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Mich. Officials Scramble in Wake of Property-Tax Decision

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For Michigan educators and public officials, the dog days of late summer have been a time of intense ferment, as they struggle to respond to the legislature's decision to abolish property taxes as a source of funding for the schools.

In a bold--some would say reckless--move, lawmakers in July voted to halt $6.3 billion in local property-tax funding to schools beginning in the 1994-95 school year. (See Education Week, Aug. 4, 1993.)

State leaders have promised by the end of the year to use the self-inflicted crisis to dramatically recast the existing school-finance system, which they have long complained relies too heavily on local property taxes and leaves large gaps in spending power between wealthy and poor school districts.

Their swift move to wipe out the traditional source of education revenues has left wide-open finance and reform opportunities involving both money and school operations.

Attention is expected to focus on those issues next week, as the state board of education hosts an "emergency convocation'' on the subject. The Sept. 13 all-day meeting, to be televised statewide, will include national experts and a town meeting with lawmakers.

"We are bringing together some of the best national and state voices to discuss this and to ask what pitfalls we should avoid and what is working in other places,'' said Bob Harris, the spokesman for the board and state education department. "We felt very strongly there was a need to inform those people who are making the decisions.''

Headliners for the meeting include John G. Augenblick, a Denver-based school-finance consultant; James W. Guthrie of the University of California at Berkeley; and Allan R. Odden of the University of Wisconsin at Madison. Also on the panel will be a number of prominent education officials, such as Deborah M. McGriff, the superintendent of the Detroit schools.

Observers said the meeting may mark the only significant statewide brainstorming session before various interest groups and political factions begin to settle on their own reform recommendations.

'Statesmanship' Needed

Gov. John Engler, who backed the tax abolition, will present his proposal to lawmakers in the middle of next month, according to a spokesman.

The Governor has tapped State Treasurer Douglas B. Roberts to take the lead in writing a comprehensive reform plan that will address education quality, taxation, and shifts in state and local responsibilities.

In recent weeks, the Republican Governor has floated the idea of reclaiming $600 million in state revenue sharing given to municipalities, which would be allowed to levy property taxes to recoup the lost funds.

Most groups crafting reform plans, however, are not ready to divulge the details. Observers predicted last week that an expanded school-choice program and a statewide property tax will be among the most prominent issues lawmakers will face.

"We are seeing a remarkable cast of players becoming involved,'' said Mr. Harris, who cautioned that the crisis will be a test of how well the various interests can work together.

"The reality of the crisis is going to dictate the solution, in a sense, because what we have right now is nothing,'' he said. "This is a chance for the political element in the state to show its statesmanship, because without that, I'm not sure we will have a solution.''

State leaders said they realize that they are not only in a political hot seat but also in a national spotlight.

"The whole country is watching what we're doing, and if we can do it right, a lot of other states may pick up on it,'' said John Truscott, a spokesman for Mr. Engler. "Everybody is coming up with their own plans to fit their needs, but what we want to put together is a plan that works for kids.''

To emphasize to the state's leaders that they need to act fast to develop a new system, the American Civil Liberties Union last month said it will sue the state if lawmakers do not finish work by Dec. 31.

The group also will take the state to court if it allows local funding shortfalls in this school year, said Howard Simon, the executive director of the state A.C.L.U.

Just because it is gazing at the future, the group says, the state cannot allow an early shutdown of a district--as happened last spring when the Kalkaska schools closed for lack of money.

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