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It's September 10th: do you know where your school's funding is?

*Our lawmakers are once again at a crossroads, figuring out how to manage the tremendous decline in revenues for public services, including schools. Time is running out.*

Constant readers will notice the shortage of news on the state K-12 education budget in recent months. There is a good reason: there hasn't been any.

State lawmakers have been meeting behind closed doors since mid-summer, trying to hammer out a compromise agreement on the broad "targets" for the state budget. In general, this means setting the "big picture" numbers for revenue and spending, including how much to cut and how to cover any remaining shortfall. This includes the School Aid Fund, which provides about three-quarters of the money spent state-wide to operate schools.

The state's fiscal year ends September 30th, and the deadline is looming. The last news from Lansing was the Senate's vote to "approve a school aid budget that cuts funding by $110 per pupil,":http://www.miparentsforschools.org/node/116 or $413 million for the 2009-10 school year. And no, that is not a typo: Michigan communities do not yet know how much money they will have to operate their schools for the school year *that has already begun*. School districts are required by law to pass their budgets by June 30th of each year, but the Legislature rarely has a school aid budget ready before July. In difficult years, such as this one and most recently in 2007, budget wrangling can continue to the last minute and beyond. (In 2007, struggles over increasing the income tax and adjustments in the Michigan Business Tax to prevent cuts to schools and other programs "pushed final approval of the budget to after midnight on Halloween.":http://www.miparentsforschools.org/node/91 The Legislature essentially stopped the clock to pretend that they did not have to shut down government for a few hours.)

*Reading Tea Leaves 101*
This means that school districts had to prepare their budget based on projections. Many presumed that state funding would remain flat thanks to the Federal stimulus support available to protect K-12 education spending. Even the Senate vote came after most districts had approved their plans. Now, as lawmakers in Lansing debate how much to cut and what steps might be taken to increase revenue, school officials are preparing to deal with whatever comes, as best they can. Some expenses can be trimmed mid-stream, and other shortfalls can be covered by a district's fund equity (its "savings"), if it has any. A substantial number of districts will be driven into deficit with cuts this year, requiring state intervention and mandated program cuts.

Revenue news continues to be bad, indicating that the Federal stimulus dollars will be used up much faster than planned - in one and one-half years, rather than three. Much has already been used to plug the gap for the school year just past, and the money is expected to run out this year. Without a dramatic turnaround in Michigan's economy, or changes to how we fund schools, the 2010-11 school year is expected to see truly heartbreaking cuts to schools.

*Share the pain*
Two bills just introduced in the state House are aimed at changing how state school aid cuts, called "prorations," are calculated. "HB 5321":http://legislature.mi.gov/doc.aspx?2009-HB-5321 and "HB 5322":http://legislature.mi.gov/doc.aspx?2009-HB-5322 would make any cuts to per-pupil funding - mid year or budgeted - proportional to a district's current spending allowance. At present, if a reduction is made, the same dollar amount is deducted from each district's allowance; these changes would mean that higher-spending districts would see larger dollar cuts because each district's allowance would be cut by the same percentage.

This sounds reasonable, and it probably is. However, it is worth remembering that for most of the time since 1994, lower-spending districts have received as much as twice the spending increase as those that were already spending more. (A district's allowance was based on how much was being spent per pupil in 1993, and then adjusted by formula changes since then passed each year by the Legislature.) From 1994 to 2001, districts spending below the "basic" amount were given double any increase. Since 2007, districts were given increases (if any) that ranged from the minimum - for the higher-spending districts - to twice that for districts at the low end of the range. In other words, higher-spending districts got increases (if any) that were a much smaller percentage of their allowance than lower spending districts received. This system has significantly narrowed, though certainly not closed, the gap between the highest and lowest spending districts. Of course, different parts of the state have different operating costs as well, explaining some of the gap.

But as a result of this system, districts at or above the original "basic" barely kept pace with inflation over the last 15 years. The higher the spending level, the farther behind inflation funding for those districts has fallen. At the same time, some our schools' biggest costs - health care for current employees and retirees - have been going up at many times the rate of inflation.

These bills would guarantee that higher-spending districts, which have been lagging inflation for years, would also shoulder a much larger dollar share of any budget cuts. While this may seem fair at some levels, it also helps to drive a wedge between districts and between regions of the state which might otherwise be uniting to fix the real problems in our state's system of school funding.

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