Category Archives: Budget

Michigan budget approved with increase for Extension

Last week, Gov. Rick Snyder signed the state budget for Michigan for fiscal year 2016, which begins Oct. 1. As we had hoped, the budget included a 1.5 percent increase for Michigan State University Extension and AgBioResearch.

This modest increase is a big vote of confidence from the Legislature and the governor. This is the fourth year in a row we have seen an increase, after the 15 percent decrease in the 2011-12 budget year. We have not fully recouped that loss, but now that we are seeing consistent increases in our funding line, we can be confident that our stakeholders are really seeing our impact.

Now is a good time to let stakeholders who have supported our funding know how much we appreciate their efforts. Be sure to thank them for their dedication to our programs and the residents of Michigan.

Equally important, I want to thank each of you for continuing to deliver high-quality programming and conducting timely research that has a positive effect on Michigan’s families, farmers, businesses and communities. Without you, we wouldn’t have such strong stakeholder support.

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Congress action and inaction affects our budget

News about funding uncertainties isn’t really new to those of us who’ve worked in MSUE for any part of the past decade. It doesn’t make it easier to wait on pins and needles, but it’s not new territory. We’ve spent the first three months of the federal fiscal year (which began Oct. 1, 2012), waiting for decision makers in Washington to let us know how much funding we’ll have to support our work this year, and though they extended the Farm Bill temporarily, they haven’t come to any concrete decisions.

While not deciding how much funding we have is one challenge, another is the decision that they did make to reduce the funding we had been granted in support of our nutrition programming for families with limited resources (SNAP-ED) by 28 percent for the current fiscal year.

We are working to find ways to minimize the impacts of a 28 percent budget reduction on the people we serve and the staff who serve our clients. That means we are holding off on filling open positions and looking at ways to make the most of funds remaining from last fiscal year and those available from other sources. Inevitably, it may mean we won’t be able to serve as many people as we had planned to serve or to serve them as frequently as we had planned. But we’re going to do our part to live up to our mission and commitments.

That’s the state of things in MSU Extension today. I shared details about how the resolution of the fiscal cliff crisis and the extension of the Farm Bill affects us on our MSUE Update webinar on Monday, Jan. 7. If you missed that, you can review the recording of the webinar.

During the past four years, we have worked hard in MSU Extension to position ourselves for an unpredictable future, anticipating that demands for our services would change and grow while resources from the public sector would likely shrink. The changes we expected have occurred: we still find a great deal of interest in our services, and decision makers and stakeholders are good at identifying new needs that call for our expertise and network of Extension professionals.  At the same time, federal funding has remained flat or declining and unpredictable. State funding was cut 15 percent two years ago after a decade of proposals that ranged from eliminating our state funding to reducing it by 25 to 50 percent.

Amid the turmoil, some stakeholders have expressed concerns about our commitment to the land-grant mission, a mission based on public investment in the provision of educational services and application of research to individuals, families, farms, businesses and communities at the local level. As we have adjusted to reduced funding, we’ve sought to embrace technology, organize ourselves to be smarter, put a premium on programmatic investments at the expense of administrative services, all in order to make sure that we are meeting the ideals of the land-grant mission in a 21st century setting.

MSU Extension staff and faculty members are out in the communities across the state, working to help people improve their lives. We’re doing our best to make sure they have the resources and support they need to get that job done. Regardless of what decision makers do or don’t do, we have a job to get done and we’re going to see that it gets done.

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Our state appropriation for FY 2013 is (nearly) set

I’m still adjusting to the notion of writing articles with this headline in June rather than in September or October. For the second year in a row, the Michigan Legislature has completed the appropriations process for the fiscal year that begins October 1, 2012, by the first week of June. What a welcome change this has been!

 And unlike last year’s budget, in which we received a 15-percent reduction in funding, this time we’re targeted to receive a 3-percent budget increase in state funding. The size of the increase is welcome, but even more important is that it’s an INCREASE and not a DECREASE. It’s been a few years since we’ve been able to say that.

