Page 4-Friday, February 16, 1979-The Michigan Daily
DECISION-MAKING AT THE 'U'

4

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The University's money and where it all goes

Fourth in a series
Trends in revenues
and expenditures
Our study of the budget continues
witA an examination of data that we
compiled for the total current Univer-
sity budget, including the General
Fund, the Designated Fund, and the
Expendable Restricted Fund (referred
to hereafter as "All Three Funds"). We
also gathered information which per-
tains only to the General Fund.
Since the University's annual Finan-
cial Reports fail to present budget in-
formation in the depth or clarity we,
needed for our research, we devised an
entirely new classification system which
identifies the different functions ser-
ved by the University and distinguishes
between activities supporting those
funictions.
ONE BASIC function of-'4ie Univer-
siIjy-like all institutions of higher
education-is to provide instruction to
students at various schools and levels.
As a large, prestigious and diversified
Institution the University is also very
concerned with the promotion of
research. The University also provides
i ,stadent services (financial aid, coun-
seling, recreation, etc.) and public
services (museums, parks, broad-
casting services, etc.). The remaining
University functions we distinguished
are institutional perpetuation, in-
cluding general activities that maintain
the University as a lasting institution
(many administrative- costs,(financial
operations, public relations, main-
tenance of buildings and grounds, etc.),
and the provision of staff benefits.
We isolated six different activities:
direct academic work, including ex-
penditures to pay academic staff mem-
bers for actual instruction and resear-
ch; student aid, including all money
going to students primarily to pay for

thejr education; top-level ad-
ministration, including expenditures
for the president and the six vice-
presidents and their staffs; other ad-
ministration, including expenditures
for all other administrative activities
carried out at the University; suppor-
tive activities, including expenditures
for activities carried out to provide
substantive support for-a function; and
physical maintenance, including
money going to maintenance personnel
and physicla plant and supplies.
All our revenue data was obtained
directly from the University's Finan-
cial Reports for the years 1968, 1971,
1974, and 1977. Our expenditure data
were drawn primarily from two sour-
ces: the official University budget
document-the "Grey Book"-and the'
Financial Reports for those.
Sources of Revenue
TOTAL UNIVERSITY revenue in
constant 1977 dollars actually declined
by about 10 per cent between 1968 and
1977, from $304 million to $275 million.
From 1968 to 1974 the decline was at-

tributable mainly to a sharp drop in the
real value of federal grants. From 1974
to 1977 the continued depline was due
primarily to a cutback in the real value
of state appropriations. During the
nine-year period as a whole, student
fees increased continually as a part of
total University revenue, rising from
less than 15 to more than 20 per cent.
Total General Fund revenue in con-
stant 1977 dollars increased from $168
million in 1968 to $186 million in 1974,.
and then fell back again in 1977 to $173
million, almost to its 1968 level. State
appropriations provide the largest
share of General Fund revenue
(roughly 60 per cent), but they have
been declining gradually in percentage
terms since 1968 (from 60.3 per cent in
1968 to 57.8 per cent in 1977) and sharply
in real terms since 1974 (from $111
million in 1974 to $100 million in 1977).
Student fees have been increasing
steadily as a percentage of total
General Fund revenue, reaching 33 per
cent in 1977. The rise in student fees ap-
pears to have compensated for
declining overhead revenues from

research grants between 1968 and 1974
and lower state appropriations between
.1974 and 1977.
The University budget has become
smaller in real terms-during the past
decade, and the General Fund in par-
ticular has seriously declined since
1974. In the wake of declining real'
revenues from federal and state sour-
ces, students (or their families) have
had to assume an increasing share of
the financial burden of the University.
Allocation of Expenditure
Table 1 presents data on the pattern
of expenditures from All Three Funds
on each of the six basic functions
outlined earlier. We note first that there
has been a decline in the real value of
total University expenditures between
1968 and 1977, paralleling the decline in
real revenue. Expenditure on instruc-
tion rose gradually in real terms over
the nine-year period as a whole, but it
has declined from $102 million in 1974 to
$100 million in 1977. Expenditure on
research, which had been the largest
single expense in 1968, at $110 million,
declined significantly throughout the

