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State education and school aid budget, and revenue sources for schools

First look: Snyder FY16-17 school aid budget

It's February, and as most of you know that means it's Budget time in Lansing. (You were thinking hearts and chocolate?)

Governor Rick Snyder presented his recommended budget last week to a packed room. The focus, not surprisingly, was on the water crisis in Flint and the restructuring of Detroit Public Schools. But the budget determines what kind of education can be offered to every child in the state, and the important bits are often in the details. At first glance, parent advocates have reason to be modestly pleased, though the reality is not as pretty as the picture painted on the cover. What happens in the end, however, depends on what comes out after the document has been reflected in the legislative funhouse mirrors - which may or may not resemble the original.

A little bit more
The governor's executive budget recommendation is headlined by a modest increase in per-pupil funding. Districts at the current minimum level of $7,391 - which includes some 60% of all students - would receive $120 more per pupil for their general operating needs. Districts at or above the state maximum (currently $778 higher or $8,169) would get an increase of $60 per pupil.

For most students, then, that means a funding increase of 1.6% - just a tad more than the projected inflation rate of 1.2%. But a goodly number of students will get a smaller relative increase: 0.7% or less, lagging inflation.

School Aid Budget - policymaking as theater

The last of three budget proposals for next year was presented in Lansing yesterday. On Wednesday, the Senate appropriations subcommittee on school aid endorsed its chairman's budget proposal, just as the corresponding House committee had done the day before. These two proposals join Gov. Snyder's proposed budget, offered in February. Now we enter the second act.

As is so often the case, the public portion of these proceedings resembles theater more than open discussion. The Governor proposes his budget with much fanfare to a joint meeting of the legislative appropriations committees. Then the subcommittees begin their work, going through the motions of asking invited guests to proffer advice. But during this time, backroom negotiations ensue, out of the pubic eye. This week, to get the budgets off their plates before the legislature's spring break, the subcommittees met again. The results of the backroom negotiations were rolled out, admired, subjected to some pro-forma criticism from the opposing party, and in due course approved and sent on their way to the full appropriations committees. All according to the script. The public was definitely NOT invited to participate. The outcome was never in doubt.

These competing proposals are really the opening offers in a game of political "Pit" which will also take place mostly out of the public eye. No one but well-heeled lobbyists are invited. But we end up living the consequences of the horse-trading we cannot see.

Time to stop using kids' schools as a cookie jar

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.

Our story, Part I: What really happened to school funding?

The election's over - can we talk reality now?

For a while, it was gratifying that school funding issues took center stage in the recent election for Michigan's governor. Unfortunately, the amount of spin and, well, dishonesty, left the situation more confusing than before. Now that the election is over, our choices about school funding need to be based on facts, not confusion.

Here are three basic facts that everyone needs to understand. The evidence for them is indisputable:

  • Starting with the 2012 fiscal year, the Governor and Legislature together took away roughly $1 billion that would normally have gone to K-12 education.
  • Schools took a major cut that first year, but they didn't have to: the tax cuts that year made the school cuts necessary.
  • The slow growth in school funding since that first year had nothing to do with the Governor or Legislature or any decisions they made. It was all automatic.

"Come again?" you might say. That's not what we were hearing from all the campaign commercials. But it's the reality we need to come to terms with. So let's go over it in a little more detail. (Go to article >>>)

Action alert: backroom budget negotiations

Now that the state budget process is in its final stages, a final School Aid budget is only days away. There will be very little time to discuss it once it's made public, so it's important for parents to weigh in now.

Contact your state lawmakers today!

While we don't know what the proposal will look like, we do have the different versions proposed by the Governor and passed by the House and Senate. What we find there does not make us very optimistic.

  • Virtually all the Governor's advertised "$150 million" increase in student funding comes from money that will be left over from this year because there were fewer students than expected. This is true of the other versions, also.
  • Under the Senate and House plans, charter schools receive significantly larger increases, on average, than local school districts. In fact, the Senate plan would give charters almost $100 per pupil more on average.
  • Under the Senate plan, 340,000 students, including 110,000 living in poverty, would get the lowest possible increases in funding.
  • Most districts would fail to keep up with inflation under any of these plans. The Senate plan is again the most extreme: over half a million students (almost half of them living in poverty) would not have their funding keep up with inflation.

To top it all off, predictions for revenues next year are lower than they were when these plans were written. That can't be good news.

