University Budget Transparency vs. Secret 'Appropriations Mud Pit'

Columnist Tim Skubick doesn’t like term limits, and a recent column suggests he also may not appreciate lawmaker attempts to openly rein in the bloated spending habits of Michigan’s government universities:

Here’s where terms [sic] limits fits in. Years ago university honchos and house budget writers had what’s called a relationship. Sure, they had their disagreements, but an unseemly public back and forth, such as this, would have been worked out in the back room, not center stage.

Term limits prevent that because none of the lawmakers have been around long enough to mold that bond of trust.

Mr. Skubick is correct that such backroom deals were how higher education funding was done in the past. Here’s how I described the process in a 2006 Detroit News Op-Ed: “Currently, each university’s state funding is determined by what amounts to legislative mud-wrestling. The colleges send their lobbyists into the appropriations pit, and each battles for a bigger piece of the pie.”

What Skubick left out was the unseemly outcome of this secret political class deal-making. I gave some details in the academic paper on which that Detroit News piece was based:

For example, it is not a coincidence that for many years Rep. Dominic Jacobetti of Negaunee in the Upper Peninsula dominated the pre-term limits appropriations process, and the fact that Northern Michigan University in Marquette receives from 22 percent to 106 percent more than every other “non-research” university, except for Michigan Tech, another school in the western Upper Peninsula. Similarly, while Sen. Joe Schwartz chaired the Senate Higher Education Appropriations subcommittee, his alma mater the University of Michigan did very well in garnering an outsized proportion of the budget. When the Detroit legislative delegation had more clout than it does today, and Rep. Morris Hood of Detroit chaired the House Higher Education Appropriations subcommittee, Wayne State saw its funding boosted. 

That paper and article proposed replacing these perverse outcomes with a system in which a fixed amount of state money follows the student, increasing the incentives for universities to contain costs and increase value by making them compete in the marketplace rather than the appropriations mud pit.

Incidentally, this concept recently got support from an unlikely source: a proposal by Democratic legislators to pay the college tuition of every Michigan student. My colleague Michael Van Beek, director of education policy at the Mackinac Center, explained the flaws in that part of the measure, but also praised some other aspects:

There are two redeeming characteristics of the Michigan2020 plan. Its estimated $1.8 billion price tag would apparently be paid for by cutting "corporate welfare" by 10 percent, and it essentially "voucherizes" state funding of higher education. Mackinac Center analysts have long-supported these two policies, as they reduce the unfair competitive advantage politically favored businesses and public universities enjoy through discriminatory tax breaks and appropriations-based funding.