State budget & taxes

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.

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.

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.

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.