Gov. Releases FY05 Budget Proposal

The FY05 budget proposal released by Gov. Jennifer Granholm Thursday recommends $1.6 billion in total support for universities and financial aid programs, of which $1.54 billion would come from the general fund. It also includes a promise of no additional reductions for universities that exercise tuition restraint and a decrease in state support for those that don’t.

Universities that keep tuition increases for 2004-05 at or below the rate of inflation – about 2.4 percent – would see no further state appropriation reductions. Universities that raise 2004-05 tuition above inflation would have their base funding reduced by 3 percent. Northern's current state appropriation is $44.5 million.

Northern’s board has been meeting at its annual retreat yesterday and today in Ann Arbor. The executive budget is a discussion item on today’s agenda, but because no official university business is conducted at retreats, it is likely the board will convene a special meeting at a later date to gather public input and formally act on the proposal.

Other elements of the proposed budget impacting universities are as follows:

•State support for the tuition grant program for students attending private colleges and universities would be eliminated, saving $65 million.

•The state will subsidize pension contribution rates charged to the seven universities, including NMU, with employees covered under the Michigan Public School Employees Retirement System (MPSERS). The action would result in a total savings of $6.4 million that otherwise would be charged to the institutions.

•Michigan Merit Award funding is recommended at $67 million.

•Funding for the Martin Luther King Jr. – Cesar Chavez – Rosa Parks grants would be continued at the FY04 level.