State Budget Discussions: School Implications, Again

Budget Season is Back

Steve Norton of Michigan Parents for Schools wrote last week:

After a three-week break in April, the State Legislature is back at it again. It's budget season in an election year, which means that lawmakers will be trying to satisfy voters by showing some support for key programs such as our public schools -- or at least give the appearance of doing so.

He notes that the state's revenue projections, coming out this week, will have a major impact. The first projection came out today (two more coming tomorrow and Thursday), and at least the first projections don't look too good for schools--given that they are clearly an afterthought for Snyder and Company.

According to this article, the House Fiscal Agency projects that "The state will bring in about $400 million a year less in revenue than officials estimated in January." [Note: revenues are growing. Just not as much as the projections from earlier this year, which were revised to be ever more optimistic.]

Further, according to the article,

Net state revenue is projected to dip just under 1% in 2013-14, the report says. While general fund revenue is expected to dip 3% — or $290 million — to $9.3 billion. The net School Aid Fund revenue is expected to increase about 1.5% — or $169 million — to $11.4 billion. Net revenue still is expected to increase significantly in 2014-15 and 2015-16, just not by as much as projected earlier.

And--there is significant competition for any money that is seen as "extra" for road funding and the Detroit bankruptcy. And also--the Detroit News is reporting that the Education Achievement Authority administrators are jet-setting around the country while the rest of the state loans them money.

Big, beautiful Michigan does not want to fund its
schools properly. (At least, its government doesn't.)
Map taken from:
http://upload.wikimedia.org/wikipedia/commons/8/89/Relief_map_of_USA_Michigan.png

School Funding Proposals

According to Michigan Parents for Schools, the current proposals for school funding are as follows:

Governor's proposal	House version	Senate version	Inflation projections
Minimum: +$111 (to $7,187), 1.6% increase Basic (maximum) +$83 (to $8,132), 1.0% increase	Minimum +$112,1.6% increase Basic +$56, 0.7% increase	Min +$300,4.2% increase Basic +$150,1.9% increase	2014 forecast: 1.3% Avg. 2011-13: 2.3%
These increases do not reflect other changes, like "best practices" and pension plan cost changes, which may raise or lower the per-pupil funding available.

Or, as Christine Stead (AAPS school board member) succinctly states in describing the impact on Ann Arbor schools (this helped me visualize the numbers)

One would think that our FY15 will be much better [ed. note: due to the economic recovery] and we can look forward to investing again in one of our most important economic drivers: high quality education. Until you review the state’s proposals ($$ shows the impact for AAPS):
Governor’s proposal: $55,000  Senate proposal: ($2,171,000)  House proposal: ($1,276,000) 

There is a serious disconnect in how our schools are funded, the state of our economy, and any local community’s ability to do anything about it (currently).

Multiply that by schools around the state. 

Talking Points

Michigan Parents' for Schools talking points:

At the very least, all districts deserve an increase in per-pupil funding that allows them to keep up with inflation. 

These increases should be calculated after the impact of other changes such as shifts in state pension costs, not before.  

Current law specifies that school districts should get a supplement in their per-pupil funding for every student from a family living below the poverty line. But we have never fully funded this provision, and the current spending level only covers half of what the law requires. We need to give our schools the resources they need to fight the impact of poverty, and all schools should be eligible for these funds. 

Right now, local school districts must take money from their general education funds in order to meet their important (and legally required) obligations to provide special education services. Our schools should not have to choose between meeting their moral and legal obligations to students with disabilities and having sufficient resources for all their students.

It's hard not to feel despairing about the impact we can have. 
But we need to keep trying.

Giving Input on Proposal A

Christine Stead is asking for some specific input. Here's why:

John [Austin, President of the State Board of Education], and the State Board of Education, has started a process to seek input from different organizations on the impact of Proposal A and the general funding experience for public education.  The process will shift to take input from community members and school systems over the next few months.  Presentations made so far can be found here.

