Testimony on the Fiscal 2014 School Aid Executive Budget proposal
Prepared for House Appropriations subcommittee on School Aid, 19 February 2013
Drawing on the data we used in an earlier article about the Governor’s budget proposal – Eleven percent increase in schools since 2009-10? Not so much. – MIPFS testified before the Michigan House Appropriations Subcommittee on School Aid earlier this week. Our purpose was to point out that the executive budget proposal did not represent an increase in funding available for school operations, despite rhetoric to the contrary. Funding levels were actually much lower than in previous periods, especially after taking inflation into account, despite the smaller number of pupils.
MIPFS called for a significant, real investment in preschool through secondary education so that our public schools could do the job we have asked of them.
In his budget presentation to the State Legislature, Gov. Rick Snyder billed the education portion as making an investment in Michigan. He described increased spending on preschool – a good thing – and efforts to limit the costs of the public school employee pension system – the burden of which falls mostly on current and future retirees. But he also claimed that the state government had increased spending on K-12 education by 11% over the last four years, including his new proposal. He even had a slide to “illustrate” the point.
Now, with the Governor’s focus on being a “nerd,” and the budget materials all identifying him as a Certified Public Accountant as well as Governor, you might think that all these numbers pretty much reflect reality. But as we have learned over the last decade, to our cost, financial numbers can be “massaged” to tell different stories depending on the audience.
Gov. Snyder, CPA, was engaged in a litte bit of what they call “earnings management.” A closer look at K-12 spending shows a different, and more accurate, picture. We need to keep the true picture in mind as we discuss the performance of our public schools.
“Critics often say ‘the governor is trying to destroy public education as we know it,’ [Lansing attorney Richard] McLellan said. ‘That’s accurate.’”
Well, there it is. Doesn’t get much more “straight from the horse’s mouth” than coming from Lansing attorney and longtime political operative Richard McLellan. As a leader of the obscure Oxford Foundation, Mr. McLellan led the effort to devise a radically altered way of funding K-12 education for Gov. Snyder. He is also the author of the controversial Education Achievement Authority bill now in the legislature, as well as a proposal to dramatically increase the types of charter school that would receive public funding in Michigan. Some twelve years ago, he also spearheaded a constitutional amendment that would have permitted school vouchers in Michigan, which was defeated handily by the voters.
This radical package of proposals is in danger of being overlooked in the wake of today’s protests over a “right to work” bill and the use of pepper spray by police to subdue protesters visiting the Capitol to express their anger at that proposal.
UPDATE: 14 June. The state House of Representatives today passed a revised version of SB 1040, a bill that aims to restructure the public school employee retirement system. The changes in this compromise bill are less dramatic than those proposed in the Senate version, but they still represent a substantial change in retirement benefits for future employees and increased costs for current employees. While some financial pressure is being taken off local school districts, the added costs of the transition will still come out of the School Aid Fund. Absent other measures to increase revenues to the SAF, this bill will not remove the burden on the education budget in the near term.
However, the state Senate, which had approved a version forcing all new employees into a defined contribution plan, adjourned for their summer break today without voting on the bill. They resume session on 18 July.
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.
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.