The University Record, March 18, 2002

Higher Ed Subcommittee solicits input

By Martin May

Flint Chancellor Juan Mestas (Photo by Marcia Ledford, U-M Photo Services)
The University’s financial status is strong said Interim President B. Joseph White in testimony before the State of Michigan Senate Higher Education Subcommittee March 8, which was held in the Clements Library on campus.

White highlighted the strong financial foundations of the University from its Triple-A bond rating from Moody’s, to its $3.5 billion endowment and to the regular support from the state. “We receive about $365 million per year from the State of Michigan. That is as reliable as support gets in an uncertain world,” White said.

Governor Engler’s proposed 2002–03 budget keeps state funding for the University at the same level as last year’s appropriation. The bill is still before the state house, but the proposed appropriation is expected to come through with little change.

The University also attains financial strength from its diversity of revenue streams, which means less risk, White said. “Our $3.5 billion in annual revenues is the result of a mix of state aid, tuition, grant and contract research income, private giving and a variety of forms of health care reimbursement. Overall, this diversification is a good thing,” he said.

While he is proud of the University’s current financial strength and of the state’s appropriation levels in uncertain economic times, White said he has some apprehension about the days ahead.

“I’m genuinely concerned about the future,” White said.

One of his worries is keeping tuition affordable for Michigan students and families. White said that a 6 percent tuition increase for resident undergraduate tuition does not net as much revenue as a 4 percent increase at private colleges and universities. “Ultimately we compete with dollars and not percentages,” he said.

“Obviously, worrying about having the resources to compete on the one hand, and the ability of students and families to pay, on the other, puts us between a rock and a hard place,” White said.

Maintaining a century-and-a-half old physical plant is another concern of White’s. He said that the University must not defer maintenance on its facilities. Renovations to Hill Auditorium and the School of Public Health are high priorities.

Another future uncertainty is the changes in leadership in Lansing. The committee’s chairman, Sen. John Schwarz, R-Battle Creek, and fellow committee member Sen. Alma Wheeler Smith, D-Ann Arbor, are finishing out their terms. As a result, the University will have to deal with new lawmakers next year during the appropriation process.

Sen. Schwarz, who was joined by Sen. Wheeler Smith and Rep. Chris Kolb, D-Ann Arbor, asked White about ideas for a new residence hall. White responded that there are plans to build a new housing unit within the next five years, probably on North Campus.

Flint Chancellor Juan Mestas also testified at the hearing.

“We are conscious and proud of the distinct mission of our campus and of our commitment to teaching,” Mestas said. The particular needs, mission and circumstances of each educational institution should be considered during the appropriation process rather than a reliance on formulas, Mestas stated.

Mestas stressed that the diversity of the Flint campus and its mix of traditional and non-traditional students help create a rich learning atmosphere.

Mestas also told the committee of the interconnectedness between the city of Flint and the University. The University is playing a vital part in the revitalization of the community, he said.