News and Analysis

h3. No EO cuts for schools - yet - and sinking fund legislation moves. Michigan's school districts received two somewhat unexpected doses of good news this week, at a time when good news is pretty sparse. The biggest news came on Wednesday, when state Budget Director Bob Emerson told a joint session of the House and Senate Appropriations committees that education funding would not be touched in Gov. Jennifer Granholm's executive order detailing $134 million in budget cuts.

*Having narrowly avoided a government shutdown on October 1st, our legislators got perilously close to Halloween before approving final budget documents for the fiscal year that was already one month old.* One of the less controversial, but still critical, items, was the School Aid budget, which determines per-pupil spending limits and state aid payments to local school districts. Constant readers will not be surprised that we - like many others concerned about school funding - found the budget bill to be a mixed bag. The bill does provide for a modest increase in per pupil funding, and resumes closing the gap between lower and higher-spending districts. But overall state spending for school aid is flat, and our lawmakers have made no clear commitment to invest in education. School aid revenues remain vulnerable, and the future of the extended services tax - the one part of the compromise revenue package which increased direct revenue to the school aid fund - became more uncertain as the month wore on. *Our forecast: storm clouds ahead.*

*When efforts to broker budget compromises on the floors of the House and Senate failed, our lawmakers essentially punted: the two houses sent gutted, but still incompatible, versions of an income tax bill to conference committee, where a handful of lawmakers will get to try again.*

*Nearly every school district passed its budget for this year last June, our children went back to school this week, and the State's new fiscal year begins in 24 days. But, as yet, there is no agreement in Lansing on what schools will be allowed to spend this year, let alone how it will be paid for.*

You would think this would put school systems in a bind, and you would be right. Sadly, the fate of our schools and our children's education takes a back seat to larger issues, namely: who is going to take the blame for increasing taxes.