LANSING, Mich. (Michigan News Source) — Michigan’s two largest universities may have dodged deep budget cuts, but they’ll still have to tighten their belts under a new state spending cap.

In a $2.3 billion higher-education budget approved on October 3, lawmakers spared the University of Michigan and Michigan State University from reductions, instead granting each a 2.7% funding increase—about $7.8 million for U-M and $6.9 million for MSU.

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In fact, all 15 of Michigan’s public universities will see increases ranging from 1.9% to 4.8%, along with a one-time 3% bonus if they hold tuition hikes below 4.5%. MSU hit that ceiling exactly, while U-M kept its in-state tuition rise to 3.4%.

Notably, the new budget adds $12.6 million overall—about a half-percent more than last year—and largely reflects Governor Gretchen Whitmer’s priorities. It does, however, impose a new cap limiting administrative costs to 10% of total salaries, a nod to Republican concerns about university bureaucracy. 

In another new accountability measure, universities must also submit information about their current president as part of annual state reporting.

Attempts by GOP lawmakers to bar funding for diversity, equity, and inclusion programs were dropped in negotiations. At the same time, Whitmer’s Michigan Reconnect program, which offers tuition-free college for adults, lost $10 million in funding, leaving $42 million for the year.