I will accompany the Superintendent and CFO from the AAPS on June 17th to submit the AAPS experience and recommendations for changes to Proposal A.

If you have specific suggestions, Christine Stead would like to hear from you with your suggestions about changes to Proposal A. She writes, 

Folks can either email me or submit comments/questions to this site [k12christinestead.com]. I’ll do what I can to get answers to questions. I also don’t mind submitting folks’ comments to the State Board of Education as part of our testimony – especially if they lead toward solutions. You can use either email for me: steadc@aaps.k12.mi.us or christine.stead@gmail.com. 

Consider subscribing to Ann Arbor Schools Musings by Email!

School Finance: Can We Change Proposal A?

This discussion took place in the comments section of this blog post. I thought it was worth sharing more widely. Many thanks to Steve Norton of Michigan Parents for Schools for providing such great detail!

CG said...

Is anyone talking about making a campaign to amend the Proposal A section of the constitution? It seems like that's what it would take to fix this situation.

October 22, 2013 at 10:29 AM 

Steve Norton, MIPFS said...

There is always some talk about changing Proposal A, especially now that nearly 20 years has passed since its adoption. But it's a complex issue, and changing the constitution might not be the best way to fix school funding.

What I'm hearing most about right now are some proposed constitutional amendments (in the Legislature) that would restrict use of the state School Aid Fund to K-12 education only. (Currently, some of it is being used to pay for higher education - a use that is allowed under the Constitution but was clearly not anticipated by the authors of Proposal A.) As we saw last year, constitutional amendments are hard to sell to the public, but this one might have momentum. However, it would not truly solve the problems.

The funding system created by Proposal A has a lot of pieces, not all of which are in the Constitution. Different people dislike different parts of it: some upstate residents are angry that per-pupil funding has not yet been fully equalized across the state; some districts are frustrated that they cannot vote to increase their own taxes to support school operations; most people like the limits on the growth of taxable value of property but many - especially those in real estate - do not like the fact that taxable value resets to SEV when a property is sold (the "pop-up tax").

There are really two approaches to changing the funding system: giving local districts more control, and changing the funding stream. A lot of districts, typically those with high property values, would love to be able to increase their own local taxes to fund school operations. However, across the state, most districts have a pretty modest tax base and would not benefit much from that (and they worry it would increase inequality and reduce pressure to increase funding for all schools). It would be very hard to move any but the most limited proposal along these lines through the Legislature, though it can be changed in statute and does not need a constitutional amendment.

The other approach is to change the funding stream - and this can also be done in statute. Increases in the 6 mill State Education Property Tax are difficult - the constitution requires a 3/4 super-majority in both houses of the Legislature to do this. However, most of the state School Aid Fund comes from the sales tax and the income tax. Changing the rate of the sales tax might take a constitutional amendment (and would be undesirable for other reasons), but extending the tax to services can be done by the Legislature with a normal change in the law. Since services have been the growing part of the economy, and retail sales have not grown as fast as the economy, this would fix one of the built-in limitations of the current funding system. Similarly, the formula for earmarking income tax receipts to School Aid can be changed with normal Legislative action.

But recently, we've been going in just the opposite direction. As part of Gov. Snyder's proposal to end the Michigan Business Tax and replace it with a much smaller Corporate Income Tax (passed into law in 2011), the state School Aid Fund permanently lost $750 million per year that had been earmarked from the MBT but was not replaced. This helped turn the dip in school aid caused by the recession into a permanent state of affairs.

The true battleground is tax policy. If we want to fund education adequately state-wide, we need to change the funding stream to education. There is no mystery about how to do this. What is lacking is the political will - in the Governor's office and in the Legislature - to even discuss raising revenue for the benefit of education.

Steve Norton
Executive Director, Michigan Parents for Schools

October 23, 2013 at 11:29 AM 

CG said...

Thank you, Steve, for this--very informative. How can interested people (like me) help?

October 23, 2013 at 12:11 PM 

Steven Norton said...

That's a good question: how can interested people help?

