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Higher education burden among the largest in governor's proposed budget

Gov. Jennifer Granholm's proposed cut from higher education of 10 percent is a "serious and significant" reduction that will cost the University slightly more than $36 million, said President Mary Sue Coleman. In her proposed budget announced March 6, Granholm called for a 6.5 percent cut in funding to colleges and universities on top of a 3.5 percent midyear reduction.

"The appropriation, if approved by the legislature, would reduce us to the level of funding we received from the state five years ago," Coleman said. It will be very difficult to do more with much less, she said.

"We are prepared to do our share, but we're teaching more students and conducting a higher volume of research than ever before," Coleman said. "We need to keep our eye on the future, doing whatever we can so that short-term budget challenges don't become long-term obstacles.

"We are committed to maintaining the excellence of the University of Michigan and the best possible educational experience for our students," the president said.

Higher education institutions in the state stand to lose a total of $154 million under the governor's plan. But Coleman stressed Granholm's proposal is just the beginning of a several month-long budget process. The president said the numbers could fluctuate one direction or another before the final budget is passed. During upcoming hearings, the University will have an opportunity to state its case for what the president calls, "support that is essential to the long-term strength of the University."

In addition to the governor's proposed cuts, Coleman said U-M has approximately $50 million of anticipated operational cost increases in areas such as financial aid, student support, utilities, benefits and modest salary increases for employees.

The president reiterated her commitment to putting the needs of students first in the budget-cutting strategy. Coleman said both academic and business units continue to look for ways to reduce spending. She said Provost Paul N. Courant is working with deans and directors on managing cuts in individual units. "We will have to make some difficult choices regarding next year's budget."

The Governor's proposed budget

In addition to announcing a 10 percent reduction in state aid to colleges and universities, Gov. Jennifer Granholm called for a cut in funding for the Life Sciences Corridor of more than half the expected level of supportfrom $45 million down to $20 million.

"While we are pleased that the governor supports funding for the Life Sciences, this cut is deep," Coleman said.

The governor and legislature face a $1.7 billion budget deficit, which Granholm addressed March 6 with a proposal for $1.1 million in cuts and $600 million in revenue adjustments. Other parts of her plan, include:

• Cut in Merit scholarships from $2,500 to $500 for each eligible student beginning with this year's junior class

• No cut in the foundation allowance for K-12 (to remain at $6,700 per pupil)

• 65 percent reduction in adult education

• 50 percent cut in arts funding

• 3 percent cut in revenue sharing to cities and counties

• No increase in taxes

• No cuts to health care provider coverage

Granholm told a joint House-Senate Appropriations Committee that her budget decisions were based on input from Michigan citizens gathered during a three-week tour around the state.

"As I have said many times on this budget tour, and as you have undoubtedly explained to your constituents, the problem that we face in Michigan today is one that any family in the state can understand: you simply cannot spend more than you make month after month, year after year, without digging a deep hole for yourself," Granholm told lawmakers. "But that's what has happened and together we're going to fix it."

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