Centralight

higher education? Higher woes for Michigan's fl agging economy has forced the state to further reduce higher education funding, exacerbating a trend public institutions have been seeing for many years. In the early 1980s, CMU received approximately 70 percent of its annual general fund operating budget from the state, with tuition and other funding contributing 30 percent. Today, that fi nancial situation has completely reversed. The state now provides about 26 percent of the CMU general fund operating budget, and tuition and other revenue has become the bulk of the budget. This dramatic shift has forced CMU and all state universities to change the way they set their budgets. CMU has worked hard to increase private funding and external support from the federal government and through foundation grants. The university constantly assesses how to improve and maximize these eff orts in order to limit the reliance on tuition. This year will prove no easier to deal with fi nancially. Since 2006, Michigan has posted the country's highest unemployment rate, currently hovering near 15 percent statewide, with certain counties' rates approaching 20 or even 25 percent. And with high unemployment comes reduced 24 centralight spring '10 state tax revenues. At a Consensus Revenue Estimating Conference in January in Lansing, state budget offi cials predicted the state budget defi cit to be $1.725 billion for fi scal year 2011, which begins in October. Michigan's funding for state university operations for this fi scal year is $1.42 billion, a 3 percent decrease from last year. CMU's portion of those state appropriation dollars is $80 million, nearly a $10 million decrease since 2002. While CMU is the fourth largest of Michigan's 15 public universities, with more than 27,000 students, it receives the third lowest state appropriation per student, nearly $2,000 less per student than the average for students throughout the state. Following Gov. Jennifer Granholm's recent State of the State address and fi scal year 2010-11 budget recommendations, the Senate and House will be making decisions based on the governor's proposals. "No matter how you look at it, with a state budget defi cit of $1.7 billion, budget reductions will have to be made," says CMU Interim President Kathleen M. Wilbur. "Higher education is funded by the state general fund and is one of the most likely areas for cuts." This past fi scal year, higher education funding in Michigan was protected due to the availability of $2.3 million in one-time federal stimulus dollars, which made up for the higher education cuts originally recommended by the governor. The CMU Board of Trustees voted to earmark those funds for fi nancial aid. The money will be used to assist freshmen and transfer students who are Pell Grant eligible and lost the Michigan Promise or Michigan Competitive scholarships. In addition, the stimulus dollars will be used to replace a funding reduction in the Michigan Work Study program and to create an economic hardship fi nancial aid fund for CMU students demonstrating the greatest fi nancial need. In total, CMU spends nearly $30 million annually to support fi nancial aid programs. "While the budgetary challenges of the past 10 years are not going away, CMU's history of responsible fi nancial stewardship gives it a more stable fi nancial situation than many other universities," says Wilbur. "CMU has been carefully and cautiously managed from a fi nancial standpoint for years. So we approach what will be challenging budgetary times from a very strong position." The budget is and has been balanced, she says, and there are reserved funds for areas such as building renovation and capital projects. "While well-managed, the intensity of

• Cover