Bill Would Enforce 'Intent' Of Tuition Hike Reform Law

Legislation has been introduced to prevent universities from being treated as if they'd held their tuition hikes at 7.1 percent or lower when they really hadn't.

“Should we say a tuition increase was just 6.9 percent when it was really 9.4 percent?” Rep. Bob Genetski, R-Saugatuck, asked. “I think that's a worthy question.”

Rep. Genetski, chair of the House Appropriations Higher Education Subcommittee, is sponsoring House Bill 4980, a bill to keep Michigan State University and Wayne State University from collecting “Tuition Restraint Incentive” grants.

HB 4980 is what is known as a “negative supplemental appropriations” bill. It would reduce the appropriation to MSU by $18.3 million and WSU by $12.8 million.

As reported previously in Capitol Confidential, MSU students are paying 9.4 percent more for tuition this fall than they paid last year, but MSU argues that technically the increase is just.6.9 percent.

“Tuition Restraint Incentive” grants were created earlier this year by Gov. Rick Snyder and the Legislature in an effort to minimize university tuition increases statewide. Under the program, universities that held their tuition increases below 7.1 percent would qualify for the grants.

However, MSU raised its tuition rates last year but did not charge its students the full amount. When its rates jumped this year, MSU compared the increase against last year's uncharged tuition rate and claimed the increase was just 6.9 percent. Meanwhile, the House Fiscal Agency (HFA) measured the increase against what students actually paid last year and said it was a 9.4 percent hike.

A similar situation occurred with Wayne State University. WSU claims it held its tuition increase below the 7.1 percent mark, while the HFA assessment has pegged the increase at 8.8 percent.

HFA is a nonpartisan agency tasked with helping House members understand the complexities of government finances. More on how the universities and HFA made their calculations are available on the “What's New” HFA website link.

If state officials accept the arguments forwarded by MSU and WSU, the university would qualify for the grants. MSU would get an additional $18.3 million and WSU would get an additional $12.8 million. As the story developed over the summer it appeared that Michigan Budget Director John Nixon was leaning toward giving MSU and WSU the money.

Rep. Genetski admits that he faces an uphill battle in his efforts to prevent MSU and WSU from getting the grants.

“When the budget director has said that the universities technically qualify, I'd say that indicates that the administration is not averse to giving them the grants,” he said.

So why bother introducing the legislation?

“The subcommittee feels that these universities are in violation of the intent of the Legislature when it created the grants,” Rep. Genetski said. “We're convinced that MSU and WSU shouldn't be receiving these grants when their students are suffering under those tuition hikes.”

Rep. Al Pscholka, R-Stevensville, a member of the subcommittee, said he is completely supportive of Rep. Genetski's position in this issue.

“I thought it was a good call when he brought the issue up this summer,” Rep. Pscholka said. “I also thought he did the right thing when he called them (MSU) on the carpet about it at our hearing. They haven't convinced me that they've really followed the intent of the law.”

Rep. Pscholka added that, with more than $30 million at stake, the issue shouldn't be taken lightly.

“To me this is a very serious issue,” he said.

Rep. Fred Durhal, D-Detroit, a member of the House Appropriations Committee, where the bill currently resides, said he thinks the universities should get the money and Rep. Genetski's bill would unfairly deprive MSU and WSU of funding they deserve.

“I think this legislation is a bad move,” he said. “These institutions complied with the law as they understood it. My understanding is that the budget director looked into it and now says that they are in compliance.”

“Why should we penalize these universities?” Rep. Durhal continued. “I think to do so would be uncalled for and punitive. If this legislation were to pass it would just end up hurting the young people who are seeking to further their education.”

HB 4980 also includes language to clarify the definition of a tuition hike. A portion of the key language states:

"A fee means any fee authorized by the board of a public university that will be paid by more than [half] of all resident undergraduate students at least once during their enrollment at the public university. 'Tuition and fee rate' means the average of full-time rates for all undergraduate classes...”