Program: Michigan merit award board/MEAP administration

 

Appropriation:

Federal Funds:

$10,698,800

 

Special Revenue Funds:

$18,128,500

 

Total:

$28,827,300[3]

Program Description:

This appropriation funds the Michigan merit award board/Michigan Education Assessment Program (MEAP) administration costs.  The MEAP achievement tests high school students and provides those who meet certain standards college scholarship money.

Recommended Action:

There is little reason for the MEAP test and the accompanying scholarship program to be administered by the Department of Treasury.  The program could be returned to the Department of Education and its budget increased likewise.  Transfer: $28,827,300.

Program: Michigan education savings program

 

Appropriation:

All From Special Revenue Funds:

$1,000,000

 

Total:

$1,000,000[4]

Program Description:

This appropriation funds the Michigan Education Savings program.  This program allows Michigan taxpayers to contribute to an account to be used for educational expenses.  Earnings in this account accumulate free of both federal and state income taxes if they are used to pay qualified higher education expenses. Otherwise, they are tax deferred. The state will provide a matching grant of $1.00 for each $3.00 in contributions made to an MESP Account (up to a maximum state match of $200 per beneficiary and available only in the first year the beneficiary is enrolled in MESP), provided that the following criteria are met when the account is opened:  1) the beneficiary must be 6 years old or younger; 2) the beneficiary must be a resident of Michigan; and 3) the beneficiary must reside in a household with a family income of $80,000 or less.  The state has selected a private manager of the fund.  The $1 million appropriation pays for the state’s matching grants.

Recommended Action:

Eliminate the $1 million match.  Those who derive the greatest benefits from higher education should bear the largest burden of paying for it.  Those who need assistance can turn to private foundations and other mechanisms for their tuition.  Savings: $1,000,000.