MARQUETTE – Based on their initial analysis of the recently passed higher education budget bill, Northern Michigan University administrators are likely to absorb a one-time loss in state restoration funding rather than rebate a mid-year tuition increase. They say the latter option would have an adverse, long-term impact on Northern’s base budget.

Administrators have begun discussing their preliminary strategy with NMU students, emphasizing that no final decision has been made. Still, they indicated that they are “strongly leaning toward” the one-time $700,000 funding hit, barring any revisions to their interpretation of the nuances of the higher education bill. The governor’s signature is also required before it becomes law.

“Obviously we would like to qualify for the additional restoration funding, but not at the expense of our base budget,” said NMU President Les Wong. “A hit to the base has a more significant and long-term impact because every operational budget on campus would have to be revised downward from this point forward. Because the $700,000 is one-time money, our base budget would remain intact so departmental budgets would not have to be reduced.”

The loss in restoration funding would have a net impact of $80,000 because the other option is to rebate resident undergraduate students for the winter semester tuition increase, at a cost of $620,000.

Wong said that dollar figure does not factor in administrative costs associated with the complicated process of distributing rebates to students who qualify – some of whom have graduated and moved on – and possibly recalculating current students’ financial aid packages. The total funding impact of the rebate option is about $540,000 more than absorbing the one-time loss in restoration funding.

Wong briefed students on the factors that combined to create the current situation. The state had previously approved a 3 percent restoration of the 5 percent cut from each public universityÂ’s appropriation through a December executive order. It was based on the

conditions that schools keep their tuition and fee increases at or below the Detroit Consumer Price Index and not implement a tuition increase after Dec. 1.

NMU enacted its mid-year increase before the tuition restraint language was signed into law. Even though it still had the third-lowest total tuition increase for 2003-04 among Michigan’s public universities, the timing issue made Northern eligible for half – 1.5 percent or $700,000 – of the restoration amount. The only way for NMU to receive the full 3 percent, or $1.4 million, would be through a rebate, which administrators said isn’t likely.

NorthernÂ’s 2.4 percent tuition increase for fall 2004 is below the 2.8 cap approved last week by the legislative panel, but Wong said the university is not at this time considering raising it the additional 0.4 percent allowed.

NMU is awaiting clarification on the higher education billÂ’s language and a review of its strategy by the board of trustees. The university must notify the state of its final decision related to the restoration funding and rebate by Oct. 1.

Prepared By
Kristi Evans
News Director