Past commitments to school aid fade away
Updated with final conference report
None of the school aid budget proposals for next year offer significant help to our struggling local school districts. Overall funding is essentially flat, though the dollars are allocated differently in the various proposals. For a detailed breakdown of the final budget and the alternatives as passed by each chamber, please see this companion story.
Nevertheless, the budget bills do outline some major changes in how we fund our schools:
- Use of the School Aid Fund to support community colleges and state universities is now a permanent feature (the final conference report includes intent language to change the name of the SAF to the “Comprehensive Education Fund”);
- The commitment to maintaining the funding stream for K-12 education has been seriously eroded – for example, with the failure to replace earmarked revenue lost when the Michigan Business Tax was ended.
Where's your school funding?
State budget continues to dis-invest in education
Don't let it happen quietly! Our state lawmakers are about to pass a budget that keeps K-12 spending essentially flat, despite debilitating cuts over the last few years.
In case you aren’t on our mailing list, here is a copy of the May Legislative Update.
The topic is the state budget; included are an essay about the sad end of our state’s commitment to public education, links to recent articles on mipfs.org, an action alert on the state budget, and information about our work with the Michigan Organizing Collaborative on a statewide coalition of parent and community groups to support adequate school funding.
When is an increase not really an increase? When it’s an election year budget.
Gov. Rick Snyder’s budget proposal for the 2012-13 fiscal year was much anticipated, but its introduction was something of an anti-climax. In his budget presentation to the Legislature, the Governor described his proposals for K-12 education as a small but solid increase in funding. Other observers, looking closely at the numbers, begged to disagree. Regardless, the governor’s budget proposal makes the recent, much-reduced funding levels permanent. What little room there is for increased funding will be occupied by incentive payments: financial carrots intended to encourage what the governor calls “best practices.” Perhaps most important, it is clear that the Snyder Administration intends to lay to rest the idea that the School Aid Fund should be reserved for K-12 education.
UPDATE: This article describes the Governor’s “executive recommendation” for the budget; versions passed out of both the House and Senate appropriations subcommittees will be analyzed in a forthcoming article.
The latest projections show that revenue to the state School Aid Fund, which supports K-12 education in Michigan, will increase 2.7% next year, compared to a 4.3% drop this year. But will local public schools get a funding increase? There will be a lot of politics at work between now and the start of school next fall, and little can be taken for granted. While Governor Snyder is likely to use any school aid surplus to make one-time “pay for performance” payments, there is significantly less money available to do that this year.
Talk of an ever-growing flow of money to schools is, like many such things, wildly exaggerated. But it does serve to frame the debate about school funding in such a way that cutting schools seems only “fair.”
We started to hear it during the debate over next year’s state budget. Lawmakers backing the governor’s budget responded to constituents worried about cuts to K-12 schools with two, oddly contradictory, palliatives: that money for schools continued to “pour in” even though there were fewer students; and that “getting spending in line with reality means understanding our lack of revenue.” Sometimes these earnest-sounding claims were in the same paragraph.
The most recent example of this effort to depict schools as awash in cash comes in an interview of State Budget Director John Nixon by the AP’s Kathy Barks Hoffman.
Updated Wed. 5/25/11
The school aid budget was reported out of conference committee today, and sailed rapidly through the Senate. The “compromise” bill reduces the cut to K-12, but does not plow the funds into the foundation allowance.
Last week, the Governor and majority leaders of the Legislature announced a budget agreement that reduced cuts to public schools. They were able to do this because of the projected $430 million increase in State revenues for the current year. These are considered “one-time” funds, however, because a potential surplus for next year will be eaten up by the business tax cut recently passed by the Legislature.
House and Senate conferees will be able to negotiate virtually the entire K-12 budget from scratch, while passage of the Governor’s tax package narrows options and the revenue conference offers limited hope.
Over the next days, the members of the House and Senate conference committee on their respective versions of the School Aid budget will be hammering out a compromise, with virtually everything on the table – at least in theory. At the same time, passage last week of the Governor’s tax package – which eliminated the Michigan Business Tax and replaced it with the much smaller Corporate income tax and also increased personal income taxes on many filers – has effectively closed, for now, any options of increasing the revenue stream to school aid.
Finally, the May revenue estimation conference offered a glimmer of hope, indicating that revenues for the current fiscal year (2011) would be $132.4 million higher in the school aid fund and nearly $429 million higher in the SAF and General Fund combined. However, a potential $500 million overall surplus for next fiscal year largely evaporates with the tax package just passed, hitting the school aid fund especially hard.
Update: 13 May 2011
Tax changes lock-in reduced revenues for schools and other public services
In a dramatic series of votes yesterday, the package of tax changes proposed by the Governor emerged from committee in the Senate, passed on the floor of the Senate (with a 19-19 tie broken by the Lt. Governor), was sent over to the House where it passed there as well. The Governor is expected to sign the bills shortly.
With this rapid-fire move, the legislature has essentially closed off any option of looking at new revenue to support schools, at least for the foreseeable future. Because of a spending item inserted in the bill, it will be exempt even from a statewide referendum. The bills eliminate the Michigan Business Tax and replace it with a Corporate Income Tax that brings in $1.1 billion less in revenue for next year – an effective tax cut of $1.1 billion in FY12 and $1.7 billion in FY13.
Some of this revenue loss will be made up with taxation of all pension income of new retirees, a 70% cut in the Earned Income Tax Credit, and the elimination or limitation of many other personal tax credits.
What this means is that any moderation of the cuts to schools will have to come from cuts in other areas or luck in tax collections.
Everyone who values public education in Michigan needs to speak out NOW
Dear Friends and Supporters of Education,
This is an extraordinary moment for public education in the state of Michigan. The full impact of the Great Recession, and of years of trying to ignore funding problems in education, are hitting our communities all at once. Dramatic changes are proposed, because "dire times require drastic measures." Over $1 billion would be cut from education under the Governor's proposed budget, most of that from K-12 education. These cuts would dramatically affect our schools, and limit the education we can offer to our children for years to come.
Do the changes make sense? Do they reflect the real needs and values of the people of Michigan? We're not so sure.