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May 17, 2010 - Image 2

Resource type:
Michigan Daily Summer Weekly, 2010-05-17

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Monday, May 17, 2010
The Michigan Daily - michigandaily.com

Senator questions
tax-exempt bonds

Physicists from around the world attend the Spring Symposium on Higgs Boson Physics in
West Hall on Friday. Here, audience members listen to Andre Gritsan from Johns Hopkins
speak on "spin determination of single-produced resonances at hadron colliders."
''symposi u__m_
targets hunt for
physiCs particle

University could see
limits on construction
financing options
Daily News Editor
One federal legislator could be
gearing up to take aim at an impor-
tant financing mechanism that many
schools use to finance construction
projects on their campuses.
Sen. Charles Grassley (R-Iowa) said
recently that he was concerned with
the findings of a government study
that examined, among other things,
the use of tax-exempt bonds by insti-
tutions of higher education.
"This report raises questions
for parents, students and taxpay-
ers about universities issuing bonds
and going into debt when they have
money in the bank," Grassley said in
a statement.
"Issuing bonds costs money on
interest and management fees," he
continued. "Does the expense of debt
service take money away from student
aid or academic service? Do bond issu-
ances occur even as universities raise
tuition and build investment assets?
These are fur-
ther questions to '
In arequestcfor
comment from >-'"
The Michigan-
Daily two weeks
ago, University KYLE SWANSON
spokesman Rick
Fitzgerald said vng
he believed itA f
was too early to
comment on the senator's comments
because he hasn'tyetlaid out a propos-
al for revising the current tax-exempt
bond program.
"It's too soon to really speculate,"
Fitzgerald said of the implications a
change could have on the University.
Fitzgerald acknowledged that a
change to the current system could
affect the University, which uses
tax-exempt bonds for construction
projects on campus. However, he
emphasized that the University only
does so for construction projects. -
But University officials are no strang-
ers to Grassley's calls for reform in
higher education. The ranking minority
memberrofthe Senate Finance Commit-
tee has a reputation for examining the
financial management practices of non-
profits, like the University.

In 2008, Grassley criticized the
investment and spending practices of
universities across the country, call-
ing on them to spend a greater share of
their endowments.
At the time, Grassley told The New
York Times, "Tuition has gone up, col-
lege presidents' salaries have gone up,
and endowments continue to go up
and up. We need to start seeing tuition
relief for families go up just as fast."
However, his efforts created contro-
versy at the University, where University
President Mary Sue Coleman told The
Michigan Daily last year that she strong-
ly disagreed with Grassley's assessment.
Coleman told the Daily at the time
that she felt the University needed
to balance current demands against
planning for the future - a reason
why a limited payout from the endow-
ment would be in place.
That same message was echoed in
Coleman's response to Grassley and
his colleagues on the Senate Finance
Committee - which requested infor-
mation about the endowment invest-
ment and payout policies at 136
universities in the U.S.
"The University of Michigan has
a responsibility to diversify and
strengthen its financial base through
its endowment in order to maintain its
quality and accessibility in the face of
inflation, inevitable fluctuations in the
financial markets, and tightening state
and federal budgets," Coleman wrote
in a response letter to the committee
at the time.
After several months of review,
Grassley eventually backed down
from his calls for higher mandatory
endowment payouts.
But questions still remain as to
whether Grassley will pursue a simi-
lar campaign with reform of tax-
exempt bonds. He has not yet called
for any such reform publicly, saying
instead that the issue needs to be
explored further.
At least one leading industry expert
has told The Chronicle of Higher Edu-
cation that any campaign to restrict
access to funding for higher education
could be devastating in the current
economic climate.
"Now would be a very bad time to
make it more difficult for nonprofit
organizations in this country to bor-
row money," Charles Samuels, an
attorney for the National Association
of Health and Educational Facilities
Finance Authorities, told the Chron-
icle last week. "It isn't going to really
help the cost of higher education to
restrict financing."

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Theoretical physicists
convene to discuss
Higgs boson
With about 210,000 gallons of oil
spilling into the Gulf of MexicLess
than two months ago, the Large Had-
ron Collider - a particle accelerator
located in a 17-mile tunnel beneath
Switzerland and France - set the
world record for the highest-energy
particle collision. Many physicists
believe the feat marks a significant
step forward in discoveringthe origin
of all mass in the universe.
A three-day conference hosted by
The Michigan Center for Theoreti-
cal Physics recently brought together
theorists from around the world to
discuss the next step in finding the

elusive particle known as the Higgs
Aaron Pierce, University profes-
sor of physics and co-organizer of
the spring symposium, described the
Higgs boson as the particle which,
among other things, is theorized to
give mass to all other subatomic par-
ticles, such as electrons and protons.
"The Standard Model is a spectac-
ularly successful theory that explains
most of what we know about particle
physics so far," Pierce said. "There is
one piece missing, and that one piece
is a particle called the Higgs boson."
Pierce added that physicists have
long been unable to explain that pho-
tons - particles responsible for elec-
tricity and magnetism - are massless
while other particles with a defin-
able mass are capable of facilitating
processes like radioactive decay. The
Higgs boson, he said, could resolve
the mystery.
James Wells, who is also a Uni-
See PHYSICS, Page 7


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