 The Conference Committee for the Omnibus Education Budget completed negotiations on the higher education portion of the budget last Thursday evening (May 31), and the House of Representatives quickly approved the compromise on June 1. The Michigan Senate provided their approval on Tuesday morning, June 5. So now all that remains is for the governor to sign the legislation, and then we will know for certain that our funding for next year will grow by 3 percent. There are some requirements in the legislation that call for us to report on outputs and impacts of our programs, which our new reporting system should help us to fulfill. This is right in line with our goal of providing greater accountability through our redesign process. And the increase is primarily targeted at development of a strategic initiative on growing food and agriculture sectors in the state’s economy, something that cuts across all four of our program institutes.

 As is always the case with a process like this, many people deserve credit and thanks for their roles in achieving this outcome. Within Michigan State University, many of you and other colleagues have helped to tell our story effectively to legislators. I’d like to highlight the role of Dr. Mike Kovacic, director of stakeholder relations for the College of Agriculture and Natural Resources, for his leadership in working with the MSU Governmental Affairs office and with legislative leaders and staff to address the concerns and questions that were raised throughout the process and to keep us all focused on the outcome we achieved. Given that we began the process with an Executive Budget proposal that had no increase for MSU Extension and AgBioResearch, coming out with a 3-percent increase is an outstanding achievement. Mike was our coach and captain in the campaign that produced this outcome. MSU vice president for governmental affairs Mark Burnham and his colleagues David Bertram and Monique Field also provided great assistance and guidance.

 Many legislators also deserve credit for their roles in this process. We especially benefited from Senators Tonya Schuitmaker, Howard Walker, Darwin Booher, Roger Kahn and John Moolenaar, and Representatives Chuck Moss, Al Pscholka and Amanda Price. They and other legislators deserve thanks and appreciation from our stakeholders who spoke out in support of our programs.

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Managing your operating budget

One of the changes that Michigan State University Extension staff members in county offices are facing this year is in how they manage and pay for their operating expenses, including travel costs, purchase of program-related materials, photocopying, cell phone fees and others. On Monday’s biweekly Director’s webinar, Annette Tijerina and Michelle Rodgers explained the process involved in obtaining a purchasing card that is tied to individual operating accounts. We will be providing online training opportunities for use of the purchasing cards and other procedures associated with managing individual operating accounts.

 One online resource is already available, from our Fall Extension Conference recordings. On Thursday, Oct. 20, Linda Huyck and the Finance, Housing and Energy work team provided a training session called “Budgeting (Not) for Dummies” on budget planning that is as relevant for operating accounts as it is for family financial management. I really liked the way Linda set the stage for the webinar by saying that with regards to budgets “you need to know where you’re headed” with your budget. In other words, if you have a fixed amount of money available for your operating account, it is important to prioritize the costs that are most important to cover and to understand the difference between your operating “needs” and operating “wants.” Linda provided an example of a spending plan for family budget management, and I imagine that some individuals may have already developed their versions of a spending plan for their operating accounts. If you have a model you’re willing to share, please share it on my blog.

 One of the unique challenges of a budget such as your operating budget is that it receives funding INTO the account once per year, not once every two weeks or once monthly like a family budget. So it’s not just a matter of planning a monthly budget, but rather a year-long budget, and then tracking it carefully to make sure the funds for “needs” in June are still available in June and the funds aren’t completely spent in January.

 We will have many other tools available to help learn how to manage these accounts, but I thought it was helpful to point to something already available from our colleagues to get started on the planning process.

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Federal budget agreement for 2011 nearly settled

The last-minute agreement between leaders in Congress and President Obama last Friday night avoided a government shutdown and finally settled negotiations on the budget for fiscal year 2011.  Yep, that’s the fiscal year that began Oct. 1.  Although it was good to know they reached an agreement, we didn’t really know the details and how they would affect our budgets until Tuesday this week. And the news was even better on Tuesday.  The core funding for Cooperative Extension that comes from the U.S. Department of Agriculture Budget is authorized under the Smith-Lever Act of 1914, which established the national Cooperative Extension System.

