LANSING – Public universities would have to hold tuition increases to no more than 3 percent to receive part of a proposed funding increase under the higher education budget for the 2013-14 fiscal year approved Tuesday by a House subcommittee. Governor Rick Snyder’s budget recommendation called for limiting tuition increases to 4 percent.

Additionally, tuition restraint funding would be brought under the overall performance funding increase instead of standing on its own under the bill approved by the House Appropriations Higher Education Subcommittee.

HB 4221 allocated the full $24.9 million in new funding through the participation in at least three reverse transfer agreements ($5.5 million), a dual enrollment policy ($2.8 million) and participation in the Michigan Transfer Agreement ($16.8 million). The bill would also change the formula used, using a weighted number based on resident undergraduate fiscal year equated students.

The bill was approved with a 4-3 vote on party lines.

Rep. Al Pscholka (R-Stevensville), chair of the subcommittee, said the bill increases investment in agriculture, one of the biggest economic drivers in the state. He also said the budget encourages responsible spending.

The subcommittee’s bill also retains the language including mandated health insurance fees for uninsured students as a part of tuition when determining if a university kept its tuition increase to 3 percent or less. Last year, there was a dispute on Michigan State University assessing a fee against students without health insurance. The eventual budget included counting the fee toward tuition, and MSU dropped the fee. Snyder proposed ending the language for the new fiscal year budget.

Rep. Sam Singh (D-East Lansing) proposed an amendment to delete the health insurance language, but the Republican-led subcommittee rejected it. He said no university currently mandates health insurance for uninsured students.

The bill would re-appropriate funds due to noncompliance in performance funding or employee contract requirements to MSU AgBio Research and Extension programs (up to $2.2 million), Michigan Public School Employees Retirement System (up to $7 million) and any remaining funds would go to universities in performance funding proportions.

The governor’s budget recommended changing the Tuition Incentive Program in statute to include a new reimbursement program for public universities limited at 300 percent of the average community college tuition rate. The subcommittee’s bill retains current language, but intends to change policy in the 2014-15 budget.

The governor also recommended eliminating a provision of the Tuition Grant program that allows funds not used in the program to carry over to the next year, the governor also recommended changing the deadline to March 1 from July 1 and adding a requirement that independent institutions report on the number of grant students who graduated. The subcommittee’s bill retains all original language.

The bill also retains the requirement that universities post salary lists on its website, which the governor proposed to delete. But the bill would add requirements to report General Fund budget projections, a listing of all debt service obligations and the number of Pell Grant graduates, as the governor recommended.

Universities would also report to the Department of Community Health regarding compliance with federal guidelines while doing research using human embryotic stem cells, language the governor recommended deleting, but is kept in the subcommittee’s bill.

Pscholka said the subcommittee did not change very much from last year’s bill and that is why the stem cell research language stayed the same.

The governor also recommended getting rid of language requiring universities report on efforts to accommodate the religious beliefs of students in accredited counseling programs, but the subcommittee’s bill also retained that language. That addresses a situation that occurred at Eastern Michigan University when a counseling student, Julea Ward, was disciplined for refusing to provide counseling to a gay student because his sexual orientation violated her religious beliefs.

The bill would also require the MSU AgBio Research and Extension programs to release an annual report containing financial data and metric goals. The bill unrolls the governor’s appropriation of $29.7 million to AgBio Research and $25.6 million to Extension.

Singh said the bill was about politics more than it was about policy. Singh said changes like looking at Pell Grants as a performance metric could have been added, which is something many university presidents asked for when testifying.

“Because we’ve been focused on political things instead of actual policy things, there were a number of things we could have done on the metrics to make them stronger,” he said.

The overall budget bill contains $1.43 billion ($1.13 billion General Fund); this is a 2.2 percent increase from last year, (2.8 percent increase in General Fund dollars). The budget bill’s funding level is the same as recommended by the governor in February.

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