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Updated 11:00 AM November 24, 2003



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Coleman and Courant to state: Maintain current levels of funding

Saying the University has trimmed its budget aggressively and dramatically despite cost and enrollment increases, President Mary Sue Coleman and Provost Paul N. Courant have asked the state of Michigan to fund U-M in fiscal year 2005 at the same level it appropriated in 2004.

In making the annual appeal for state funding, Coleman noted that the $327 million request, which is equal to what the University received in 1999 and 10 percent less than the 2002 appropriation, must be maintained in order to prevent a negative impact on academic programs and the already weakened state economy.

"We recognize that making a substantial request of the state is not possible, even with the increasing demands that we face, and are willing to share in the belt-tightening," Coleman said. "If the state further reduces university funding in FY 2005, we have grave concerns that some elements of a Michigan education, as well as our ability to contribute to economic growth in advanced manufacturing, the life sciences and information technology, are at risk."

In the face of a $36.4 million cut from the state last year, the University eliminated 300 positions, put several faculty and staff searches on hold, eliminated some class sections and increased enrollments in others, Courant said when highlighting the appropriations request for the Board of Regents Nov. 20. The University cut costs while holding its tuition increase to 6.5 percent and increasing financial aid, he said.

"To put that in perspective, the base cut that we have already absorbed is almost $1,000 per student," Courant said. "We have cut operational costs and increased efficiency. We have reorganized and streamlined operations in major units, including the libraries and Human Resources, and we have introduced electronic business processes to replace more expensive manual transactions.

"The next round of cuts threaten to cut into our core academic activities, something we have worked very hard to protect up to this point," he said. "We will continue to do all that we can to maintain the quality of our students' educational experience under these circumstances, but there are no easy answers."

Courant said the University has experienced increases in health insurance costs, a trend that is expected to continue, even though the University is looking at a plan that would have employees share more of their premium costs.

"Right now we are considering a cost-sharing model for health care premiums that will trim $6 million from the general fund from the University's health care contribution, but, of course, we know that even as we move to implement that model, we will still see the institution's health benefit costs increase substantially," he said.

Increased security and safety costs due to recent national and international events; additional federal procedures required for international studies; increasing demand for technology improvements; and the life sciences and undergraduate initiatives all are "essential to the success of our students and of great value to the state's economy," Coleman said.

"We recognize that there will be many competing demands for the state's resources, and difficult choices must be made," Coleman wrote in the budget request. "However, no activity is more critical to our state future than the development of its human capital, and the state-supported university system, including the University of Michigan, is vital to that task."

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