Business leaders angry over House-approved funding cuts to U-Mich and Wayne State

Business leaders on Monday protested House-passed cuts in funding to the University of Michigan-Ann Arbor and Wayne State University, saying the research schools are key to the state's economic competitiveness.

The Republican-controlled House last week approved a higher education plan that would keep overall operations aid at roughly $1.5 billion but revise how it is split among 15 state universities.  

The Ann Arbor school would see a 12%, or $39.5 million, reduction. Wayne State's funding would drop by 4%, or $8.2 million. Funding would rise 10% for seven universities, including Central, Eastern and Grand Valley. Michigan State -- the state's third research university -- and Western would get a 1% increase, while aid would remain flat for the three Upper Peninsula schools: Michigan Tech, Northern and Lake Superior State.

Mike Jandernoa, chairman of the private equity firm 42 North Partners, said all universities should get more funding in the next fiscal year, adding that gaps in aid between the older research schools and newer universities such as Grand Valley and Oakland should be addressed. He noted an influx of federal COVID-19 funds.

"While I want to see all universities supported well, our top-ranked research universities invest more to train graduates (for) high-demand jobs and deserve to have that reflected in their state funding," Jandernoa, a GOP donor, told reporters in a call organized by the University Research Corridor, an alliance of Michigan State, the University of Michigan and Wayne State. He was joined by Jim Hackett, the former CEO of Ford Motor Co. and Steelcase Inc. who led the University of Michigan athletic department, and Paul Glantz, chairman of Emagine Entertainment.

Rep. Mark Huizenga, a Walker Republican who chairs the House subcommittee that handles higher education budgets, has defended his proposed "radical shift" in the funding formula, saying it would be implemented over three years. The model currently "does not incentivize students from the state of Michigan to attend Michigan institutions," he said in an April 22 legislative hearing, also noting significant disparities in aid to schools when viewed on a per-student basis.

About 47% of the 31,000-plus undergrads at Michigan's Ann Arbor campus were from out of state in the fall of 2019. It is among the top-ranked public universities in the nation.

Hackett said the number of students paying out-of-state tuition helps keep costs down for those paying in-state tuition.

The fate of the House proposal is unclear as legislative budget negotiations ramp up. Both the Republican-led Senate and Democratic Gov. Gretchen Whitmer have backed a 2% funding boost for all universities.