GRAND RAPIDS — Michigan needs to spend another $1 billion on higher education to produce graduates with the advanced skills needed for the 21st century economy, contends Business Leaders for Michigan.
But the state also needs to spend more money on early childhood education and on the state’s crumbling infrastructure.
According to statistics provided by the business group, state spending in 2001 accounted for around 50 percent of Michigan university revenues. In the current fiscal year, it accounts for less than 25 percent. At the same time, tuition and fees went from about 45 percent to more than 70 percent of revenue to universities. State spending per college student fell by 35 percent over the past decade, said Doug Rothwell, president and CEO of Business Leaders for Michigan.
In an editorial board meeting with MiBiz, Rothwell said increased state funding would help ease tuition increases at the state’s 15 public four-year universities and take the financial pressure off parents now forced to cover the state’s funding shortfalls.
“We’ve shifted the burden to parents from government,” he said. “We need more kids in the state to get a higher education.”
Higher emphasis should be placed on producing the so-called STEM degrees — science, technology, engineering and mathematics — as well as providing well-rounded educations to produce workers with critical thinking skills. But the state also needs to dedicate at least 1 percent of the K-12 budget on early childhood education, Rothwell said, to better prepare children for grade school.
In the Michigan Turnaround Plan developed by the group in 2009, Michigan has made great progress on the first three pillars, said Business Leaders For Michigan board member and former Perrigo Chairman Michael Jandernoa. Those pillars include “responsibly manage finances,” “effectively and efficiently provide public services,” and “create a competitive business climate.” On the fourth pillar, “strategically invest for future growth,” much work needs to be done, Jandernoa said.
“We’ve got Michigan back in the game,” he said. “Step four is invest in people and infrastructure.”
By 2020, Michigan will need 900,000 workers with more than a high school degree, Rothwell said. While the state has thousands of open, unfilled positions, at least 80 percent of them require a minimum of an associate degree. Those jobs include registered nurses, accountants and auditors, industrial engineers, computer systems analysts, management analysts and more.
Ideally, Rothwell said, the state would add $100 million a year for the next 10 years to higher education funding. Getting this money could come from improving state revenues and reducing expenditures, particularly in the Department of Corrections. Currently the state spends 10 times more to house prisoners each year, $46,000, than it does to help students get a college education, $4,600.
While the current state budget adds $36 million in one-time money to the universities if they show certain results, the money does not provide universities with the ability to plan or restrain tuition costs, Rothwell said. He said Michigan universities are very efficient in comparison to peer institutions, but they have not been able to make up for the massive state cuts.
Another way to add more money to university budgets would be to attract more out-of-state students, Rothwell said. If Michigan universities attracted the same percentage of non-resident students as other states, it would mean an additional $200 million to the universities and statewide as much as another $1 billion in overall spending.
Mike Brennan is Senior Technology Writer at MiBiz. His day job is editor and publisher of MITechNews.com