period and was well below expenditure
on instruction by 1977 ($79 million).
This decline reflects the decreasing
availability of federal grants which
fund a substantial share of total
University expenditure on research.
The instruction and research fun-
ctions together account for about two-
thirds of the overall University budget.
Third in quantitative significance is in-
stitutional perpetuation which declined
slightly in constant 1977 dollars and as a
share of total expenditure, from 1968 to
1977. Expenditures on student services
increased, from 1968 to 1974 and then
began to decline. Expenditure on public
service accounts for only about one per
cent of the budget and it has been
slowly declining in real terms. Staff
benefits have, absorbed a small but
rapidly rising share of total expen-
diture because of continuing increases
in social security payments, growing
insurance and workers' compensation
rates, and improving fringe benefits for
University employees.
TRENDS IN THE pattern of expen-
ditue from the critical General Fund
are shown in Table 2. The real value of

General Fund expenditure, like
University revenue, rose from $165
millidh in 1968 to $182 million in 1974 and
then fell to $173 million in 1977. Expen-
diture on instruction accounts for
slightly less than one-half of the
General Fund budget, and its share has
changed little over the nine-year
period. As with All Three Funds, staff
benefits have grown significantly in
both real terms and as a share of
the General Fund budget.
The most striking change in the pat-
tern of General Fund expenditure since
1968 has been for the student service
function. Expenditure on student ser-
vice in constant 1977 dollars virtually
doubled from $11 million in 1968 to $20
million in 1977. Indeed, it almost:
doubled within the three-year period
from 1971 to 1974, and then declined
somewhat between 1974 and 1977.
The big increase in expenditure on
student service from 1971 to 1974 can be
attributed in large part to the Black Ac-
tion Movement strike in 1970 which we
discussed earlier in this series.
TOMORROW: The budget's impact,
on students, faculty,
and administrators
This series of articles on decision-
making at the University has been
adapted from a research report
titled "Conflict and Power on the
Campus: Studies in the Political
Economy of the University of
Michigan," written by Andy
Brown, Harley Frazis, Jim Robb,
Mike Taylor, Eitan Yanich, and
Tom Weisskopf.
This article was written by Mike
Taylor.

TABLE 1: USES OF EXPENDITURE FROM ALL THREE FUNDS

TABLE 2: USES OF EXPENDITURE FROM THE GENERAL FUND'

Millions of 1977 $.

Percentage Distribution

Millions of 1977 $

Percentage DistributionI

Use/Year
1. Instruction
2. Research
3. Student service
4. Public-service
5. Institutional
perpetuation
6. Staff benefits
TOTAL

1968 1971
91.9 96.9
109.9 93.6
35.0 35.6
3.2 3.0
47.2 41.6

1974
102.3
82.2
40.2
2.8
40.2

1977
100.0
78.7
33.8
2.5
39.8

1968
31.1
36.8
11.2
1.1
15.4

1971
34.6
32.9
11.6
1.1
14.1

1974
36.6
29.0
13.2
1.0
13.7

1977
36.4
28.7
12.3
.9
14.5

Use/Year
1. Instruction
2. Research
3.Student service
4. Public service
5. Institutional
perpetuation
6. Staff benefits
TOTAL

1968
74.7
18.4
10.6
2.0
28.1

1971
77.9
24.5
12.4
2.0
35.6

1974
82.1
22.8
23.2
1.8
34.0

1977
79.3
19.6
20.0
1.5
32.8

1968
45.7
11.2
6.3
1.2
16.5

1971 1974
47.8 46.1
14.4 12.6
7.0. 12.0
1.1 1.0
20.1 18.2

1977
45.9
11.3
11.6
0.9
19.0

13.0 15.7 17.7 19.7
300.0 286.4 285.3 274.5

4.4 5.7 6.5 7.2I

12.2 15.7 17.7 19.7
165.3 169.9 181.6 172.9

7.6 9.5 10.1 11.4

100.0

I- I

100.0 100.0 100.0

100.0 100.0 100.0 100.0

6

mmwmmmmmmll


420 Maynard St.; Ann Arbor, MI 48109
Eighty-Nine Years of Editorial Freedom
Vol. LXXXIX, No. 115 News Phone: 764-0552
Edited and managed by students at the University of Michigan

