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Michigan Districts Plan Suit, Create Lobby To Press Finance Changes

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Several Michigan school superintendents have taken initial steps toward the filing of a lawsuit challenging the constitutionality of the state's school-finance system.

They did so as school-board members from poorer districts banded together to lobby for greater equity in Michigan's tax and school-funding systems.

Both developments unfolded last month against a backdrop of fiscal uncertainty created by the legisla4ture's December defeat of a bill that would have increased the state's share of school costs by raising the sales tax and lowering property taxes.

Support for that measure collapsed amid infighting among the Democratic governor, House Democrats, Senate Republicans, and the education and business lobbies.

Key Senate Republicans say they have given up hope of reaching a compromise this year, and will instead launch a petition drive aimed at guaranteeing the school-aid fund a higher percentage of general-fund revenues.

Two veteran House Republicans, however, introduced a bill last week that they say incorporates elements of proposals backed by the various sides in the dispute.

Gov. James J. Blanchard, meanwhile, has maintained silence on the issue following the rejection of his finance-reform proposal late last year. He was expected to address the topic in his State of the State Message this week and in his budget proposal for fiscal 1990.

Spokesmen for the superintendents and the board members from so-called "in-formula" districts said the uncertain prospects for a legislative solution to the finance problem spurred the officials to take action.

The spokesmen also said the actions reflected the officials' belief that the Michigan Association of School Boards and the Michigan Association of School Administrators cannot represent them in negotiations on this issue because they must also represent the "out-of-formula" districts.

Under the current finance system, out-of-formula districts are those that are able to fully fund their programs without state aid because they have relatively high property values and tax rates. School systems with lower property values and tax rates--primarily those in urban and rural areas--qualify for state funding and thus are known as in-formula districts.

"Our interests cannot be served by [the school administrators' association] because they have to make compromises and we can't make compromises any more," said Gary Jackson, the head of the association's in-formula caucus, which is spearheading the drive for a lawsuit.

Mr. Jackson, superintendent of the 2,025-student New Boston-Huron Township district, added that lawmakers face a similar problem because their constituencies also include both poor and affluent districts. "They're in a political situation that does not allow them to take on this issue in the way that they should," he said.

"As a result," Mr. Jackson continued, "we decided to do something about the problem by ourselves, and the most logical method is through the courts."

An earlier school-finance suit in the state reached the Michigan Supreme Court, but was declared moot due to a change in the finance formula. A second suit reached the state court of appeals only to be dismissed on a technicality.

Mr. Jackson said his group's first task will be to file suit to resolve the technical question of whether districts can use tax dollars to support a legal action against the state. That suit, he said, will be filed in a state trial court in coming weeks.

If the group prevails on that issue, he continued, it will then file a second suit aimed at forcing the state to revise its funding system.

"Our objective is to bring equity in funding to the districts of Michigan," Mr. Jackson said. "We don't care how they do it, we just know it can be done. We think there's enough know-how and brainpower in the legislature and the Governor's office to make something that will work."

Meanwhile, approximately 60 of the 390 in-formula districts have formed a coalition to urge lawmakers to take such action during the current session.

"We concluded that nothing was going to change until we created a voice for the children in in-formula districts," said Thomas Wilson, president of the Wyandotte school board and head of the new organization, Boards United for Fair Funding in Schools.

Mr. Wilson said the group hopes "to communicate a simple message to the legislature and the general public--we need to provide educational equity to all children, regardless of where they live."

The new lobbying group is not committed to any of the proposals that have been offered during the past year. But Mr. Wilson and Mr. Jackson both said members of their groups had expressed interest in a bill introduced last week by Representatives Michael Nye and Glenn Oxender, the former vice-chairman of the House education committee.

Under their "responsible tax-reform act of 1989," the sales tax would be raised from 4 cents to 6 cents. The increased revenues would be dedicated to education, and the measure would ensure that they would not be used to supplant current revenues from the state lottery and other sources.

In addition, property taxes would be reduced by an average of 11 percent for homeowners and 6 percent for businesses.

Districts' property-tax rates would become their permanent tax bases after the cuts take effect. The bill also would allow them to seek voter approval for an additional property tax of 4 mills or for a local income tax.

The two Republican lawmakers estimated that their five-year plan would increase state school aid from its current level of $503 million to $815 million in the 1993-94 school year.

They also said their plan would significantly narrow the gap between districts in per-pupil spending.

Currently, spending per pupil ranges from a low of $2,000 to a high of $7,200. Under the plan, the lawmakers said, spending would range from a low of $4,000 to a high of $6,250 for 96 percent of all districts. In the remaining 18 districts--which include some of the state's most affluent--the amount spent would range from $6,452 to $10,201.

"People are understandably frustrated with the abundance of school-finance proposals in the last few years and the lack of results," Representative Nye said in a prepared statement. "However, I believe [our proposal] incorporates the best of these plans and offers several unique features that will be acceptable to all advocates of school-finance and property-tax reform."

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