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Michigan Higher Ed Copes with Budget Constraints
U of M Regent Richner
Deals with Budget Cuts
Staff cuts and other efficiencies have allowed the University of Michigan to moderate tuition increases, despite State budget cuts, according to Andrew C. Richner, U of M Regent. Richner spoke at the Eastside Republican Club Forum on February 17, 2004.
“We've been able to make a difference at the margin,” Richner said, referring to the moderating influence of the three Republican members of the Board of Regents. But, he was quick to add, “One more Republican Regent would make a difference.”
He explained that five of the Board's eight members are Democrats, and that every two years, two of the seats stand for election. Because Democrats currently hold both of the seats up for election this year, voters will have a chance in November to change the Board's majority composition.
U of M “Brand”
Comparing the University to a commodity, Richner said, “The U of M 'brand' is recognized throughout the world.” When it comes to creating jobs and a strong Michigan economy, Richner noted that U of M is a significant public asset. With a combined 2003 graduate/undergraduate enrollment of 38,808, “Education is one of the greatest exports from the State,” he said.
He backed this up, citing that the University offers 627 degree programs, is heavily engaged in research, and is the number two recipient of U.S. federal research dollars--$750 million in the most recent year.
Another significant source of revenue for the University, accounting for about one-half of its revenue, is derived from patient care through the University of Michigan Health System, also based in Ann Arbor.
Richner reported that this year, applications for admission are down slightly. He attributed this to the school's decision to adopt an essay requirement, following a recent U.S. Supreme Court ruling. “The admissions process is now more tedious,” he said.
“Keep your fingers crossed,” Richner said, regarding possible U of M participation in any post-season basketball tournament this year. He said that although the school's appeal was successful in lifting the NCAA prohibition, “So far, the team hasn't gotten the message.”
U of M Budget Challenges
Richner said, “U of M faces challenges in terms of State support.” He noted, that although there has been a reduction in revenue for 2004, tuition increases have been restrained. Richner said, “The 6.5% tuition increase was less than the revenue cuts, and less than tuition increases at any other Michigan public university.”
He contrasted his three terms as State Representative with his role as Regent saying, “Now I'm on the receiving end of State appropriations!”
To operate within available revenue, the University has cut 275 regular staff, eliminated 50 faculty positions, and instituted a medical plan co-payment.
In addition to its accountability to the electorate, he acknowledged that market forces are a driver in University decision-making. “We have competition in higher education, unlike K-12,” he noted. “A potential student has a wide choice of public and private schools,” he said.
Regent Andrew Richner's Public Service
Richner has a long career of public service in the Grosse Pointes, Wayne County, and the state of Michigan. He was elected to the Grosse Pointe Park City Council in 1991. In 1992, Richner was elected Wayne County Commissioner and served two terms, representing the five Grosse Pointes, Harper Woods and part of Detroit.
In 1996, he was elected and reelected in 1998 and 2000 to the House of Representatives. After serving three, two-year terms as District 1 State Representative, the Grosse Pointe Park Republican was elected in 2002 in his first statewide race to an eight-year term as member of the University of Michigan Board of Regents.
Education and More Richner Background
Richner graduated with honors from the University of Michigan School of Business Administration and law school. He was contributing editor of the Michigan Law Review.
As an attorney in private practice, Richner has extensive experience in corporate securities and commercial law. Richner is a member of the Michigan, New York and District of Columbia bars and worked in Warsaw, Poland assisting a Polish law firm on government privatization projects and joint ventures.
Richner was born in Detroit and raised on the east side. He is a member of Grosse Pointe Memorial Church. He and his wife, Susan, an MSU graduate and speech pathologist in the Grosse Pointe Public Schools, have two children, Clark, 10; and Emily, 6.  
Latest G.P. Public School Proposal
For Property Tax Increase Examined
During the February 17 ERC Forum, Margot Parker, former Grosse Pointe Park councilwoman, offered her comments on the proposed Grosse Pointe Public School tax increase to finance what the school board terms “medium-sized” projects.
A March 16 special election has been called to seek voter approval of the finance plan, a "sinking fund," that would raise $2.8 million annually for six years. Property taxes would be increased to cover this borrowing, with the funds used for projects such as carpeting, flooring and parking lot resurfacing. >> See GPPS slide show.
Community Group Formed
Parker warned, “When they ask for more money, listen up!” She explained formation of a volunteer citizens' group, Grosse Pointers for Excellence in Education, which is researching school system funding. “Our purpose,” she said, “is to understand public school funding and to share this information with the community.”
Announcing the launch of the group's web site, GP4EE.org, Parker said, “I hope that it will become a useful forum for surfacing ideas from the community, and promote the positive involvement of parents and teachers.”
According to Parker, another activity of the group is the mailing of absentee ballot applications to those who may be away on March 16 or need to use them for other reasons.
Election Timing
She outlined three concerns about the proposed one mill increase in property assessments. First, she questioned the timing of the single issue balloting, “It reduces the opportunity for 'snow birds' and seniors to vote,” she said.
Redundancy
Second, she pointed to what she termed, “redundancy.” In addition to existing millage assessments for general operating expenses, Parker outlined the recent history of school tax increases.
In March 2000, bonds were authorized until 2005 that cost homeowners 1.33 mills to finance technological improvements in the district.
Voters in September 2002 approved an additional millage rate increase of 1.15 mills for 25 years, generating $62 million in bonds for school renovations.
“ Now in 2004 we're being asked for another mill,” Parker said. Finally, she reminded the audience that there likely would be a proposition on the 2005 ballot to renew the technology bond originally authorized in March 2000.
Taxes and Real Estate Value
Third, she expressed concern over the total amount and rate of increase in school taxes, compared to nearby districts. Parker said, ”People will vote with their feet. Some of the strongest real estate competition we face is not Birmingham or Bloomfield Hills, but nearby Macomb County.”
She said, “There are plenty of $500,000 homes going up in Macomb with half the taxes of comparable Grosse Pointe homes.” She said, “The big surprise comes when the present owner, with taxes restrained by Prop A, sells, and the new buyer sees a huge bump. That's a deal breaker.”
Parker noted that with an annual outlay of $108 million, “The Grosse Pointe Public School budget surely offers a number of opportunities to achieve increased efficiency.” She said, “Our teachers need to be well-paid, but who are all of the hired consultants?”
“Regardless of your view,” Parker said, “spread the word that there is an election!”
Parker said, “When we hear of something going on in Washington, we throw up our hands and say 'I'm only one person, what can I do?' When it involves Lansing, we may say the same. But this is a local matter, your voice can really count!”
The Eastside Republican Club Forum is held on the third Tuesday of the month from September through June. Admission is free and the public is always welcome. For more information, contact chairman Ed Joseph at (313) 343-2900.
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