MI Budget Maintains Funds for TBED; Ties Higher Ed Boost to Performance

To continue the momentum surrounding economic gardening, innovation and entrepreneurship efforts that began last year, lawmakers provided level funding and added funds for arts and cultural programs and community-focused workforce initiatives in the FY13 budget. Michigan's higher education institutions will receive a 3 percent increase in funding, which is tied to performance metrics that include R&D expenditures and degree granting in critical skills areas.

The FY13 budget signed into law this week by Gov. Rick Snyder provides $100 million for business attraction and economic gardening and $25 million for innovation and entrepreneurship (the same as last year). Both programs are operated by the Michigan Economic Development Corp (MEDC). A new appropriation of $10 million is included for the Talent Fund for Job Training and Skills Development to address joblessness in distressed cities. The governor had proposed $15 million for the initiative in the executive budget, but later revised his request down to $10 million. Arts and cultural programs will receive a $3.6 million increase for a total $6.15 million. MEDC also will receive $25 million for tourism promotion and $50 million in one-time funding to support the state's film industry.

Lawmakers concurred with the governor's recommendation to increase funding for universities and community colleges by 3 percent based on performance measures. However, a recent article in The Chronicle of Higher Education points out that higher education was cut by 14 percent in the previous fiscal year. The deal also includes a tuition cap of 4 percent and requires universities to participate in the Michigan Transfer Network. Increased funding will be distributed to individual institutions based on the following criteria:

• Number of undergraduate degrees awarded in critical skills areas;
• Performance comparisons versus national peers for six-year graduation rate, total degree completions and institutional support as a percentage of core expenditures; and
• R&D expenditures.

A controversial provision that requires universities conducting embryonic stem cell research to report information regarding stem cell lines to the Department of Community Health was included in the final budget. The provision will not be tied to the universities' funding as included in previous versions of the budget bill, however.

Last month the governor signed a bill that he says will streamline the 21st Century Jobs Fund and reduces administrative costs. SB 929 (Public Act 145) provides flexibility in selecting projects to receive funds from the 21st Century Jobs Fund and brings municipalities into the decision-making process.

The bills that make up the $49 billion FY13 spending plan include Public Act 200, the omnibus budget bill, and Public Act 201, the education budget. Both are available at: http://www.legislature.mi.gov.