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Fiscal Referendums in Several States Pit Education Against Business

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Fiscal-policy referendums on the ballot in several states next week are opening wide and at times bitter chasms between educators and business leaders.

Education and business groups are taking opposite sides and waging high-profile campaigns in Michigan, South Dakota, and Illinois, where voters are being asked to decide tax-related ballot issues with a major impact on school funding.

Observers say the battles over money point to the weak link in the often powerful ties forged in recent years between educators and corporate leaders. The ballot questions raise a difficult issue--whether school reforms have created a system worthy of greater investment.

Many educators argue that the coalitions they have built with the private sector have dissolved amid state business groups' self-interested stands on tax referendums.

Business groups, on the other hand, counter that the issues revolve around points other than education, and that education groups are using the cloak of reform to advance their own economic interests.

The strain and sense of betrayal is evident on both sides in Michigan, for example, where a "cut and cap'' referendum on property taxes is on the ballot.

"Hypocrisy reigns in the Michigan business community,'' charged David Olmstead, the finance chairman of the Detroit school board and an education-finance expert. "They don't put their money where their mouth is.''

But Jim Sandy, the education-excellence director of the Business Roundtable-Michigan and the Michigan Chamber of Commerce, responded: "In many circles, the education community says if you want to be an advocate, get your wallet out.''

'A Great Split' in Michigan

An intense campaign is being fought in Michigan over the measure to cut property-tax assessments by 30 percent over five years and limit increases to no more than 3 percent per year.

The proposal has a major potential impact on education funding in a state with one of the highest shares--roughly 60 percent--of school revenues derived from local sources.

But business backers of the plan say its economic impact bears on more than the condition of the schools.

"A lot of people in the education community look at property taxes and say, 'That's the only source of money we have,''' Mr. Sandy said. "But the business community is paying it, and we're having a hard time keeping our heads above water.''

The Michigan measure would require the state to make up lost local school funding, but many education advocates are wary of that promise. Mr. Olmstead and others also fear that the drastic changes would emphasize disparities in local school funding.

The opposition, led by the Michigan Education Association, also includes the National Association for the Advancement of Colored People and the Michigan Municipal League. The proponents' campaign is led by such business giants as the Detroit auto manufacturers, Detroit Edison, the Upjohn Company, the Dow Chemical Company, and various trade organizations.

Mr. Olmstead said that while the debate has unified wealthy and poor school districts across the state in opposition to the proposal, it has shattered much of the good will that had been building between educators and business leaders.

"The groups were coming together on issues like testing and standards, but this has caused a great split,'' he said.

Where Would the Money Go?

Such a gulf has also opened in South Dakota, where voters will decide whether to authorize the state's first personal- and corporate-income tax. The measure would require a reduction in property-tax rates, while also raising about $60 million in new education funds annually.

The state teachers' union is leading the campaign for the proposal, facing off against business interests.

"I represent a whole lot of people who would like to do whatever they can for education, but there are also questions about where the money would go,'' said Julie Johnson, an employee of the state Industry and Commerce Association who is serving as a spokeswoman for a group called Taxpayers Saying No to Higher Taxes.

"No one would disagree that property taxes should be relied on less for local education funding, but whether they need $62 million in new money that goes to schools without saying what they use if for, or how it gets there,'' Ms. Johnson said.

Going into the home stretch of the election, the opponents had spent about $100,000 on their campaign, an effort they estimated was matched by proponents.

Gene Enck, the executive director of the Associated School Boards of South Dakota, which has taken no position on the tax question, said it is not unusual that schools and businesses should part company on such a volatile issue.

"We've worked closely on what is needed in education,'' he said. "This is just not an issue to be close on.''

In Illinois, school leaders supporting a constitutional amendment that would require the state to take a greater role in financing public schools have expressed shock at how quickly business leaders who had pushed for reforms withdrew their support when the issue turned to money. (See Education Week, Oct. 14, 1992.)

"I thought the business community was going to be on board,'' said Sen. John W. Maitland Jr., a Republican member of a state school-finance task force and supporter of the finance amendment. "We have done everything substantial that business has asked us to do.''

'Status Quo, Plus'

Such incidents have led many educators to wonder when business leaders will be supportive of the funding increases that were expected to accompany education reforms.

In Colorado, backers of a 1 cent sales-tax increase for education can at least take comfort that the state's top industry groups are not actively opposing their initiative, which also provides for an array of school reforms. (See Education Week, Oct. 21, 1992.)

But the Colorado Association of Commerce and Industry's decision not to take a position on the proposal was not meant to signal tacit support for greater funding, officials explained.

"Everybody is in agreement that we need to beef up our education system,'' said George Dibble, the president of the Colorado business coalition. "But the sales tax is not the vehicle to do it, and these reforms have no teeth in them.''

Boasting that "we've been strong on reforms,'' Mr. Dibble also noted, however, that the group is opposing a tax-limitation measure on the ballot.

Mr. Dibble observed that, in many cases, disagreements over tax questions often become battles of self-interest fought by school employees and businesses, with little attention from either side to what is best for education.

"Teachers' unions have been unwilling to make concessions to get a lot of things done,'' Mr. Dibble argued. "They want the status quo, plus. They've got to look at other reform issues like tenure and changes in salary schedules.''

"The education community isn't entirely virtuous on this, because they are not comfortable with the issue of substantial change,'' acknowledged Mr. Olmstead of Detroit.

Still, many observers suggest that business leaders may not soon be comfortable with the notion of raising significant new funding from their sector for education, even after a decade of reforms.

"There may be a need for more funding,'' Mr. Sandy of Michigan said. "But we've got to look at everything we're doing. We're interested in anything that looks at fairly financing education that does not put all of the burden on business--that creates adversaries rather than advocates.''

Other Issues on Ballot

While the tax referendums mark the most watched items on state ballots Nov. 3, voters will also decide a wide range of other school-related measures.

In Missouri and West Virginia, referendums seek to lower the margin necessary for approval of tax measures, while in Arizona and Idaho, voters will decide measures aimed at raising tax-vote thresholds.

Statewide school-construction bond measures are on the ballot in California, New Mexico, and Virginia.

Voters in Georgia and Nebraska will vote on whether to adopt state lottery games. A Mississippi ballot question would repeal a constitutional prohibition of lotteries, freeing the legislature to authorize the games. (See Education Week, Oct. 7, 1992.)

In Georgia, a ballot proposal calls for doing away with the practice of electing local school superintendents. Kentucky's elected state superintendent of public instruction would be stripped of the few remaining duties tied to the constitutional office, completing a provision of the state's 1990 reform law under which the chief state school officer was made an appointed position.

A Colorado open-enrollment proposal would provide vouchers for parents to send their children to public or private schools.

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