$500 is ak
lTITH INFLATION running ram-
pant, public universities across
the state are tightening their budgets,
and students looking for substantial
amounts of financial aid are finding it
more difficult to afford the costs of at-
tending a public institution. At the
same time, the state of Michigan is
pumping an increasing amount of
money into financial aid programs for
those students choosing to attend
private colleges in the state. We feel
this new program will seriously hurt
the University, as well as other public
schools across the state.
Public Act 105, a voucher plan for
private colleges in the state, which was
formally approved by Governor
Milliken in April of last year, ap-
propriated $500 for each freshperson
who chose to attend any private college
in the state-regardless of financial
need. The program is to expand over
the next four years to include all
students in private institutions, and the
annual cost of the program will be well
over $20 million.
The act was quietly hurried through
the legislature, and many officials at
at public colleges across the state were
not aware of the existence of the bill
until it was formally approved. Power-
ful lobbying efforts by the Association

)t of money
of Independent Colleges and Univer-
sities in Michigan (AICUM) succeeded
in obtaining support for the program,
and obviously this group is happy with
the results.
Unfortunately, the plan threatens to
undercut any aid which might be of-
fered to public colleges, because of its
exclusive focus on private schools.
Certainly, private colleges in Michigan
are in financial trouble. Decreasing
enrollments and rising operational
costs have pushed the tuition rates of
these schools to exceedingly high
rates, making it more difficult to at-
tract students.
Therefore, it is reasonable for these
schools to ask, for some financial
assistance from the state to help solve
their problems. However, by giving out
money to private school students
without any consideration of their
financial need is a glaring example of
taking it from the tax-paying poor to.
give to the rich.
The Michigan Council About Higher
Education 4VMCHE) is currently
pushing a petition drive to halt this
voucher program, and put the issue
before the voters in 1980. We heartily
support its efforts, and hope University
students and faculty will do the same.

I'm a reject. I've been rejected
by more than a hundred prospec-
tive employers over the past
three years in my search for a
summer internship. Newspapers
are my profession ... err, at least
I want them to be. Unfortunately,
I'm having a hard time convin-.
cing some managing and city
editors, specifically the ones who
do the hiring. And I always
thought Lou Grant was a good
guy.
Oh, I've done my homework. I
sent out more than fifty resumes
this year, more than fifty last
year and God knows how many
the year before. How can I forget
those semester breaks when I
slaved over my typewriter while
watching Michigan lose the Rose
Bowl. Bang, bang . . . ding.
Maybe those disappointing bowl
games cast a spell on my
resumes. Reject.
FOR THE PAST MONTH I've
been waiting for some en-
couraging letters to come back.
I'm still waiting. The only letters
from newspapers I get are ...
you guessed it, rejections.
"Dear Dennis, Thank you for
your interest in our newspaper.
Unfortunately . . ." Rejection.
"Dear Mr. Sabo: I'm sorry to
report . . ." Rejection. What a
haunting feeling.
Some newspapers don't even
seem to realize that being rejec-
ted is a private matter. Two
years ago, I received a rejection
notice from a San Francisco
newspaper on a postcard, simply
stating; "Sorry, we don't have
any openings for someone with
your qualifications." Sincerity at
its best.
NEVER MIND that each letter
only pushes you closer and closer
to the end of the plank of sanity.
Hell, there's only the unem-
ployment pit below, or even wor-
se, factory work. Ah, factories...
how do I love thee? I don't.
Period. I spent a summer

One student 's
lonely struggle
for acceptances
By Dennis Sabo

working on the automobile
assembly line, putting coffin-size
backseats into Chrysler New
Yorkers.. . one after another, 48
an hour . . . 48 an hour. Mr.
Goodwrench can keep it.
There must be a lot of rejects in
the world. Every day people are
rejected by employers, loved
ones, or by medical and law

small ray of hope in their letters
by sayirg they put your resume
on file "in case an opening oc-
curs." Bunk. Who are they trying
to kid? I'm a University of
Michigan senior who has been
schooled on deception. The only
file they put your letter in is the
nearest wastebasket. There I am,
clinging to that thin thread of