There are several layers to this. One is local, and it has to do with getting the community re-engaged with our local public schools and reminding people that we have a responsibility to our community and our future when we consider options for our schools. We're not customers, we're owners - and that implies both authority and responsibility.

But on the state level, residents of the Ann Arbor Schools region need to be a little creative. Unlike parents in much of the western and northern parts of the state, our state legislators are almost universally supportive of more funding for education and community control of our schools. Voting for state-wide offices is important. But perhaps most important is to take the lead in shifting the debate on education policy.

Ann Arbor is in a special position to lead on this issue, because we are an affluent community that cares about quality education but wants it for all children, no matter where they live. We don't have a problem sharing resources; we just want to be able to keep what is best about our schools at the same time. This gives us the opportunity to take the moral high ground: what we want for our children is what we want for all children. My organization has taken precisely this position on hot-button issues like the Education Achievement Authority, and as a result we were able to bring together groups that don't usually work with each other, from both upstate and western Michigan and Detroit. We need to break down the regional barriers that have fractured the parent community and prevented us from uniting behind a common purpose.

How to do this? Well, all Ann Arbor citizens can help back up our state lawmakers when they argue for sound education policy in Lansing; we can also reach out directly to lawmakers from other regions. Parents and citizens can participate in state-wide efforts to unite those who care about authentically public education, giving strength to the efforts of organizations like Michigan Parents for Schools. We can and should form alliances with people of goodwill in all parts of the state. And we can use the intelligence and energy of our community to change the public discourse about education all across our state. The current trend to denigrate community-governed public education is based on some core (flawed) ideas; we need to spread other ideas that remind people why our nation has always put a top priority on democratically-governed public education.

It won't be easy or quick. The current situation, where education is seen as just another consumer good and market competition its salvation, has been decades in the making. If we are to turn it around, we must all look beyond the walls of our own schools and the borders of our neighborhoods, and ask others to do likewise.

Steve Norton
Executive Director, Michigan Parents for Schools

Michigan School Finance Primer: Part 1 (With Awesome Graphics)

My friend and I were discussing the Ann Arbor schools budget. (I know, wild and crazy, right?) She was saying, "Why can't we do X," and "Why can't we do Y," and I was saying, "It's because of how Michigan's school finance system works." And she said, "It's so confusing. I need a graphic or something."

So here is my attempt at graphics. Over the coming year I will try and do a series of pieces about Michigan's school finance system. Yes, it's all stuff you need to know.

Shelly, these are for you (and for the rest of you too.) Apologies for the white out--my high school friends used to say I could never write a complete page without crossing something out...

This fine drawing done by Ruth Kraut (2013). It's ok to use it if credit is given.
And I think if you want to see it better, just click on it to enlarge it.

This fine drawing done by Ruth Kraut (2013). It's ok to use it if credit is given.
And I should have mentioned in the graphic that in the post-Proposal A
world, the state generally was providing 80% of the school funding.
If you want to see the drawing better, just click on it to enlarge it.

The basics come from a paper done by the Senate Fiscal Agency in 2004 by Kathryn Summers-Coty, Proposal A: Are We Better Off? A Ten-Year Analysis 1993-1994 through 2003-2004. We'll take a closer look at that in a later post, but I found this paper to be stunning. It uses certain assumptions to compare 1993-1994 (all thoroughly described in the paper) and concludes that ten years later,

out of 553 school districts, 28 are better off with Proposal A and 525 are worse off in terms of combined State and local revenue. Essentially, this means that comparing actual 2003-04 State Aid payments plus districts' actual 2003-04 local property tax revenue with estimated State payments and local revenue if Proposal A had not happened, yields less money for 95% of the districts (p. 2, emphases added).

Election Eve: Voting Reminders

Of course it's important that you vote, and remember--an educated voter is the best voter. To get your personalized ballot and read candidate statements, visit the League of Women Voters web site: www.vote411.org.

