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Senate Appropriations Subcommittee on Higher Education

The Honorable Tony Stamas, Chair
March 1, 2010
Dr. Wong's Response to Senate questions

Dear Senator Stamas and Subcommittee Members,

Thank you for this opportunity to share Northern Michigan University's responses to the subcommittee's questions. Given today's economic turmoil and our continuing need to serve our students, the challenges today are difficult ones. At Northern, access to an affordable, high-quality university education is our mantra and it guides many of the difficult decisions we have been making for eight years now.

What follows are the responses to your six questions. If you need further information on any particular point, please do not hesitate to contact me.

Question 1: What are your plans for changes in tuition and fee rates for academic year 2010-11?

Northern Michigan University continues to be the second-most affordable public university among the 15 public universities in Michigan.

Forty-four percent of NMU's general fund budget comes from the State of Michigan. However, in the context of the total operational budget of the university, state appropriations provide just under 27 percent. With that in mind, it is unlikely that the NMU Board of Trustees - which sets tuition and fees at Northern as each governing board does at all of the public universities - will make any tuition rate decisions without knowing NMU's state appropriation figure.  State appropriation makes up a third to two-fifths of our funding. More and more, public higher education is tuition dependent as state support wanes. The decisions to be made by the Legislature and Governor will determine how the NMU Board of Trustees addresses tuition-setting decisions for 2010-11.

It is important for legislators to realize that NMU holds its second-most affordable tuition despite providing students with one of the most comprehensive technology packages (including a notebook computer) in the nation. Statistically, NMU has one of the most productive faculty, staff and administrations in Michigan. We are a lean university that has dealt with the eight consecutive years of flat or decreased state appropriations by vigorously reducing, eliminating and reallocating in every corner of our campus - all while doing our best to protect the quality of the NMU academic experience. As a university community, we have worked exceptionally hard to keep our costs low and our quality high for our students.

Question 2:  What do you think about the Governor's proposal to convert the Promise Grant to a refundable income tax credit? Can you provide the following information about the 2008-09 and 2009-10 Promise Grant students on your campus:

NMU's main concern is the loss of scholarship funding while a student is trying to pay for college. If this proposal is passed, any Promise funding would not be available to students until after they have finished with their degree programs and only if they find employment and stay in Michigan. NMU understands it from a cost-savings perspective for the state, but it does not help the students when they need it most, which is when they are attending the university.

  1. What was the total number of Promise Grant recipients in academic year 2008-09? How many students do you estimate were eligible to receive Promise Grants in 2009-10?

    In academic year 2008-09, 1,164 students at NMU received Promise Grants.  In academic year 2009-10, projections showed 1,201 students would have been eligible to receive Promise Grants.

  2. Of the students who were eligible to receive a grant in 2009-10, how many were "front-end" award earners and how many were "back-end" award earners?

    Of the 1,201 students eligible in 2009-10, there were 919 potential "front-end" award recipients of $1,000 and 282 "back-end" award recipients of either $2,000 or $4,000.

  3. Do you have an estimate of the financial need of your Promise Grant recipients?

    Approximately 33% of our 2009-10 "front-end" award eligible students were also Pell eligible.

Question 3: What do you think about the Governor's proposal to modify the Tuition Incentive program (TIP) by capping reimbursement and targeting associate degree attainment 

If the TIP "Phase II" portion is removed, thereby removing assistance for students in the third and fourth year of a four-year degree program, 63 students at NMU would lose $49,500 based on FY10 data.  Based on our FY10 data, there are approximately 300 students who receive TIP funds. If the state moves from paying the "lower division tuition" at the university to paying the "average community college in-district per credit tuition rate," this would result in a reduction in student aid of upward of $1.5 million for NMU students, depending on the rate the state determines is average. 

Question 4: How did your university spend the Federal stimulus dollars it received in fiscal year 2009-10?

Northern Michigan University is using the 2009-10 Federal stimulus dollars to provide a tuition credit to Michigan undergraduate students on their fall 2010 billing. We estimate that the amount will be just under $200 per student.

Question 5: How does your university provide custodial and food services on your campus, and what is the estimated annual cost for each service?

Custodial services are provided by university-employed building attendants.  These individuals are responsible for in excess of 3.4 million square feet of campus facilities at an annual cost of approximately $4.7 million dollars.  NMU dining services provides a self-operated auxiliary operation with both á la carte (cash based) and meal plan offerings to students, faculty, staff and the general public, as well as catering services for meetings, conferences and receptions on campus at an annual cost of approximately $10 million. It is important to note that NMU serves as one of the primary conference and banquet facilities in both the county and the Upper Peninsula, so a significant amount of the $10 million figure is related to non-university events that bring in revenue to the university to off-set the cost of dining service operations, which are completely self-liquidating operations.

Question 6: What does your university do to foster economic development and job growth in the State of Michigan? 

Economic studies still suggest that NMU contributes an additional $4-$5 dollars in local economic activity for every $1 in general fund support. In the area of jobs and economic development, we have  formed the Center of Resources for Enterprises (CORE) to match expertise at NMU with entrepreneurs and businesses/organization seeking to start, strengthen or grow their operations. We also offer an Entrepreneurial Academy for students and the public. NMU expects to significantly drive the U.P. economy to prosperity by:

  • Serving as a central data depository for all research on the economy and business climate in the U.P. and associated regions.

  • Supporting the extensive rural network of Upper Peninsula communities by assisting local units of government to cope with dwindling resources and by assisting in private sector economic development.

  • Assisting sustainability efforts U.P. wide. The Upper Peninsula contains natural resources that are essential to the economic vitality of the state and nation. These include minerals, iron, nickel, timber, fisheries and water.  These natural resources must be preserved and developed responsibly. Our ability to sustain these resources depends on the sustainability of the widely dispersed and small communities prevalent in our region. NMU anticipates playing an even greater role in this in the future.

  • Developing e-government expertise, creating GIS-based analysis for local governments, transferring technology and providing economic education and entrepreneurial training.

  • Directing participants in our student community service operations (for example, through our nationally recognized Superior Edge Program, to engage with communities through internships and volunteering; providing faculty/staff expertise; collaborating with our regional Indigenous tribes; offering workforce training; and delivering economics education to Upper Peninsula schools.

  • Sharing NMU's expertise in technology. NMU is a technology driver in the Upper Peninsula, especially the central U.P.  We hold one of the few next generation wireless licenses - known as WiMAX - in the country. We have extended high-speed wireless service beyond campus, working with central U.P. cities and townships to create a high-tech community, not just a high-tech campus. Our services cover about 40 square miles from Harvey into Ishpeming, enabling police, state patrol and fire personnel to have on-site and mobile laptop access, saving these public institutions money while bringing their services to higher safety and security standards.  NMU is also working diligently to bring public schools into the network. One district, we're proud to say, will have high-speed wireless broadband service for the first time. Current FCC rules do not allow us to provide this service to the general public.

  • Supporting job training and workforce development programs. NMU provides the community college function for this region. Along with one-year certificate and two-year associate degree programs, NMU offers  a variety of job-readiness programs for the under- and unemployed. These range from welding, HVAC and airplane maintenance to energy-related jobs.

Last but not least, our most significant challenge regarding economic development is sustaining our creative momentum. The NMU community prides itself on being smart with our money, collaborating with local government and private entities and assisting non-profit providers in these tough times. We recognize our responsibility to the public to sustain its confidence in us as a public institution. 


Dr. Les Wong
NMU President

C: Ms. Ellen Jeffries

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