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Season of small miracles

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. Under State law, the governor must propose midstream budget cuts if projected tax revenues will be insufficient to pay for budgeted programs. The decline in the national economy, adding to a long period of economic difficulty here in Michigan, has dealt a serious blow to anticipated revenues. The representatives of both chambers accepted the governor's proposed cuts. The good news for schools was tempered by the fact that sales tax collections are down more than expected, which will put greater pressure on State funding for education later in the year. The second bit of good news came as lawmakers delivered on a promise to act on broadening sinking fund uses during this lame duck session. On Tuesday, the Democratic leadership gave notice of intent to discharge "HB 4141":http://legislature.mi.gov/doc.aspx?2007-HB-4141 from the Education committee, where it had languished for almost two years. On Thursday, with no debate, the House took up the bill on the floor and passed it 71-28, with immediate effect. This bill, and a similar bill stalled in the Senate, would broaden the legal uses of sinking funds. Currently, sinking funds (an odd name for capital needs funds) are used by school districts to address capital spending and renovation needs that come between the traditional ten- or twenty-year bond issue cycle. However, sinking funds cannot be used for some things on which bond proceeds may be spent: computer equipment and other technology purchases, and school buses, for example. The bill would broaden the permissible uses of sinking funds to include all things that can be purchased with bond money. Organizations of local school districts have pressed for similar legislation for some years now. Most attempts have run afoul of business groups, which argue that the change will simply encourage school districts to ask voters to approve sinking fund millages. In "testimony last year":http://www.miparentsforschools.org/node/31 on the Senate version of the bill, the Michigan Chamber of Commerce argued that the measure would end up undermining the intent of Proposal A, which was to reduce property taxes. The bill now goes to the Senate, where it faces an uncertain future in the remainder of this session.
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