Michigan Universities Doing Just Fine

And without more taxpayer money

You might get the impression that no one in Michigan values higher education, given the way university funding gets portrayed. A new report from a group called the Young Invincibles gives the state an F for the size of its subsidies to public universities. But the numbers tell a different story.

State and local governments spend more on higher education in Michigan than all but three other services according to the U.S. Census Bureau, trailing only K-12 education and public welfare. But higher education is not funded exclusively with tax dollars — it is also funded with tuition, fees, grants and other support.

Revenues have been growing over time even without additional money from state taxpayers. Total general revenues at state universities increased from $4.18 billion to $5.95 billion from 2006 to 2014, according to state reports. This is a 42 percent increase. Indeed, this is faster growth than seen in the state budget.

As state support dropped from $1.7 billion to $1.3 billion over the period — a 23 percent decrease — revenues from tuition and fees increased from $2.4 billion to $4.2 billion — a 77 percent increase.

Students get something for the extra money that they — or their parents — have provided universities. State higher education institutions are spending more on instruction and support activities. And universities are spending more on financial aid to their own students. This assistance increased from $336 million to $693 million from 2006 to 2014.

Financial aid is part of a strategy many universities use to get more revenue from the people that can afford its tuition while helping others with fewer means to attend the school.

The universities are also turning this additional money into more degrees. Overall, these state institutions awarded 15 percent more bachelor degrees and 10 percent more of other kinds of degrees and certification. (The student population only increased by 3.8 percent over the period.)

In this environment, what do taxpayers get in return for their spending? It doesn’t seem to be much. Michigan public universities are spending more money and pumping out more college graduates without taxpayers putting more money into the system.

As the budget season for Michigan lawmakers begins, residents should question the actual value of the $1.4 billion in state tax money given to these universities in 2015, considering that university revenues and expenditures seem to grow just fine without increased taxpayers support.