In the budget settlement, Smith-Lever funding for this year is reduced by 1.2%.  That was great news in light of the version that had passed the House of Representatives in late February. In that version, our funding would have been reduced by 10%, which would have forced us to figure out how to reduce our budget by $900,000 with a handful of months left in the fiscal year. Instead, we have a much more manageable reduction to absorb, and we can accomplish that with the changes we’ve been implementing anyway.  Congress still needs to approve the deal, and that is expected to happen today or tomorrow.

Now our attention turns to the budget for FY 2012, and Congress is just getting started on that process. It will likely be as contentious as the FY 2011 budget process.  President Obama released his proposed budget back in February, and in that, the funding for Extension was targeted for a 5% reduction.  Given the politics of the budget, it’s likely the House will begin at 5% or an even larger cut in their proposed budget for FY 2012.  It’s doubtful that Congress and the President will come to agreement soon, and there’s a good chance we may end up in a similar circumstance to this year, with the budget decision put off until after the start of the fiscal year.  We’ll plan conservatively in that case so we aren’t caught with needing to make a significant budget cut well into the new year.

On the state front, the House Higher Education Appropriations Subcommittee passed out their funding bill for 2012 yesterday, and accepted the 15% reduction Gov. Snyder had proposed for MSUE and AgBioResearch funding. They also accepted the combination of MSUE and Michigan AgBioResearch funding into one line. They tweaked the funding for MSU and the other universities, cutting them all by 14% and then distributing the other 1% reduction unevenly among the universities, with universities that have a higher per student appropriation (like MSU, University of Michigan, Wayne State) taking a larger share of the remaining 1% and other universities taking a lower share.  The Senate has not passed out their bill for higher education, but their subcommittee held a hearing yesterday at which MSU President Lou Anna Simon and Farm Bureau President Wayne Wood spoke in support of the combination of the two funding lines into one and announced a summit that will be held this summer to bring representatives of state government, agriculture industries and MSU together to identify key strategic priorities for research, extension and education for production agriculture in the years ahead.  With this in the plans, both presidents encouraged the Senators on the subcommittee to avoid being very specific in their prescription of how the funding should be allocated among the various programs for research and Extension.

There is still a series of votes that will be required before our state appropriation is settled for the next fiscal year, but the early movement of bills like the one from the House subcommittee yesterday is encouraging. Gov. Snyder continues to say he wants the budget settled by June 1, and legislative leaders continue to say they would like that but are more optimistic about getting it done by the end of June. Either circumstance would be a welcome change from the years in which we didn’t know our budgets until after Oct. 1.

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State Budget completed on time!

Today is the last day of the state fiscal year, and the Michigan Legislature has completed action on the funding process for the higher education budget for the year that starts tomorrow. Actually, the Legislature completed their work on the higher education bill on Tuesday this week, and the governor’s office has indicated that she will approve the bill as passed. In the bill, state funding for Michigan State University Extension (MSUE) and the Michigan Agricultural Experiment Station (MAES) will be reduced 2.8 percent from the total support provided for the fiscal year that ends today. There are several positive aspects of this news. First, our budgets were treated the same as those for the state’s 15 publicly supported universities: all are receiving a 2.8 percent reduction in funding. Second, all of the funding for MAES and MSUE is from the state General Fund. In last year’s budget, 44 percent of our funding was slated to come from federal stimulus funds, which added some bureaucratic obstacles to receiving the funds and also shook confidence in what the ongoing level of support for these lines would be. Having our General Fund restored is reassuring. And finally, although it’s hard to ever consider a budget reduction as a good thing, that the reduction is 2.8 percent and not something more severe, like 10 percent or 15 percent that Cooperative Extension programs have experienced in other states in our region, is a positive outcome. With our state’s economy struggling and the structural deficit in the state budget, our programs will continue to be at risk of more severe reductions. But for now, to have a modest reduction of this magnitude while we’re going through our redesign process allows us to better prepare for how we will continue to deliver programs if we face more significant reductions in future years.

 Now is a good time to let those stakeholders who have worked in support of our funding to know how much their support has meant to keeping us intact and to thank them for their dedication to our programs. And ultimately, I want to thank each of you for delivering programs and conducting research while tolerating challenging and uncertain times. Because without those programs and those research findings, we wouldn’t benefit from the kind of support that we have throughout the state from a very diverse group of stakeholders. Thanks!

