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Published in Print: October 10, 2001, as After Budget Veto, Michigan Schools Brace for Cutbacks

After Budget Veto, Michigan Schools Brace for Cutbacks

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Michigan legislators are scrambling to protect a new, pared-down school aid budget for the fiscal year that began Oct. 1, even as they contemplate a more austere budget for the next one.

The actions are the result of increased economic worries, as state financial analysts say the revenue picture is gloomier than just a few weeks ago. State officials last week estimated a shortfall of $250 million to $350 million in the $11.4 billion school aid fund for 2001-02.

Late last week, a bill that would draw $300 million from the state's rainy-day fund to shore up school aid for the current fiscal year was moving through the legislature, with quick passage in the Senate predicted by Senate Majority Leader Dan L. DeGrow, a Republican.

"Our belief is this will get us through [fiscal year] 2002, but the governor is correct that we've got some problems in 2003," Sen. DeGrow said, referring to the school aid budget. Legislative leaders and Gov. John Engler have predicted that belt-tightening will be needed soon in areas of the state budget outside of precollegiate education.

Gov. Engler, a Republican, signaled the magnitude of possible problems on Sept. 28 by vetoing all K-12 funding for 2002-03 that he said was not required by law. The three-year school aid budget that Mr. Engler acted on had first been approved in 2000, but in the face of eroding tax revenues, the legislature modified it last month.

It arrived on Mr. Engler's desk with cuts totaling more than a half-billion dollars, mostly in 2002-03. ("Mich. Legislature Cuts Budget, but Keeps Basic Aid to Schools Intact," Oct. 3, 2001.)

Concerns Deepen

In his veto message, the governor said in effect that those cuts might not be enough. He called on the legislature to put together a budget for the coming fiscal year from scratch, probably when it convenes in 2002.

"Due to world events beyond our control, I am increasingly concerned about the fiscal year 2003 fiscal picture," Mr. Engler wrote, in an apparent reference to the economic problems that have been exacerbated by the Sept. 11 terrorist attacks on the World Trade Center and the Pentagon. "For that reason, I have vetoed all discretionary items."

The veto casts into doubt the $6,700 basic per-pupil aid to districts that the three-year budget called for in fiscal 2003—up $200 from this year's amount. The $6,500 per-pupil allotment for this fiscal year should remain, legislators and the governor said.

Also intact in the budget is money to run new programs this year, including $73 million for expanding preschool programs and $45 million to help parents work with their young children.

By means of his veto power, Gov. Engler also restored to this year's budget $8 million for the Golden Apple Awards program, as well as $20 million to train undereducated adults for jobs. The Golden Apple program makes awards of around $50,0000 to elementary schools, mostly for outstanding improvement in raising state test scores.

"Those were two key priorities of the governor he really wanted to maintain," said A. Scott Jenkins, the governor's education aide. The Golden Apple program is important to the governor not only because it rewards performance, he said, but also because it puts money in the hands of a school's staff to spend as they see fit.

Some in the legislature, which is controlled by Republicans, said they were perplexed by the governor's insistence on the spending. Sen. Leon Stille, a Republican who heads the subcommittee on education spending, said that while the Golden Apple rewards offered nice encouragement to educators, "we thought it was something we could forgo."

Meanwhile, Democrats in the legislature decried the new uncertainty over per-pupil aid in 2002-03 that Mr. Engler's vetoes introduce. "Attacking the basic foundation allowance undermines the stability of public education in Michigan," Senate Minority Leader John Cherry said.

Charter Panel Created

Also last week, Michigan lawmakers on both sides of the aisle sought to break the logjam over charter schools that has plagued the legislature for three years.

With a deep divide over whether universities should be able to charter more of the independent public schools, and the governor pressing for just that, leaders handed the problem to a new commission. The eight-person panel will include legislative and gubernatorial appointees, as well as state schools Superintendent Thomas D. Watkins or his designee. It will be headed by the president of Michigan State University, Peter McPherson.

The commission may report back on the state of Michigan's 185 charter schools as early as February, and it is unlikely that the issue will be taken up by the legislature before then.

Vol. 21, Issue 6, Pages 21,23

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