>>>>Click below to read more!

School aid budget in pictures

What they're looking at in the smoke filled rooms

Now that the state's top economists have painted a somewhat less flush picture for next year, Legislative leaders are sitting down and hammering out final budget numbers. You won't get to watch - this is all happening in the proverbial "smoke-filled rooms" where the key players wheel and deal. So what are we likely to get? Our earlier articles outline the Governor's proposed school aid budget, and each house passed their own version. On the surface, the Governor's appeared to be the least generous, while the Senate trumpeted per pupil increases of up to $300 per pupil. But is everything as it seems? The fact that all three proposals spend nearly identical amounts of money should be our clue that the devil is in the details.

In our presentation on school funding to the State Board of Education (see upcoming article), we argued that legitimate school funding models would need to:

  • be fair, or equitable, to all participants (though that doesn't necessarily mean equal),
  • provide adequate resources for schools to do what we ask of them, and
  • put resources where they were most needed.

How do the budget proposals do on these scores? Not so well. A picture is worth a thousand words.

Budget brief: Waiting for CREC

The state's top economists will present their unified projections for state tax revenue tomorrow. This is the number which the legislature must use to create a balanced budget that meets the requirements of our state constitution.

However, over the last two days, the House and Senate Fiscal Agencies - nonpartisan staff working for the Legislature, who comprise two of the three agencies meeting tomorrow - have each released their projections for tax revenue for the current year (ending in September) and the next fiscal year (October 2014 - September 2015).

The future is looking less rosy.

First look: Snyder election year budget

At first glance, there are a number of things to like about Gov. Snyder's budget proposal in this election year - which is hardly surprising, since he launched his reelection campaign at the same time he released his budget. Several of those things even stand up to closer scrutiny. But all this is against a background of real austerity in K-12 education, so that the executive budget proposal is a bit like having the vise around your head loosened after a long period of tightening: it's a relief, but you are still in the vise.

Highlights

  • Districts will get a per-pupil increase between $83 and $111 per pupil, but this still lags inflation.
  • Most of that increase is made possible by the fact that there are fewer students in Michigan schools this year than originally expected, and the same applies next year.
  • The biggest increases are in the payments for unfunded liability of the state pension system.
  • Per-pupil funding left after pension payments are covered has fallen 22% over the last 12 years, after inflation.
  • Economic recovery is bringing a modest increase in revenues earmarked for the School Aid Fund, but no new revenue sources are being made available to schools.
  • Even though the state's General Fund is projected to have a much larger increase in revenue, the School Aid Fund continues to pay for some $400 million in higher education costs that used to be covered entirely by the General Fund.
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Who has "fact issues"?

Gov. Rick Snyder claims that that he and his administration have been investing in kids, that there has been “no reduction” in state support for K-12 education.

He says that “it’s not about partisanship, let’s just do the right thing.” We agree with those sentiments: support for strong, community-governed public education should not be a partisan issue, and we should definitely “do the right thing.” We’re still waiting for the governor to propose, and the legislature to pass, a budget that does right by the children of Michigan.

Gov. Snyder then goes on to say that people who argue he’s been cutting K-12 education “have fact issues.” But it is the governor’s facts which need a second look.

Bottom line: Gov. Snyder’s budgets took advantage of the depth of the recession to dig the hole even deeper in the first year to accomplish business tax cuts and other changes, allowing the weak recovery in subsequent years to look much better by comparison – but only if you ignore what things were like before or what things might have been like today had different choices been made. Between the end of earmarked school aid revenue from the Michigan Business Tax, and the diversion of funds to pay for colleges and universities, K-12 schools lost over $1.1 billion, or nearly $740 per pupil, each year because of the changes Gov. Snyder pushed through in 2011.

Budget update: Legislature tosses schools a small bone

The Michigan State Legislature approved a final compromise education budget last week, making use of an estimated $140 million in unexpected estimated revenue to make sure that no district saw a net cut per pupil. But despite some of the large numbers being tossed around, the real effect on most students will be almost invisible.

Even after the infusion of an additional $140 million into the school aid budget, school districts will only see very small per-pupil funding increases – that fail to keep up with projected inflation – rather than the cuts previously in the budget. Gov. Snyder’s requested $65 million increase in state-funded preschool programs did receive full funding, however, and some other targeted funding slated for cuts was restored or cut by a lesser amount.

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