Committee adopts higher‑education package that shifts large one‑time scholarship deposits and creates campus investment fund tied to tuition restraints

The House Appropriations Committee reported the H‑1 substitute to House Bill 45 80, the higher education appropriations bill, adopting a package that retools university funding by placing large one‑time deposits into scholarship funds, creating a campus investment fund, and attaching tuition restraints and policy limitations.

House Fiscal staff described the proposal as a major fund shift that substitutes a large one‑time School Aid Fund deposit for prior general fund university operations. Analysts said the bill removes approximately $1.65 billion in ongoing general‑fund operation grants provided in fiscal year 2025 and replaces those with a mix of restricted School Aid Fund one‑time deposits and a new campus investment fund. The campus investment fund was described as an $828.1 million gross appropriation limited to infrastructure, technology, equipment, maintenance, safety and capital debt reduction; distributions would be based on fiscal‑year‑2024 resident full‑time equated students (FYES) and include endowment‑based adjustments that reduce allocations for institutions with very large endowments (the bill text as reported would reduce allocations by 50% for institutions with endowments $1–5 billion, 65% for $5–10 billion, and 75% for endowments above $10 billion).

The package includes a $1.1 billion one‑time School Aid Fund deposit into a post‑secondary scholarship fund and a $170.6 million general fund deposit to a new post‑secondary scholarship private‑institution fund, with the intention of funding the Michigan Achievement Scholarship (MAS). Under the proposal, MAS eligibility would be broadened: the program would award up to $5,500 to resident students attending a four‑year public or private university and up to $2,750 to students attending community colleges or tribal institutions, and the bill removes income‑based and high‑school graduation‑year eligibility restrictions. House Fiscal said the MAS allocations would be capped at specified totals for public universities, private institutions and community colleges.

The House substitute conditions attainment of certain appropriations on institutions restraining resident undergraduate tuition and fee increases to the greater of 3% or $489. The bill also removes some one‑time operation items and limits university salary, DEI spending and certain institutional activities in boilerplate sections similar to those applied to community colleges.

Members debated the tuition‑cap trigger, the use of School Aid Fund deposits for scholarships, and the practical effect of defining “full‑time” as 15 credits (which may change eligibility counts). Representative Steckloff raised detailed questions about the Michigan Achievement Scholarship estimates for individual institutions; fiscal staff noted MAS estimates used FY24 FYES counts and that actual awards would depend on updated enrollment and credit‑hour definitions.

Several amendment attempts were offered on the floor (including an amendment tying the bill’s effect to passage of a joint resolution on school aid spending, one to protect agricultural research funding, and one on veteran supports); none of the amendment proposals carried. The committee reported the H‑1 substitute to the House by roll call (final report: 16 yays, 13 nays). The bill will proceed to the House floor and interchamber negotiation.