University of Michigan board rejects budgets, tuition hike

Kim Kozlowski
The Detroit News

A stunning no vote from regents on the University of Michigan's proposed tuition hike Thursday cast the university and its students into financial uncertainty as officials plan to reopen its three campuses in less than two months amid a pandemic.

The rejection came after UM officials presented budgets that included tuition increases of 1.9% for students enrolled at the Ann Arbor and Dearborn campuses, and 3.9% at the Flint campus. Though UM President Mark Schlissel spoke twice to lobby the Board of Regents to approve the budget, members deadlocked on the proposal, 4-4.

The vote was the first time in recent history that UM's governing board turned down a tuition increase recommended by the administration, and it means the university will not have a budget in place on July 1, the start of its fiscal year. 

It also means there is more time for advocates of a hike to lobby for a more palatable budget for opponents of Thursday's proposed increases, such as Regent Denise Ilitch, who called the administration's request in the middle of the COVID-19 pandemic "tone-deaf."

It's unclear what tuition rate University of Michigan students will pay this fall.

"For at least the last 40 years, the Board of Regents has voted to increase tuition because the university has tremendous pricing power, that the value of a UM degree is so high and the demand for admission is so strong, that any increase is possible ...," Ilitch said. "That paradigm has shifted this year, and it is incumbent upon us to acknowledge that shift. The value proposition isn't the same this year."

Several other universities, including Michigan State, Wayne State, Saginaw Valley, Western Michigan and Oakland University, have frozen tuition for the coming academic year, though Eastern Michigan approved a 2.9% hike last week

Last year, UM increased tuition 1.9% to $15,558 for in-state undergraduates on the Ann Arbor campus.

Ilitch said UM will do its best to make a meaningful year for students, but it will not be the same. She noted students' spring and summer classes were remote at full tuition cost.  

"The fall, if we are even to complete the semester, will be a semester with a very high percentage of the educational experience being remote, and many experiences and services compromised," said Ilitch, who later was approved as the board's next chair.

"Given these inescapable facts, a tuition cut would actually be in order. But in any event, raising tuition 1.9% is tone-deaf."

Beside Ilitch, the three other regents who voted against the budgets were Jordan Acker, Paul Brown and Shauna Ryder-Diggs.

Before the vote, Schlissel said he has asked the board for investments necessary to maintain academic excellence during typical years at UM.  But this year, he said, is far from typical, due to a global pandemic and a steep economic downturn.

 "It's our responsibility to make sure we steward the university ... and to make sure we have the money to invest to keep kids in school so this doesn't become a lost generation," Schlissel said.

He told university officials to come back with another budget for the board's meeting next month, which is scheduled for July 16.

Having a budget in place by the beginning of a fiscal year is important for financial planning, said Daniel Hurley, CEO of the Michigan Association of State Universities. But at this time, with all the uncertainty around COVID, delaying adoption of a budget could be a good thing, Hurley added.

He pointed to Western Michigan University, which on Thursday delayed adoption of its 2020-21 budget until September.

"(UM) will be better positioned to put forward a spending plan weeks from now," Hurley said. "There are so many unknowns."

Amytess Girgis, a 20-year-old rising senior at UM, said she watched the regents' virtual meeting with low expectations but came away thrilled that the budgets, and proposed tuition increases, did not pass.

Still, even if UM eventually freezes tuition, she won't be content. 

But it was not enough to say she will be content if the budgets get revamped with no tuition increase. Girgis and the grassroots group One University campaign want to see more funding to support UM's Flint and Dearborn campuses.

High among the group's priorities: Getting a Go Blue Guarantee program at the two satellite campuses. The program offers four years of free undergraduate tuition to qualified, in-state students on the Ann Arbor campus whose families earn $65,000 annually or less.

"There are a lot more conversations to be had between now and the July vote," Girgis said.

More:Michigan athletic department faces $26.1M budget deficit for 2020-21

In other news, the regents approved a resolution calling for the university to remain neutral in union organizing drives, allow a “card check” to certify bargaining units instead of secret ballots, and requiring both sides to jointly communicate agreements to potential members.

The vote was 6-1, with Ron Weiser the lone dissenter. Katherine White left the meeting and did not vote.

"I support neutrality, but feel there has not been public input," Weiser said. He proposed an amendment but no one seconded it.

Acker explained his vote this way: "Neutrality is a strong way forward."