Another useful source of information is the Citizens Research Council of Michigan. Look for information on their web site at: http://election.crcmich.org/

 

Here are links to the pieces I've written about the election: 

School board races and more: 

2012 Washtenaw County Education-Related Items on the Ballot (with lots of links to other information)
This includes information about school board races across the county, including school board races in Ann Arbor, Saline, Dexter, Chelsea, Manchester, Ypsilanti, Whitmore Lake, Lincoln Consolidated, Willow Run, and Milan.

On the Ballot:

1. Non-partisan candidates matter for education (and I give some examples of why)

2. The proposals really matter for education (and I give some examples of why)

3. Washtenaw Community College board election (and I share some important background information) about why I am voting for Morton and Landau.


Ypsilanti/Willow Run Consolidation:

1. On the ballot: Ypsilanti/Willow Run Consolidation 

2. Thoughts about the consolidation from a guest poster (YpsiAnon)


Here are the things I am thinking about as I figure out who and what I am voting for:

1. In some of the cases above I've told you who I'm voting for:
For Supreme Court, I'm voting for Kelly, Johnson, and McCormack. I don't usually know too much about the Supreme Court candidates, but I had the opportunity to hear Bridget Mary McCormack, and she was truly impressive in discussing how the administration of law can change lives. Lots of educational issues do go through the courts (as I discuss, linked above) and I believe these three candidates will make an important difference.

2. On the proposals, I'm voting:
Proposal 1--No (ends the current emergency manager law)--as I explain, I see this as a civil rights issue--here is why.

Michigan Parents for Schools suggests you vote No on Proposal 1 because:

1) We urge you to vote NO on Proposal 1, the referendum on the most recent emergency manager law (PA 4 of 2011). A NO vote is a vote to repeal the law, leaving the previous emergency financial manger law in force (PA 72 of 1990).
Why? The nonpartisan Citizens Research Council of Michigan said it best: "The great departure in PA 4 [from previous law] is the granting of powers to emergency managers that are significantly greater than those that may be exercised by locally elected officials and the extension of those powers into every aspect of the local government." [emphasis added]
In short, PA 4 was an unprecedented intrusion into local democratic control of our schools and communities. Emergency Managers of school districts were given power not only over financial matters but also over curriculum decisions. Locally elected school boards were stripped of all power and effectively disbanded. Perhaps the most startling use of this power by EMs was the decision to close local school districts and replace them with charter school networks in two Michigan communities.

While the state government may have legitimate cause to intervene in local finances when things go awry, the extraordinary powers granted by PA 4 take this much too far. We urge a NO vote on Proposal 1.

Proposal 2--Yes (puts collective bargaining in the constitution). I think teachers and other workers need this protection.
Proposal 3--Yes (energy)--I don't see this as an education issue but I'm worried about climate change.
Proposal 4--leaning toward Yes (home health aides being allowed to organize--I don't see this as an education issue)
Proposal 5--No (supermajority for taxes)--this proposal is probably the most important one on the ballot regarding education, and it's funded by Matty Moroun--please, please, please vote no (read why using the link above).

Michigan Parents for Schools suggests you vote No on Proposal 5 because:

2) We also strongly urge you to vote NO on Proposal 5. This proposal, backed by a narrow array of anti-tax groups and special interests, would require a two-thirds majority vote in both houses of the Legislature for any increase in taxes. This notion might be appealing to some citizens, but the consequences for our schools and our state would be devastating.
The share of state personal income which state taxes now collect is close to the lowest levels seen since the Headlee Amendment was approved in 1978. The Michigan Legislature has been underfunding education for years and has locked our school funding into a tax structure that is not keeping up with inflation, let alone educational needs. This proposal would give a handful of legislators veto power over all efforts to increase revenue for education and other public services. For example, as few as 12 State Senators could block new sources of school funding.