scribed to years ago. Some
people say the only good news is
no news. I don't buy that.
Last month I went for an inter-
view with The Chicago Tribune. I
thought the interview went well,
but the other 500 applicants
seeking one of the two positions
probably-thought theirs did too. I
don't really expect a job offer,
but certainly wouldn't object to
hearing from the personnel direc-
tor. Please call soon, Sheila.
I KNOW OTHER students, in-
cluding Daily staffers, who have
taken off to Cleveland, Rhode
Island, Boston and halfway
across the universe in search of
summer employment. All are
confident they did well in their in-
terviews, and remain optimistic
about employment. I'm sure at
least fifty of the hundreds of ap-
plicants at each newspaper can
be classified as excellent, but
where do the managing editors go
from there? Swisher, two poing.
My roommate, whom I con-
sider to be a hard working pre-
med-student, hasn't heard an en-
couraging word from the dozen or
so medical schools to which he's
applied. Oh, off the rim. Betters
luck next time, kid.
I don't want to be a reject, but I
don't want to work for some rural
Daily Gazette or some obscure
newsletter in the, likes of
Jones town, Guyana either (oh,
that's right, they stopped
publishing last November).
C'mon, you managing editors.
I'll take you one on one. C'mon,
I'll show .you! Won't you please
call or write. In the interests of
my future, I look forward to
hearing from you soon. Sincerely,
Dennis Sabo, prospective non-
reject.
Dennis Sabo, the Daily's
Special Features Editor, is
still watching his mailbox.

schools. "Sorry to inform you . .
." or, "I think it's time we ended
our relationship." Rejects. Heck,
relationships always come to an
end, not always a happy one, but
nevertheless an end. As for. em-
ployers and professional schools,
it makes you wonder how two ap-
plicants out of 800 or 100 out of
1500 ever make it in. Keep those
cards and letters coming, folks.
I ALWAYS LIKED the way
some employers let linger a

hope as my neatly typed letter
and resume are crumbled into a
little ball by a laughing managing
editor who lets a hook shot go.
Fifteen footer ... good, two poin-
ts,! Later, my fortunes go upin
smoke, along with empty tater tot
bags, dirty linen and other assor-
ted junk at the city dump.
Lwait for the phone to ring. No
call. I wait for the mail but only
get subscription forms to
magazines I've already. sub-

Letters
Students should be concerned about tenure


,,,, s - , ' ,- v. ,
* i i

To the Daily:
Brian Blanchard's column con-
cerning the proposed Teyas
legislation to change that state
university's tenure proceedings
raises the point that some
changes can-be for the worse. But
I hope we don't jump from this to
the conclusion that all attempts
at changing tenure systems are
inevitable failures.
Blanchard is concerned (and
justly so) that the teaching
"profession, of all professions, is
one that must be safe from the
hazards of faddish decision
making and politics." What bet-
ter way to balance the biases of
the latest research fads than to
;make tehing and service

volvement in tenure proceedings.
This will take place March 20 and
21 at the Union.
Student involvement is a
means of putting the L.S.&A.'s
verbal respect for teaching and
service into practice. And prac-
ticing respect for teaching and
service can better ensure
academic freedom.
-Stephen J. Conn
Racism
To the Daily:
I would like to congratulate
Keith Richburg and the Daily for
work done in last Sunday's
Magazine. Racial tension has

constantly identified as a black
person. Is he a black man, or a
man whose multitude of charac-
teristics include the fact that his
ancestors came from Africa?
How central is race to his idgn-
tity& how central is race to iden-
tity in American society? Can
that be changed? 2) The problem
of racism, as articulated by
Richburg, is one that confronts
black people, and in this case,
black students. Given that
framework, solving the problem
of racism runs into a sullen road-
block: what's in it for whites?
Does racism oppress white
students? If so, how? An answer
to this will go some towards
healing the sickness of racism in

safe, clean water supply has led
to malnutrition, disease and
death in infants all around the
world. This commerciogenic
malnutrition has been observed
and reported by doctors in coun-
tries as distant as Tanzania and
Guatemala.
Readers should also be aware
that there are several American
Firms , which sell formula in
developing countries. Three of
these firms: American Home
Products, Bristol-Myers, and
Abbott/Ross Laboratories, will
be facing shareholder proposals.
aimed at modifying their
marketing practices in
developing nations where their
infant formulas cannot be safely

i .- ."