Community Colleges

A key component of the state’s education system, Michigan’s 28 community colleges provide nearly 383,000 students with affordable access to postsecondary education opportunities. These institutions are integral to attaining the governor’s goal of ensuring that at least 60 percent of Michigan residents have high-quality skills training, a degree or other credential by 2025. The governor’s proposed budget for fiscal year 2017 recommends total funding of $399 million, of which $138.6 million is general fund. The recommendation for fiscal year 2018 is $399.5 million, of which $138.6 million is general fund.

Highlights of Governor’s Budget Recommendation

• Community colleges receive an increase of 2.9 percent in total funding over fiscal year 2016. Since fiscal year 2011, combined operations and retirement funding for community colleges has increased by $98 million, an increase of 33 percent.

• This proposed budget includes a 2.4 percent inflationary increase of $7.5 million in community college operations funding, which brings total operations funding to $319 million. The increase is distributed through a modified version of the existing funding formula. The formula distributes 30 percent of new funding as an across-the-board increase. The other 70 percent of new funding is distributed based on the following performance metrics: student contact hours that are weighted based upon increased program costs in health and technology; degrees and certificates with an emphasis on natural sciences, engineering, technology, and health; completion improvement; administrative costs as a percentage of core expenditures; and best practices that enhance local strategic value.

In order to receive this additional funding, community colleges will be required to participate in the Michigan Transfer Wizard, making it easier for students to transfer credits among Michigan institutions.

• The governor’s budget continues to cap the amount of unfunded accrued liability contributions paid by community colleges to the Michigan Public School Employees Retirement System, with the state making payments for amounts over the cap. This requires $3.7 million in new funding and total ongoing funds of $74.9 million in fiscal year 2017. The state funding provides community colleges with a more predictable cost for their retirement payments, facilitating greater long-term planning.

• State Building Authority rent payments of $30.9 million, all general fund, support debt service for recently constructed community college building projects.