Proposal 6--No (bridge proposal--another proposal funded by Matty Moroun

3. Ypsilanti/Willow Run consolidation--Ypsilanti and Willow Run are very much between a rock and a hard place here. I don't believe that this is the best deal they could have gotten, and there are significant risks associated with it. On the other hand, this is the deal they got, and it might be better than the alternatives. You can read more about the choices at:
http://www.together4ss.org/http://voteyes4kids.weebly.com/index.html

4. I know, you want to know how I'm voting for the Ann Arbor school board. I am voting for Deb Mexicotte. I appreciate that she works very hard, has educated herself on a lot of school issues, and appears to be honest and tell people what she's thinking and not necessarily what they want to hear. Having said that, I've had several occasions where she and I have not agreed, and if there were other candidates whom I thought agreed with me more I would probably support them. There aren't. At least not in this go-round.

Highland Park: The New Kalkaska?

The other day I was surprised to hear, on NPR, that Governor Snyder was telling the parents of students in the Highland Park, Michigan school district, that the district might run out of money and have to shut its doors even before the end of the school year--and/or he might appoint an emergency financial manager. (Snyder has already determined that there is a financial emergency.)

Maybe I shouldn't have been surprised. This is a road that Willow Run could be going down as well, as I described a few days ago. Just a few short weeks ago Highland Park got an emergency loan from the state to cover payroll.

According to this Detroit Free Press article,

The [emergency financial review] team found that a financial emergency exists based on factors including ending the school year on June 30 with an $11.3-million deficit, a 51% increase from the previous year.
The district had an operating deficit in excess of revenues for five of the six years evaluated and an average operating deficit of $2.3 million over seven years, [Michigan Department of Education Deputy Superintendent] Wolenberg said in her presentation on behalf of the review team.
The district saw a decrease in enrollment from 1,858 students in 2010 to 1,331 in 2011. There are currently 969 students enrolled, and about 40% of them live in Detroit, Wolenberg said. (1/21/2012)

Based on this determination, Governor Snyder sent out a letter to parents of students in the district. According to district officials,

the letter sends a deceptive message and could be taken as a warning to parents to get out of the district.
"If you were a parent this would be intended to scare you," said Highland Park school board secretary Robert Davis. "This is unprecedented communication with the parents. Why wouldn't you notify district officials?"

That's not the governor's perspective.

Sara Wurfel, a spokeswoman for Snyder, said the letter was meant to address the anger, fear and frustrations of the district's parents.

(Both quotes taken from a 1/24/2012 article in the Detroit Free Press, Highland Park schools 'in jeopardy of closing,' Snyder tells parents.)


Do you even know where Highland Park is? It is a small, impoverished urban community (fewer than 12,000 people) completely surrounded by the City of Detroit.

It also happens to be nearly 93% African-American. Just like many other communities that either have had emergency financial managers assigned to them or have the threat of them being assigned hanging over their heads.

And the city of Highland Park itself has been under emergency management for most of the decade of the oughts (as the 2000s can be called).

Do you even know where Kalkaska is? It is a small, poor (but not as poor as Highland Park) rural community with a population of under 2300, located in Kalkaska County in the northwestern part of the Lower Peninsula. The school district is geographically (and populationally--yes, I know that is not a word, but I like it anyway) larger than the village of Kalkaska, with something closer to 13,000 residents. (I'm not sure of the boundaries so I can't be too exact.) 

Oh, and Kalkaska happens to be over 96% white.

So in some ways, Kalkaska is a mirror image of Highland Park. But they also have a lot in common. This article from the Ludington Daily News of March 6, 1993, "Kalkaska system on brink of early closing as funds run out," explains it nicely.

Kalkaska (and other districts, too, like Ypsilanti!) was under a lot of financial stress--and the district famously closed three months early, at the end of March, in 1993.

And this "shot heard round Michigan," (if not the world) created a lot of impetus for the development of Proposal A. And as we see now, Proposal A solved some problems, but it created a whole host of others.

In 2012, Highland Park is not the only school district faced with the possibility of closing. Only this time, rather than the decision being made by the people who live there, the decision would be made by the state.

And I wonder, will any of this be the necessary catalyst for change? And if not, why not? Would race have anything to do with it?