Michigan is the eighth most populous state in the country, with
9.5 million residents. While the state is not projected to experience
the high levels of population growth that many of the southern
and western states are expected to face over the next decade,
Michigan will face a changing demographic mix, with increasing
numbers of minorities in the major population centers, and with
a growing population in the western region. African-Americans
make up the largest minority group in the state (14.5 percent
of the state population) and their share of the population is
expected to grow to almost 20 percent by the year 2020. Whites,
who compose about 83 percent of the state's population now, are
expected to constitute about 77 percent of the population in 2020.
In 1995, approximately 41 percent of Michigan's population resided
in its three largest counties: Wayne, Oakland and Macomb, which
encompass the Detroit metropolitan area and its immediate suburbs.
This concentration is expected to change somewhat, since the population
growth is projected for the western part of the state rather than
the Detroit area.
Of the states in this study, Michigan has the lowest percentage
of its population that is non-Anglo (see Table 1). It has a low
percentage of families who do not speak English in the home, and
its high school dropout rate is also relatively low. The state
is below average compared to other case study states in terms
of educational attainment. Michigan is about average among the
study states in terms of its per capita income, as well as the
percentage of its families living in poverty.
Contextual Variables for Michigan Compared to Selected States (Numbers in Parentheses Represent Rank Among the Seven Study States) |
||||
(1-2) |
(3-5) |
(6-7) |
Average |
|
| Population (in Millions) (1995) | ||||
| Per Capita Income (in Thousands) (1995) | ||||
| Potential Tax Revenue (1995-96)** | ||||
| New High School Graduates per 1,000 Population (1995-96)* | ||||
| Role of Private Higher Education§ | ||||
| Role of Governor? | ||||
| % of Population with Associate Degree (1990) | ||||
| % of Population with Baccalaureate Degree (1990) | ||||
| % of Population with Graduate or Professional Degree (1990) | ||||
| % of Population 24 Years Old or Younger (1995) | ||||
| % of Population that is Anglo (1990) | ||||
| % of Population Who Do Not Speak English in Home (1990) | ||||
| % of Population in Poverty (1994) | ||||
| High School Dropout Rate (1992 to 1994 Average) | ||||
| * This figure is expressed as an Index: National Average = 100.
Sources: Unless otherwise noted, data are drawn from Chronicle of Higher Education Almanac 43, no. 1 (September 1996), pp. 67-68. |
||||
For many years, Michigan's economy was dominated by the American
automobile industry. One reason for the relatively low educational
attainment levels among Michigan's population (Michigan ranks
last among the study states in terms of the percentage of the
population with a baccalaureate degree) is that the auto industry
historically supplied high-wage jobs that did not require education
beyond high school. As a result, many Michigan residents went
directly from high school to the factories, earning higher wages
immediately after high school than their counterparts did after
earning bachelor's degrees.
The economy has changed, however, and with it the need for higher
education. Downsizing in the automobile industry has led to a
shift in the state's economic emphasis. Service jobs now outnumber
manufacturing jobs in the state for the first time in history.
This shift to a more service-oriented economy has brought a drop
in measures of wealth. In the late 1970s, Michigan's per capita
income was about eight percent higher than the national average;
in 1993, per capita income was two percent below the national
average.
Beginning in 1987, Michigan's economy experienced a significant
slowdown, from which it has only recently begun to recover. The
state's fiscal problems were tied to the downsizing in the automobile
industry, and possibly exacerbated by the gradual phase-out of
a state income tax increase (enacted in 1983). The state tax structure
had historically been dominated by property taxes but recent changes
will make the property tax burden lower and the sales tax burden
higher.
The state budget is divided into three categories: general fund/general
purpose, general fund/special purpose, and special revenue. The
general fund/general purpose portion includes the discretionary
moneys over which the Governor and Legislature have control. Most
of the state's funding appropriated to higher education comes
from this portion of the budget. As a result, higher education
finds itself in direct competition for state dollars with Medicaid
and criminal justice needs-a competition that has recently, according
to one legislator, defined where the big budget battles are.
Michigan has experienced some significant changes in budget priorities
over the past 25 years. From 1968 to 1993, for example, K-12 education
decreased from about 33 percent of the state budget to 20.5 percent,
higher education fell from 11 to 7.4 percent, and social services
increased from 17 to 31 percent. (Note that these figures are
percentages of the total budget: general fund/general purpose,
special purpose, and special revenue.) These budget shifts were
caused by high unemployment, increased federal requirements for
social services, expansive prison construction, and declining
enrollment in elementary and secondary schools. These trends have
reversed somewhat over the past ten years.
Since the state's funding of higher education comes primarily
from the general fund/general purpose (GF/GP) portion of the budget,
it is useful to look at that portion in isolation. Higher education
did fairly well in terms of its share of the overall GF/GP budget
during the 1980s, but its share has declined in the first part
of this decade. In 1980, for example, higher education comprised
about 16.7 percent of the GF/GP budget. In 1989, this share increased
to 19.3 percent, but it returned to 16.7 percent in 1994.
Total dollars, however, have increased during the 1990s. The fiscal
year 1996 budget called for $1.31 billion of general fund revenue
for universities, an increase of 4.7 percent from fiscal year
1995. Community colleges received $253 million in fiscal year
1996, and increase of 2.1 percent over the previous year. Table
2 shows growth in General Fund/General Purpose spending to higher
education from 1990 to 1996; this growth is more than twice the
growth rate for general fund spending overall. Most of the individuals
we interviewed said that higher education had fared fairly well
during the 1990s, and that the fact that overall state support
did not decrease was a positive sign.
