Tag Archives: Funding

Michigan Gov. Rick Snyder presented his proposed state budget for FY 2012 this morning, Feb. 17, 2011. He is attempting to address some challenging conditions while simultaneously positioning the state for economic growth. The result is a complex and wide-ranging proposal. I trust that you know or can find information on the economic backdrop that he is addressing, so I will focus on what we know about how the proposed budget would affect MSU Extension and Michigan AgBioResearch (still named Cooperative Extension Service and the Agricultural Experiment Station in the legislation). 

 Currently MSUE and AgBioResearch are funded as separate lines in the state higher education budget. MSU has yet another funding line in the same budget. The governor’s proposal would make two changes in our funding: 1) it would combine the MSUE and AgBioResearch lines into one funding line, but separate from the MSU funding line; and 2) it would reduce the appropriation for the newly combined line by 15 percent. This is the same level of reduction proposed for all other university lines in the higher education budget. Although I have not seen the actual language of the budget bill, I interpret a comment in the governor’s message to indicate that there will not be a prescription in the budget as to how much of the funding should be used for MSUE and how much should be used for AgBioResearch. He said, “Funding for the Agricultural Experiment Station and the Cooperative Extension Service is reduced by 15 percent and combined into a single appropriation of $52.6 million to give Michigan State University the ability to use the funds more strategically.”

 In addition to these proposed reductions, the governor’s budget would reduce the appropriation for revenue sharing with counties by $51.8 million (34 percent of $150 million).  This is a bit confusing to explain because 64 of Michigan’s 83 counties still operate from their revenue sharing reserve fund established in 2004 legislation. The $150 million appropriation that is proposed for reduction only applies to those 19 counties that have fully returned to revenue sharing appropriations and are no longer funded from the reserve fund. At this time, it would seem that those counties on reserve funds would not experience the 34-percent reduction until such time as their reserve funding expires.

 These reductions would present serious challenges to MSUE, not only in our state funding, but also in our support from county governments. In addition, our federal funding is targeted for a 5-percent reduction in FY 2012 in President Obama’s budget proposal released earlier this week.  As troubling as this is, it is important to acknowledge that we’ve anticipated this and have tried to plan for reductions of this magnitude. Our redesign plan strives to position MSUE to continue to work effectively statewide in key targeted programs. We have anticipated throughout the process that we may face a serious budget reduction, and have challenged ourselves to keep this in mind as we work to adopt new technologies, focus our efforts more intensively, and seek partners from other states, partner organizations and industry to leverage our resources more effectively.

 Much of our funding goes to support staff salaries and benefits. A reduction of this magnitude is only achievable by expanding our funding from other sources, reducing staff size or some combination of both. In 2009, Provost Wilcox challenged the CANR, MSUE and AgBioResearch to reduce their respective budgets by 17 percent over four years. Since January 2009, we have had more than 60 staff members and faculty retire or resign, and we have refrained from filling those positions. We have made other changes in operating costs to position us for reductions like this. We’ve benefited from reduced fringe benefits costs resulting from changes enacted by President Simon’s administration and other administrative improvements. Even with these savings, we anticipate that we would need to make further staff reductions and generate additional funding from sources other than federal, state and county appropriations to adjust to these reductions in funding. We will be working with MSUE institute directors, district coordinators, and Interim Dean Doug Buhler to develop plans for adjusting to further reductions.

 MSU President Lou Anna Simon, Provost Kim Wilcox and Interim Dean Buhler will be involved in helping us develop plans with Steve Pueppke, director of MSU AgBioResearch for how we would manage MSUE and AgBioResearch under a common state appropriation instead of the two funding lines.

 As in previous years, it is important to remember that state funding is determined through a lengthy and complex process. The governor is required to propose a budget to the legislature. The two houses of the legislature take up the legislation, review it, modify it and approve it in some form that may or may not agree with the governor’s proposed budget.  Both houses must agree on the language in the legislation before it goes back to Gov. Snyder for final approval. Over the past few years, this process has taken months to complete. And on several occasions has not been completed until after the beginning of the fiscal year (FY 2012 begins Oct. 1, 2011). Gov. Snyder and legislative leaders have set a goal of having the budget completed and approved by June. So today’s announcement is the first step, and the final step is, at best, three to four months away. That calls for patience and careful planning on our part. 

 At this point, we have not developed a statement for stakeholders who may be interested in or concerned about our funding. When appropriate, we will share that message with you and in turn will ask you to share that with stakeholders.