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State budget & taxes

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

Sinking fund bill passes House

*After some floor dramatics last week, the state House succeeded in passing HB 4313, which expands what school districts can purchase with sinking funds.* Opponents of the bill, mostly Republicans, argued to no avail that it would constitute an increase in property tax rates that required a super-majority vote in both houses. Other attempts to amend the bill at the last minute also failed. Even so, the legislation passed on a 74-35 vote, with eleven Republicans voting in favor while three Democrats voted against the bill. The bill now heads to the Senate, which allowed similar legislation to die at the end of last session.

Time to leave the "State of Denial"

*This Friday (9 January), the state's top economists will meet, as required by law, and project how much tax revenue Michigan will gather this fiscal year. That's when we find out how bad things are.* If, as most observers suspect, they estimate that revenues will be less than expected, the governor is required by law to propose spending cuts _for the current year_ to bring the budget into balance - unless the Legislature can find a way to plug the hole. This process includes K-12 school funding; the vast majority of the money to operate Michigan's schools comes from the state School Aid Fund and is supported by state-wide taxes. This is not the first time our schools have gone through this ringer, but maybe it should be the last?

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.

"Brother, can you spare a dime?"

Here at MIPFS, we have always argued that private giving to our public schools can be an important way for communities to take back the destiny of their school systems. But we also insist that private giving cannot, and should not, replace our common responsibility to see to the education of our communities' children. Evidently some of our state legislators do not quite agree.

Back to our regular impasse

*Legislators head towards budget compromise, but no new thinking in sight.* Most parts of the State budget for next fiscal year are in the final stages of negotiations, as House/Senate conference committees meet this week to hammer out versions acceptable to the Democratic House and the Republican Senate. The school aid budget bill (SB 1107), which supports K-12 education, is part of this process. The good news is that, despite the continued slide of Michigan's economy, lawmakers will probably not have to cut school funding for the current year, which they avoided last year only after some creative accounting. The bad news is that revenues earmarked for schools will be even lower next year than projected in January, making any attempt to simply keep up with inflation impossible. State government's main budget, the general fund, is in even worse shape, ruling out help from that direction as well.

School Aid Budget: Heavy Weather

The morning after

*In the early hours of Monday morning, our lawmakers prevented a state government shutdown with a deal that left both sides bloody. However, all it bought us was time: a final agreement on the state budget remains to be sealed.*

Today's action message

Dear Friends,

As I'm sure you know, time is running out for a budget deal in Lansing. The new fiscal year starts tonight at midnight, and the Governor has already made plans for a government shutdown.

So the pressure is on, as it should be. But sometimes, during protracted late-night negotiations where everyone is playing "let's make a deal," people can lose sight of what's really important. Let's remind them!


Four more days

*When efforts to broker budget compromises on the floors of the House and Senate failed, our lawmakers essentially punted: the two houses sent gutted, but still incompatible, versions of an income tax bill to conference committee, where a handful of lawmakers will get to try again.*

Update: Revenue stalemate in House

*The state House remained deadlocked this morning on revenue measures intended to plug the $1.7 billion hole in the state budget, including the school aid fund.* House Speaker Andy Dillon had warned members to "bring their sleeping bags."


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