General Fund/General Purpose Appropriations To Michigan Higher Education, FY 1990 to FY 1996 (Dollars in Thousands) |
|||
| Public Universities | |||
| Public Community Colleges | |||
| Source: Michigan Department of Management and Budget, "Fiscal Year 1997 Executive Budget" (www.michigan.state.mi.us), not paginated. | |||
Republican Governor John Engler was elected to his first term
in 1990, defeating Democratic incumbent Jim Blanchard by only
17,000 votes. Engler was elected on an agenda to "cut taxes, downsize
government, create jobs, improve Michigan's business climate,
and improve the quality of the public schools." He was reelected
in 1994 with more than 61 percent of the vote, the second largest
margin of victory in Michigan history. Prior to taking over the
Governor's office, Engler had served in the state Legislature
for 20 years, serving as majority leader in the state Senate from
1983 to 1990.
One respondent described the election of Engler as the "first
break in the old power structure." During an earlier era, the
Legislature was seen as all-powerful. With recent shifts in the
control of the Legislature (Republicans now control both houses),
the Governor is in a position to exert much greater political
influence, and has done so.
Constitutionally, Michigan is a strong Governor state, due primarily
to the Governor's budget and line-item veto powers. The Governor
has exercised his veto power with regard to higher education,
as evidenced by his 1995 veto of the appropriation for Highland
Park Community College, an institution in the Detroit area. In
making his veto, the Governor cited financial mismanagement and
declining enrollment. The Governor is seen as the most influential
person for higher education because he introduces the budget,
which becomes the key document used by the Legislature. The Governor
also appoints 10 of the 13 university governing boards in the
state.
Governor Engler has exerted his power in other ways as well. He
has eliminated about 40 to 50 commissions and boards since taking
office; he has also eliminated the public relations offices in
all state agencies, leaving only his own office with a public
relations component. Several interviewees suggested that the Governor
has tried to reduce the influence of elected boards in the state
by moving key programs from agencies with boards to those without
boards. One example can be found in the recent transfer of the
state's financial aid programs from the Department of Education
to the Department of Treasury. In addition, Governor Engler hand-picks
the Republican candidates for the three elected boards in higher
education, the first Governor to develop this practice.
Legislature
Republican control of the House and Senate has meant major changes
in the power structure in the Legislature, and additional changes
are likely to occur over the next several years. The state has
recently enacted a term-limit initiative that will limit terms
of House members to six years and Senators to eight. The Governor
is limited to two four-year terms. Many of our respondents suggested
that term limits will change the system significantly; in the
past, the system relied heavily on people who have progressed
through seniority to positions of greater power, but in the process
have been socialized to a traditional set of values and a way
of doing business. Term limits will change that, but no one knows
for sure what the impact will be.
With regard to higher education, the two most powerful legislative
committees are the Senate Subcommittee on Appropriations for Higher
Education and the House Appropriations Committee. We were told
that the chairs of these two committees are very powerful, and
that much of what happens in terms of funding for higher education
has to do with who holds these two chairmanships. The House and
Senate appropriations committees are said to take a very different
approach to higher education. One senator said that while the
Senate holds congenial hearings on the campuses of institutions,
the House Appropriations Committee tends to "bring presidents
in and browbeat them." A House member said there are many representatives
who would like to be more prescriptive about what higher education
can and cannot do, but the Senate and the more experienced members
of the House would be unlikely to support such efforts.
Both the Senate and the House rely on non-partisan fiscal agencies
for information and analysis on higher education and other public
issues. These agencies have very small staffs, but believe they
have sufficient resources to handle the requests that are received.
The fiscal agencies operate under a requirement of confidentiality:
they cannot reveal anything that a legislator asks them to do.
The Legislature is said to have a fairly good relationship with institutions of higher education. Generally speaking, legislators try to keep everyone "healthy," and no one is out to "kill" an institution.
Affordability was the issue most commonly cited as a "state priority"
by our respondents. Concern over access is directly related to
affordability; while the state does not expect a large increase
in the number of students entering higher education, there is
a great deal of concern about whether the students who want to
attend institutions of higher education will be able to afford
it. Michigan is a high-tuition state that relies increasingly
on student and parent contributions. As tuition has increased,
students and their families are paying a larger share of the cost
of education. Michigan's "tuition factor"-that is, the percentage
of tuition relative to total revenues (state and local appropriations
plus student tuition)-rose from 34.4 percent in 1986 to 44.5 percent
in 1995. The national average for the tuition factor in 1995 was
31.4 percent. Most policy makers and educators acknowledge that
the issue of affordability will have to be addressed if the state
is to continue to provide access to future students.
Another key policy issue that has received a fair amount of public attention is the percentage of out-of-state undergraduates at the University of Michigan. Many legislators-and in particular a previous chair of the House Appropriations Committee-have indicated that the university is doing a disservice to Michigan residents by enrolling too high a percentage of out-of-state students. The legislators have argued that access is unfairly denied to Michigan residents in favor of out-of-state students who bring in significantly higher tuition revenues. (Tuition for non-residents is close to $15,000 per year compared to $5,000 for state residents). University officials have said that the university is becoming less a state university and increasingly a national and international university, and therefore it is appropriate to have a very selective admissions process that admits a large percentage of students from out of the state. Several years ago the Legislature asked that the university take no more than 30 percent of its undergraduate student body from out-of-state. After the university failed to meet this target, the Legislature withheld resources temporarily. The Legislature eventually gave the university the money that was withheld, but the tension over out-of-state enrollment continues.
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