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State appropriations process back in play

The headlines this week have been encouraging, and they suggest that the Michigan Legislature and Governor Granholm are close to having the state budget resolved for fiscal year 2011 (which begins on October 1). According to news reports, leadership in both houses and the governor’s office have reached agreement on terms that would produce a balanced budget. Several elements of that agreement were approved in one of the legislative chambers yesterday, and conference committees for the various budget bills are now scheduled to meet, beginning with some today (September 9). Little information has been released on the higher education bill, but the target for this bill, that is, the total amount of spending to be appropriated for higher education in the agreement, is the same as what the governor originally proposed in February. The governor proposed no reduction in funding for higher education for FY2011. The details of how those funds are distributed among the multiple lines in the budget are not clear, but I take this as a positive sign that the appropriation for the Michigan Agricultural Experiment Station, Michigan State University Extension and Michigan State University will likely be the same as last year or minimally different at worst. At this point, it appears that there is no difference between the parties with respect to funding for our programs. I will post updates to my blog as they develop.

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Another step in the appropriations process

The state appropriations process is back in action. The House Higher Education Subcommittee met yesterday and passed out their bill for funding the state’s higher education budget for FY 2011. Like the Senate, they voted to restore general fund support for Michigan State University Extension and the Michigan Agricultural Experiment Station to replace the federal stimulus funding in the FY 2010 budget. However, the House subcommittee voted to keep university funding at the FY 2010 level instead of approving the 3.1% cut the Senate approved in March. The budget bill still needs to be approved by the full Appropriations Committee and then the full House. If it remains unchanged from what the subcommittee approved, that will create a point of difference between the two versions of the budget, which will require action by a conference committee to resolve the difference before it’s ready for the Governor’s approval. We’ll keep you posted if there are any significant changes as the bill makes its way through the process.

 Tomorrow the House and Senate Fiscal Agencies will meet with the state Budget Director to update the revenue forecasts for the current fiscal year and for next fiscal year. Some preliminary reports from the fiscal agencies suggest that there may be as much as a $500 million shortfall in revenues in the current fiscal year. And that will likely generate some action to determine how to cover that shortfall with only four and a half months left in the fiscal year. Some insiders have suggested there are “one-time fixes” that can cover the bulk of that shortfall. The forecast for FY 2011 seems to be consistent with the forecast from January, which established the base of funding for the FY 2011 appropriations process.

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Washington Post article lauds Extension programs

Here at Michigan State University Extension, we aren’t the only ones dealing with budget cutbacks. I thought some of you may be interested in a full-page article that ran in the April 1 issue of theWashington Post.” It was included in the Montgomery County “Local Living” section and was titled, “The Extension Service’s Programs Help Local Gardeners Grow.” The article focused primarily on budget cuts affecting the Master Gardener program in Virginia, but it also included a little historical background on Extension and mentioned environmental concerns and the recent emphasis on childhood obesity. Written by gardening columnist, Adrian Higgins, it advocates for a strong Extension presence in cities and suburban areas. His concluding statement is: “Showing new generations how to protect the environment and feed themselves in the crowded city and suburb may be as vital in the 21st century as helping farmers to cultivate the fruited plains in the 19th.” I think he’s right, and this is one of the areas that our new priorities are meant to address. To read the article, click on the following link:

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Senate vote leaves MSU Extension in good standing

A few weeks ago I told you that the Michigan Senate’s higher education appropriations subcommittee had approved a budget that cuts funding for all universities by 3.1 percent, and had opted to treat Michigan State University Extension and the Michigan Agricultural Experiment Station the same as the other institutions. Last week the full Appropriations Committee approved the same budget and on Tuesday this week, the full Senate approved the budget. This differs from Governor Granholm’s proposed budget in that there was no reduction proposed in the Executive Budget.

Next up: the Michigan House of Representatives budget process, which will begin after the legislature returns from their spring break on April 12. Stay tuned.

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