School & District Management

Debate Begins Over Paying for Mich. Public Schools

By The Associated Press — November 02, 2009 4 min read

Fifteen years ago, Michigan changed the way it pays for public education, switching from local property taxes to a mix of sales and property taxes, lottery revenue and other money.

Now, with cuts of nearly $300 per student looming and some districts looking at losing as much as $600 per student, think tanks, business groups and education advocates are calling for looking again at the way Michigan pays for public schools.

“The reduction in school revenues is really a product of the economy tanking,” says former state Rep. Lynn Jondahl, who was the Democratic House Taxation Committee chairman when Proposal A passed. He’s now working with the group, A Better Michigan Future, to get the state’s finances on a more stable footing.

“We’re in deep trouble a year from now without the stimulus money,” he says.

Schools are scrambling to absorb cuts being imposed on them this month. Total cuts in the public education budget total $292 per student.

That’s not even counting the $52 million Democratic Gov. Jennifer Granholm vetoed for wealthier school districts that get as much as $4,000 more per pupil than schools getting the lowest per-pupil grants. Those include more than two dozen in southeast Michigan and others — such as East Lansing, Saugatuck and Detour — scattered around the state.

Those school districts are looking at decreases of as much as $600 per student.

Lawmakers could erase some of the cuts school districts face. They have until Nov. 21 to come up with more revenue that would erase the $127-per-student cut Granholm imposed last week because she says the school aid budget isn’t balanced — a statement Senate Republicans dispute.

Lawmakers also could override Granholm’s veto of the $52 million for the wealthier districts by then, although that’s a tougher task since it takes a two-thirds vote in both the House and Senate.

The cuts would have been even worse if the state didn’t have $450 million in federal stimulus money to draw on for schools. The federal dollars saved schools from another $280-per-student decrease this school year.

The size of the hole will be worse next year, when the state will have far less federal stimulus money to fill it. That has a variety of interests looking at ways to change how schools are funded.

More than a third of the nearly $13 billion school aid budget now comes from the state’s 6 percent sales tax. Roughly another third comes from a state education tax assessed on property and income tax revenue. Business taxes account for 6 percent, bringing in slightly more than the lottery revenue — $677 million last school year — that goes to the school aid budget.

A smattering of minor taxes — from the real estate transfer tax to tobacco, liquor and casino wagering taxes — make up the rest of the money raised by the state to support schools. Last school year $600 million in federal stimulus funds and $1 billion in other federal spending rounded out the school aid budget.

Jondahl, who thought in 1994 that income tax revenue would be a more stable source of money for schools than sales tax, now says the decision really didn’t matter. School revenues have dropped during Michigan’s lengthy economic downturn, so any tax structure would have ultimately cracked.

“The key problem now is not the mechanism for funding, it’s the adequacy of resources,” he says.

So what’s the solution? It depends on who you ask.

The Legislative Commission on Government Efficiency recently suggested giving the state superintendent the power to consolidate school districts or intermediate school districts if at least 5 percent savings can be shown.

A variety of think tanks have suggested making school employees pay more for health care, or lowering health care benefits, possibly by including them in a pool covering all university, public education and state and government workers, as Democratic House Speaker Andy Dillon has suggested.

There’s also been talk of giving new teachers less pay, or switching them to a defined contribution system that includes 401(k)s rather than a monthly pension in retirement. Some districts have turned services such as transportation and cleaning over to private companies to save money.

All those approaches could hold down costs, but are sure to draw criticism from teachers and from community residents who don’t want to lose their local schools through consolidation.

There’s also the revenue side to be addressed, as the state’s structural deficit means the funding will continue to shrink if no action is taken.

One suggestion is to place a sales tax on at least some services, possibly after lowering the overall sales tax rate from 6 percent to 5 percent. The state also could move from a fixed income tax to a graduated one, although that would have to be approved by voters.

Lou Glazer supports a combination of approaches, from reforming the way schools are run to shoring up revenues that have been declining for nearly a decade.

Speaking Monday to the State Board of Education, the president of Michigan Future Inc., a nonpartisan research organization in Ann Arbor, says Michigan needs to invest enough to educate its children if it wants to be a prosperous state in the future.

“The places with the greatest concentration of talent win,” Glazer says. “You’ve got to free up money to do the public investments.”

Related Tags:

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Equity & Diversity Webinar
Culturally Relevant Pedagogy to Advance Educational Equity
Schools are welcoming students back into buildings for full-time in-person instruction in a few short weeks and now is the perfect time to take a hard look at both our practices and systems to build
Content provided by PowerMyLearning
Classroom Technology Webinar Making Big Technology Decisions: Advice for District Leaders, Principals, and Teachers
Educators at all levels make decisions that can have a huge impact on students. That’s especially true when it comes to the use of technology, which was activated like never before to help students learn
Professional Development Webinar Expand Digital Learning by Expanding Teacher Training
This discussion will examine how things have changed and offer guidance on smart, cost-effective ways to expand digital learning efforts and train teachers to maximize the use of new technologies for learning.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

School & District Management L.A. Unified to Require Testing of Students, Staff Regardless of Vaccination Status
The policy change in the nation's second-largest school district comes amid rising coronavirus cases, largely blamed on the Delta variant.
Howard Blume, Los Angeles Times
4 min read
L.A. schools interim Sup Megan K. Reilly visits Fairfax High School's "Field Day" event to launch the Ready Set volunteer recruitment campaign to highlight the nationwide need for mentors and tutors, to prepare the country's public education students for the upcoming school year. The event coincides with National Summer Learning Week, where U.S. Secretary of Education Miguel Cardona is highlighting the importance of re-engaging students and building excitement around returning to in-person learning this fall. high school, with interim LAUSD superintendent and others. Fairfax High School on Wednesday, July 14, 2021 in Los Angeles, CA.
In this July 14, 2021, photo, Los Angeles Unified School District interim Superintendent Megan K. Reilly speaks at an event at Fairfax High School in Los Angeles. Reilly announced a new district policy Thursday requiring all students and employees of the Los Angeles school district to take weekly coronavirus tests regardless of their vaccination status.
Al Seib/Los Angeles Times via TNS
School & District Management Why School Boards Are Now Hot Spots for Nasty Politics
Nationalized politics, shifts in local news coverage, and the rise of social media are turning school board meetings into slug fests.
11 min read
Collage of people yelling, praying, and masked in a board room.
Collage by Gina Tomko/Education Week and Getty Images
School & District Management Opinion The Six Leadership Lessons I Learned From the Pandemic
These guiding principles can help leaders prepare for another challenging year—and any future crises to come.
David Vroonland
3 min read
A hand about to touch a phone.
Vanessa Solis/Education Week and Getty Images
School & District Management Opinion When the National Education Debate Is Too Noisy, Look Local
A local network of your peers can offer not just practical advice, but an emotional safe harbor.
Christian M. Elkington
2 min read
A team of workmen on scaffolding rely on each other.
Vanessa Solis/Education Week and Getty Images