U-M budget helps state economy

U-M budget helps state economy
Monday, July 6, 2009
The Detroit News Commentary

U-M budget helps state economy

by Andrea Fischer Newman

In recent months, we've watched in dismay as some of Michigan's most stable and venerable businesses have downsized or failed. Our state's economic tsunami has swelled unemployment rolls and devastated communities from Lake Erie to Lake Superior.

At a time when Michigan has the highest unemployment of all 50 states -- 14.1 percent in June and rising -- the University of Michigan offers hope. The university is one of the state's largest and most respected employers and one of the few employers in the state to avoid large-scale layoffs.

On June 18, the majority of my colleagues on the U-M Board of Regents and I approved a $1.46 billion general fund budget for next year that supports the university's academic mission and will help protect Michigan jobs.

About 9,000 faculty members and other instructional staff work on U-M's Ann Arbor, Dearborn and Flint campuses. Another 29,000 U-M employees hold union and white-collar jobs. They drive buses, prepare and serve food, clean and maintain buildings, mow lawns and plow snow. They also work in the skilled trades and as secretaries, police officers, accountants, investment managers, lawyers, pharmacists, computer programmers, graphic designers, photographers, editors, researchers and therapists, to name a few.

University jobs create a positive ripple effect, generating jobs for thousands of other state residents. U-M employees eat at restaurants, buy groceries and shoes, pay taxes and volunteer in their communities. According to a 2003 study of the U-M's economic impact on the state, 2.5 jobs are created for every U-M job.

As a regent, I have been struck on numerous occasions by the dedication and productivity of university employees. Over the past six years, the number of U-M students has grown more than 5 percent. At the same time, research volume has increased 17 percent while the total number of full-time equivalent employees supported by the general fund has grown by less than 1 percent. The general fund pays for teaching, services and administrative support for the university's academic operations.

Between the 2003 and 2008 fiscal years, the Consumer Price Index grew at an annual rate of 3.1 percent. During the same period, U-M's general fund expenditures [net of financial aid] per student credit hour grew at an annual rate of 2.1 percent and, overall, student credit hours delivered per faculty/staff full-time equivalent grew 5.3 percent.

Because of faculty members' ability to attract research support, U-M consistently ranks among the nation's top five research universities, based on research and development expenditure statistics compiled by the National Science Foundation. In 2008 alone, U-M received $25 million in revenue from technology transfer activities.

The university and the state cannot afford to lose talent. Due to the difficult financial situation the state and U-M are in, President Mary Sue Coleman has requested that she receive no merit salary increase from the Board of Regents in the 2010 fiscal year. In addition, her leadership team of executive officers, and U-M's 19 deans will forgo any merit salary increases in the next fiscal year.

U-M's excellent faculty members, working in a broad range of disciplines from paleontology to business and engineering, attract top students. Our students help stoke the state's economy, initially as consumers: They spend an estimated $450 million each year. We hope that many of these young people will stay and create new companies that will lead to even more jobs.

The U-M's 2010 general fund budget will help retain jobs at the U-M and in our state, and preserve our ability to lay the groundwork for a new economy.

Andrea Fischer Newman is a member of the University of Michigan Board of Regents.

Posted on Monday, July 06, 2009 (Archive on Tuesday, September 01, 2009)
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