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Michigan Schools Face $55 Million In Tax Losses

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An "economic-recovery program" proposed by Governor William G. Milliken of Michigan would come at the expense of the hard-pressed state's public schools, according to a coalition of 12 education groups.

Governor Milliken's plan, which is before the legislature, calls for a 20-percent reduction in locally levied property taxes, phased in over three years. Under the plan, the state would replace only 65 percent of the revenues lost by school systems and other local-government agencies.

Michigan schools, which depend on property taxes for about 57 percent of their revenues, would lose at least $55 million this year since the bill, if passed by the legislature, would be effective on December tax bills and retroactive for all of calendar 1981; they would lose up to four times that amount by 1984, according to estimates from state education officials and the Michigan Education Association.

"Admittedly it's a small percentage" of the nearly $4 billion spent annually on public schools and colleges in the state, said Keith Geiger, president of the teachers' association.

But many Michigan school districts already levy the maximum property-tax millage allowed by state law, and thus have no means of making up the lost revenue. Coming on top of cuts already made--including the layoffs of approximately 6,000 teachers and 4,000 classified employees--the Milliken initiative would cripple the state's school districts, education leaders fear.

One dramatic example of a Michigan district in deep financial trouble is Alpena, in the northeastern section of the state. For the third time in five months, Alpena voters recently rejected a millage request. By special permission of the legislature, the school board will hold another referendum at the end of this month. If the voters do not change their minds, school officials say, the 7,000-student system will be forced to shut down for several weeks beginning in November.

"All of us support efforts by Governor Milliken to develop and implement an economic-recovery plan for our state," said Phillip E. Runkel, state superintendent of public instruction and a leader of the coalition opposing the Milliken plan. "We want jobs for the unemployed. We want young people to get the education and training to be successfully employed. Training young people for jobs and retraining older workers is essential. But public education can't do these important tasks with further cuts in education budgets."

In addition to depriving the schools of revenue already approved by voters in local millage referendums, Governor Milliken's plan would only deepen the state deficit, coalition leaders maintain. Estimates of the state's 1982 deficit range from $130 million to nearly $300 million. Continued high unemployment--the highest in the nation--and a large elderly population have severely strained the state's finances.

Michigan residents pay relatively high taxes, but their state was one of the first to provide relief to families on fixed incomes through a mechanism called the "circuit breaker." When property taxes exceed 3.5 percent of income, the taxpayer receives a rebate for the difference.

Twice in recent years, the state's voters have rejected amendments that would have cut property taxes. But the anti-property-tax forces "have been out there hammering, and the legislators have become gun-shy," Mr. Geiger said. "Right now, if they took a vote on [the governor's plan], it would pass overwhelmingly."

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