A key component of Michigan’s education system, Michigan’s 28 community colleges provide over 411,700 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 2016 recommends total funding of $393.8 million, of which $137.1 million is general fund. The recommendation for fiscal year 2017 is $400.7 million, of which $137.1 million is general fund.
Highlights of Governor’s Budget Recommendation
• Community colleges receive an increase of 8 percent in total funding over fiscal year 2015. Since fiscal year 2011, combined operations and retirement funding for community colleges has increased by $86.8 million, an increase of almost 30 percent.
• This proposed budget includes a 1.4 percent inflationary increase of $4.3 million in community college operations funding, which brings total operations funding to $311.5 million. The increase is distributed through a modified version of the existing funding formula, providing long-term planning stability to community colleges. The formula distributes half of new funding as an across-the board increase. The other half of new funding is distributed based on the following performance metrics: weighted degree and certificate completions, enrollment, and administrative costs as a percentage of core expenditures. 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.
• Funding for Independent Part-Time Student Grants is recommended at $6 million, representing the first time since fiscal year 2009 that the program has been funded. This student financial aid program, based on financial need, targets part-time adult students at community colleges. The governor encourages community colleges to use this funding to re-enroll former students who may have dropped out without earning a degree or other credential.
• As part of recent reforms in the Michigan Public School Employees Retirement System, the community college contribution rate for unfunded accrued liabilities is capped at the fiscal year 2012 level. The state pays the amount over the cap. The budget increases the state’s payments for retirement liabilities by $17.2 million, bringing the total state support for the community colleges’ retirement obligations to $71.2 million in fiscal year 2016. The fiscal year 2017 budget assumes an additional increase of $6.9 million, for a total of $78.1 million.
• The budget increases funding for Renaissance Zone reimbursements by $1.6 million to a total of $5.1 million to continue making statutorily-required payments at the full amount.
• State Building Authority rent payments of $29.5 million, all general fund, support debt service for recently constructed community college building projects.