When does a "supplemental" spending bill not actually supplement anything? When it's a "negative supplemental," of course! (In everyday language, that's a mid-year budget cut.) Who is being "negatively supplemented"? Our children.
It turns out that our state government is in the hole some $532 million for the current year because some tax credit promises to business made years ago are being presented for payment. In characteristic fashion, however, our state government has chosen to partly duck the issue by taking money from - you guessed it - our K-12 public schools. To the tune of $250 million. It's like a rerun of a bad TV sitcom.
What's driving all this? Well, years ago, our state offered tax credits to businesses who were willing to keep or grow jobs in Michigan. Sounds like a reasonable idea. But the credits are worth more as the economy improves, and now that we're doing "better," the recipients of the credits can cash in all at once, whenever they choose. So our state government - and our CPA governor - got caught with their pants down.
There are two ways to respond to this. One would be to ask everyone to chip in a little bit, in a fair way, to help close the gap. Never gonna happen. Our legislature couldn't do that even to fix our Swiss cheese roads. The other way to handle it is to cut back services - and to look around for what you can steal. That's where our kids come in.
The gift of the disappearing student
Lo and behold, it turns out that Michigan has fewer students in public schools (local and charter) than expected. Our schools also had lower special education costs last year than the year before. You might think that this would allow the students who remain to get a little more education. You would be wrong. Just about every year, the governor and legislature have used this "bonus" to reduce spending - sometimes to close gaps, sometimes to carry money forward to make the next year's budget look better.
But this year, it's going to be used to close a whopper of a gap in the regular state budget. Money collected for education (into the School Aid Fund) legally has to be used for education, so some sleight of hand is called for.
Step 1: move half of the Community College budget - the half that's not already coming out of the School Aid Fund - over to the school aid budget. Impact: $167.1 million.
Step 2: move some pension system costs of state universities and local libraries from the General Fund state budget to School Aid. Impact: $4.2 million.
Step 3: cancel the remaining scheduled payments from the General Fund for school district unfunded pension liabilities (originally $100 million). Districts will have to pay this eventually. Impact: $88.4 million
The net result of these fund shifts and canceled payments, along with scrapping a new online nutrition and health program, is a savings to the General Fund budget of over $250 million, or about half of the total shortfall.
Even when we win, we lose
Don't get me wrong: there are also cuts in other state departments, including $90 million in "caseload and cost adjustments" in community health and human services. But that just makes the underlying question more urgent: why are we choosing to do nothing but cut critical public services? After years of cuts during Michigan's "one state recession," and some huge cuts in Gov. Snyder's first budget, the citizens of our state were hoping to get back some of the services we lost during that long decade. Instead, even in the recovery, we're losing ground again.
State economists already predict that increases in school pension costs will eat up any growth in school aid fund revenue for several more years. On top of that, any money left over from students leaving the state is snatched away instead of going to benefit those who remain.
No more cookie jar
Here's a radical idea: how about we find a way to pay for the public services we want? If we want better roads, let's fund it without resorting to complex shifts in the sales tax and statewide ballot proposals just to keep schools and local governments from losing money. If we want good schools, why don't we actually invest in them, rather than taking every opportunity to snatch funds away? Why indeed.
Ah, but what do good schools cost? A measure signed into law at the end of last year requires a study to figure this out. But guess what: the "negative supplemental" doesn't fund that either. For regular observers of our state legislature in action, this can hardly be a surprise.