Gov. Rick Snyder’s executive budget recommendation released Wednesday calls for an overall 2.5 percent funding increase—$36.5 million—for higher education. The percentage varies from 1.8-3.4 percent among institutions. NMU would receive $46.3 million in operations funding and $1 million in performance funding, a 2.3 percent increase. The tuition cap required for universities to qualify for performance funding is 3.8 percent or $475 per student, whichever is greater. Last year, the governor’s proposed cap was 4.8 percent.

Half of the increase in university operations funding is distributed across the board and half through the current performance formula. The formula is based on these metrics: six-year graduation rates, weighted undergraduate completions in critical skills areas, research expenditures, total completions, administrative costs as a percentage of core expenditures, and the percentage of students receiving Pell Grants.

The executive budget is the first step in the legislative process. NMU President Fritz Erickson and other university presidents will testify later this month before a joint hearing of Senate and House higher education appropriations subcommittees. The Senate and House will then draft their own state budget proposals.

Other higher education elements highlighted in the governor’s FY2018 budget are:

-Continued caps on the amount of unfunded accrued liability contributions paid by the seven member universities of the Michigan Public School Employees Retirement System (MPSERS), including NMU, with the state making payments for amounts over the cap. For fiscal year 2018, the budget assumes a two-year phase-in to lower the assumed investment rate from 8 percent to 7.5 percent, based on long-term market analysis and industry standards. The higher education budget includes a total of $4.4 million for university retirement obligations.

-$11 million in new funding to increase the Michigan Competitive Scholarship and the Michigan Tuition Grant. The additional funding will increase the maximum per-student annual awards to $1,000 for the Michigan Competitive Scholarship and $2,000 for the Michigan Tuition Grant. The awards are projected to support a combined 46,000 students in fiscal year 2018.

-An increase of $5.3 million, for a total of $58.3 million, for the Tuition Incentive Program (TIP), designed to encourage both high school and postsecondary degree completion among Michigan’s very low-income students. The program is projected to support 18,500 students in fiscal year 2018. Beginning in fiscal year 2019, the governor recommends capping TIP reimbursements at public universities to double the average community college in-district tuition rate in an effort to reduce the disparities of award amounts across colleges and universities statewide.