations. The Senate included 8 other one-time appropriations: Statewide University Cybersecurity- $2,810,000; FAFSA Completion and University Outreach programs- $1,500,000; Project Clean Western Michigan University- $750,000; Omni Grand Valley State University- $570,000; Small Business Development Center supports- $500,000; Bay Mills Community College ITW Reimbursement- $498,800; Education performance study- $200,000; City of Kalamazoo Campus Safety- $70,000; Infrastructure, Technology, Equipment, Maintenance, and Safety (ITEMS) Grants: $100 placeholder.

6,898,900

6,898,900

6,898,900

6,898,900

Other

 

 

 

 

13.  Federal TANF Fund Shift. The Senate included a fund shift that would remove $127.8 million in Federal TANF funds that currently support student financial aid awards under the TIP, MCS, and MTG programs. These funds would be replaced with GF/GP.

0

127,826,400

148,656,800

148,565,800

14.  Postsecondary Scholarship Fund (PSF). The Senate did not include any net increase in appropriations to the Fund. However the Senate changed fund sourcing within the budget so that all State financial aid programs (with the exception of Gear Up, which is funded from a dedicated Federal grant) use the PSF as a fund source. To facilitate this, $200.7 million GF/GP was removed from the TIP, MCS, MTG, Michigan Reconnect, and the Children of Veterans & Officer's Tuition Grant, and deposited into the PSF. There would be no net programmatic or GF/GP impact from this change.

0

0

500,656,800

500,656,800

 

 

 

 

 

 

Total Changes...............................................................................................

$34,683,900

$193,110,300

 

FY 2024-25 COMMITTEE OF THE WHOLE REC............................................

$2,325,732,700

$1,870,864,400

 

 

 

Date Completed: 5-8-24 Fiscal Analyst: Josh Sefton