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June 29, 2009 - Image 8

Resource type:
Michigan Daily Summer Weekly, 2009-06-29

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Monday, June 29, 2009
The Michigan Daily - michigandaily.com

From Page 1
sity announced in March that it will
not increase tuition rates for Ohio
residents for the next academic year.
The tuition rate increase, com-
bined with enrollment changes, will
bring in a projected $54 million in
revenue for the University.
Regents Julia Darlow (D-Ann
Arbor) and Denise Ilitch (D-Bing-
ham Farms)voted against the tuition
increase, breaking the regents' two-
year streak of unanimous approval
of the budget.
Ilitch said she believes University
students should not be forced to pay
an increase in tuition, especially
with the state's current economic
"Just like families across Michi-
gan are doing during these tough
times, we need to re-evaluate our
priorities and our budgets," Ilitch
said. "We have to fix our budget cri-
sis from within - not on the backs of
working students and families."

administration could improve the
budget by making more internal
"It is my firm belief that we must
find new revenue sources and new
ways to contain costs, identify addi-
tional cuts that can be made atcevery
level, contain costs by centralizing
more functions to avoid duplicative
efforts and tighten our belts and
make the same difficult sacrifices
made every day by the hardworking
people that attend our fine institu-
tion," Ilitch said.
Sullivan said that in light of
Michigan's economic slump, it was
difficult for her and the Budget
Committee to determine the budget
for the 2010 fiscal year.
"We find ourselves in the middle
ofaverydifficulteconomic time, not
just for the state of Michigan, but
worldwide," Sullivan said. "And so
it has been a very challenging time
for us to put together a budget. The
budget team has worked harder this
year than ever before."
The budget takes into account
an estimated state appropriation
of $316.6 million for next year - a
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$10.4 million decrease from this
year's amount - and is waiting to
be approved by the House of Repre-
sentatives, Senate and Gov. Jennifer
The University won't know the
exactamount of state appropriations
until the state determines its budget
in October, but the state agreed to
maintain funding for higher educa-
tion at no less than the 2006 level
as a condition for receiving federal
stimulus money.
The 2010 budget represents the
largest investment in financial aid
that the University has ever made.
It includes $118 million in centrally
funded financial aid, which is an
increase for undergraduate finan-
cial aid by 11.7 percent.
"We are reaffirming our com-
mitment to meet the full dem-
onstrated financial need of all
undergraduates who are residents
in the state of Michigan," said Sulli-
van, in response to the financial aid
increase. "That has been our policy
in the past, and that will continue to
be our policy."
Donations from University alum-
ni and other University affiliates
are responsible for the increase in
financial aid funding.
"Many students are going to
see this year fewer loans and more
grant aid because of the increased
resources for financial aid and
because of more generous Pell
Grants from the federal government
and also because of more money
for work study," Sullivan said. "We
believe that more students will take
home actual cash and will need to
take out fewer loans.
"In addition we estimate that
22,000 University of Michigan fam-
ilies will benefit from the American
Opportunity Tax Credit."
The AOTC is a tax credit con-
tained in the stimulus package
available for families with one earn-
er making $80,000 or less or two
earners making $160,000 or less.
Sullivan said that the Budget Com-

mittee will begin preparing for the
budgets of fiscal years 2011 and 2012
because it is concerned that state
appropriations could be even lower.
"We have been engaged in long
term planning looking out at the
financial situation in Michigan for
the future as well," Sullivan said.
"And because of that, we are going
to institute a program of prudent
cost cutting to prepare us for fiscal
year '11 and fiscal year'12."
The program of prudent cost-
cutting has already been instated
for next year's budget, including $15
million in cuts, which will be taken
from every unit that receives Gen-
eral Fund money. The General Fund
represents 28 percent of the overall
budget and is composed of tuition
and fees, state appropriations and
indirect cost recovery on sponsored
research activity.
Some cost-saving measures have
already been enacted, some are cur-
rently in the process and some will
be done in the future, Sullivan said.
In the past six years, the Budget
Committee has saved and reallo-
cated $135 million from the General
Fund budget by monitoring the
University's purchasing and energy
conservation, containing health
care costs, using technology to
reduce administrative costs and by
shifting some expenses from the
General Fund to other funds.
But Sullivan said this year many
more of these cuts are goingto come
out of academic units instead of
operational units.
She added that the cuts will
not damage the University's aca-
demic programs, which are among
the most important aspects of the
undergraduate experience.
"We're going to (make cuts)
without doing damage to the aca-
demic programs because the aca-
demic programs are what are most
important to our students, and we
want to maintain an undergraduate
experience that is second to none,"
Sullivan said. "We have a terrific

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undergraduate experience here, and
I'm optimistic that we'll continue to
be able to do that."
As another cost-cutting mea-
sure, University President Mary Sue
Coleman, Sullivan, University deans
and all executive officers declined a
merit salary increase for the coming
fiscal year.
"We wanted to show leadership,"
Coleman said. "We have in our
budget a modest increase for fac-
ulty and staff, but we make a lot of
money, and we wanted people to see
that we're not going to have a salary
University faculty will see an
average 2.5-percent salary increase
while University staff will see an
average 2-percent salary increase.
Coleman said this year's budget
was constructed on the premise
that the University would "emerge
as a stronger institution."
But she said financial difficulties
are not over.
"We are not out of the woods,"
Coleman said. "We anticipate more
budget challengesinthenear future,
but we are confident in the institu-
tion's ability to move forward."
berg contributed to this report.

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