The Fiscal Advisory Committee is set to release a proposed budget for next year that would call for a 5.3 percent increase in tuition, said Larry Mucciolo, senior vice president for administration and finance. The increase is largely due to increases in financial aid, as well as high oil costs this year that have made it more expensive to heat campus buildings, Mucciolo said.

High energy costs were one of the key issues the committee dealt with this year, and despite attempts at conservation and careful purchasing, it is more expensive to heat the campus than it was a year ago, Mucciolo said.

Another major expense is increased financial aid, which Mucciolo said has been a priority for the past decade, and which Student Government Association Vice President for Financial Affairs Billy Haddad said is a victory for students.

“We got an additional $1 million in financial aid for students,” Haddad said. “And that’s going specifically toward upperclassmen.”

Both Haddad and Mucciolo explained that in the past, financial aid has been awarded to students in five-year packages, which puts upperclassmen at a disadvantage as tuition rises each year but their financial aid award remains the same. Haddad said some of the money in this year’s budget will go to supplement the unmet financial need of upperclassmen. On the whole, he said, the tuition increase is reasonable.

“I think the number is a decent compromise between the administration and students,” Haddad said. “Originally, they had come out with a higher number, around the sixes, and we said we just can’t afford 6 percent. … 5.3 is generally reasonable, and it’s going to be lower than the national average.”

The proposed increase is less than last year’s, which was about 6.1 percent. Mucciolo said a major reason the percentage decreased is because the committee is proposing all major university departments decrease their spending, in what he called a $3 million reallocation.

This reallocation means the departments will collectively cut $3 million from their existing budgets, freeing up that money for other areas of the budget. Mucciolo said without the reallocation, the tuition increase would likely have been closer to last year’s figure.

This is the first time the committee has recommended a reallocation since the mid-1990s, Budget Director Samuel Solomon said.

“At the end of the day, reallocation makes the difference,” Mucciolo said.

The proposed increase translates to about $1,490 per year for the average student, Solomon said. This number excludes housing and meal plan costs, which Mucciolo said will increasing by 4 to 6 percent, depending on individual residence halls and meal plans. Given the various priorities the committee had to weigh, Mucciolo thinks the proposal is a solid compromise.

“It’s obviously looking at competing needs, but balancing it against how much students are paying,” he said. “Every year you try to do two things: meet our basic institutional requirements to operate because of inflation, but also provide something more than just doing the same thing at a higher price.”

Mucciolo mentioned numerous enhancements to student life that will come from this year’s budget, including the opening of West Village F, and the purchase and renovation of two properties: St. Ann Parish, which will become a meeting and performance space, and 109 Hemenway St., which will house the Asian-American Student Center. Funds will also be used for other renovation projects and the establishment of an undergraduate research office.

The process for determining this year’s budget proposal was different than past years, when the budget went through the Committee for Funding Priorities and the Budget Committee. This year, administrators streamlined the process into one committee, the Fiscal Advisory Committee, with fewer members, but roughly the same proportion of students, faculty and deans. The committee was co-chaired by Mucciolo and Provost Ahmed Abdelal, who both said they thought this year’s process was smoother than in past years.

“The smaller committee is the most significant thing,” Mucciolo said. “I think everyone involved was really pleased with the process.”

Abdelal added that having just one committee made the process more efficient. The Fiscal Advisory Committee approved the proposed budget unanimously, and it will be presented publicly today, first at the faculty senate in 450 Dodge Hall during activities period, and then in an evening presentation at 6 p.m. in 168 Snell Engineering Center.