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What's up with road funding and schools?

Why will funding roads take money from schools?
So, what's up with roads and schools?
Dear Friends,

First off, let me thank the hundreds of you who have already contacted your State Representatives about road funding and the threat to our schools. Your message is important and is getting through.

Many people have asked for a bit more information about this whole deal - and I certainly understand, because it's somewhat complicated. I'm reprinting our earlier action alert below, but let me sketch out what is happening on this issue:

The Governor wants to find $1.2 billion to repair state roads. The Legislature would like to do this for the Governor, but a majority of legislators have signed "no new taxes" pledges to help them get elected. Since the state doesn't have $1.2 billion sitting around, that means finding new revenue. So, what to do?

Our lawmakers have been very clever - or sneaky, depending on your point of view. Right now, there are two kinds of taxes on fuel: "specific" taxes, like excise taxes, and the regular sales tax. The "specific" taxes on fuel are already legally earmarked for transportation, but they don't bring in enough money to fund the Governor's program. The regular sales tax on gasoline and diesel fuel brings in some $1 billion, but that mostly goes to schools, with the rest going to local governments and the state general fund.

So, to find money for roads, lawmakers are trying to have their cake and eat it too: they want to increase the "specific" taxes on fuel that are legally earmarked for transportation so they generate the money the Governor wants. Then, they want to eliminate the sales tax on fuel, so that they can say they didn't raise taxes. Isn't that special?

Where does this leave schools, which stand to lose some $750 million out of the deal (almost $500 per student)? Well, they're "working on it." Discussions have been going on for months about how to "replace" the revenue to schools and local government. So far, there are only some ideas floating around and no agreement on anything. The idea that seems to come up most often is to increase the sales tax from 6% to 7%, hopefully making up the difference to schools. Sounds good, right?

We have some real problems with this "arrangement":
  1. Increasing the sales tax would require a vote of all the people to amend the state Constitution. The earliest this could take place is November, and even then, no one knows for sure that it would pass. (We just voted down a whole passel of proposed amendments last fall, remember?)
  2. One of the problems school funding has faced is that the sales tax, which right now covers retail goods, is not keeping up with growth in the economy even in good times. This proposal would require a huge effort to pass an amendment that would not solve this problem.
  3. The current sales tax falls hardest on families with limited incomes. Instead of finding a more fair way to fund our schools, this proposal would make things harder for these families.
  4. Finally, lawmakers want to move these bills that change fuel taxes NOW, even though we would not know until November whether schools would get replacement funding!
This is nonsense, plain and simple. This whole exercise is simply to allow our state "leaders" to push responsibility for finding new revenue off onto the people. If we want to invest in our roads, we need to find a sensible way to fund that and not put our schools at risk. If we are going to change school funding, we need to address the fact that current funding levels simply are not adequate to deliver an excellent education to all our children.

If you'd like to know more about these bills, you can read the non-partisan House Fiscal Agency analyses here and here. For a review of transportation funding and spending, read this for lots of detail.

Thanks for taking action to protect our public schools.

Steven Norton
Executive Director
Michigan Parents for Schools

The games are getting sneakier

Remember the legislative version of "Let's Make A Lousy Deal" for school funding? You know, the one where no matter which door you pick, your kids and your schools lose?

Now get ready for the sequel: it's called "Lets Make It Worse"

This is all part of our legislature's effort to pull a rabbit out of a hat: they want to fund Gov. Snyder's $1.2 billion road repair plan, but not raise taxes to do it. But that's nothing that a little smoke and mirrors can't fix.

The solution? Increase targeted taxes on fuel that are legally earmarked for transportation, but then exempt fuel from the 6% sales tax. Neat, huh?

Oh, but then there's this pesky little detail - most of the sales tax goes to fund schools. But none of the new taxes would.

Two bills before the House Transportation committee would remove the sales tax on fuel: HB 4539 would accomplish this for gasoline and diesel fuel, while HB 4572 - expected to come up for a vote this week - would do the same for aviation fuel.

Now, everyone likes decent roads. That's not the issue.

The problem is that they're planning to pave state roads with what should be our children's future.

Analysts estimate that dropping the sales tax on vehicle fuel would cost the School Aid Fund at least $750 million each year. That's going to cost our schools close to $500 per pupil.

They can't even estimate what the aviation fuel change would cost schools, but I guess that doesn't worry the bill sponsors.

Legislators backing this plan should be ashamed. They're sticking a knife in the back of our schools, and hurting our children, but smiling all the while. This isn't leadership, it's simple cowardice.

How about this: try being honest with the people of Michigan. If we want good schools, we have to pay for them. If we want decent roads, we need to pay for them, too. But don't take it out of our kids' future.
Steven Norton
Executive Director
Michigan Parents for Schools
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