Paying for Michigan Schools: More money for schools?

Aug 13, 2010

The way we pay for schools changed a lot back in 1994 when voters passed Proposal A. Before Proposal A, much of the support for the schools came from local property taxes. But voters passed increase after increase and in some districts property taxes got so high that people, especially senior citizens, couldn't afford to live in their homes. Michigan had some of the highest property taxes in the nation.

The legislature and Govenror Engler shifted much of that tax burden away from property taxes and later voters approved Proposal A, increasing the sales tax and other taxes to make up for it.

Today, all or parts of twenty different taxes and proceeds from the lottery go to support schools.

Proposal A also made sure schools were funded more equitably. Before Proposal A the richest schools were spending three times as much money on students as the poorest schools could. Poorer districts are now given more money. It's not equal, but the gap has narrowed.

It all worked pretty well until Michigan hit the worst economic downturn since the Great Depression.

Chuck Pelham is the superintendent at Britton-Macon schools. Pelham's grandfather was a schools superintendent and his father was a superintendent.

"And I remember my Dad saying, This Proposal A is going to bite you someday.' And he said, As long as the economy is healthy, Proposal A will help schools. As soon as the economy takes a downturn, it's going to bury you.' And that's what happened. Now we're buried," Pelham said.

Some educators say Proposal A was never more than a stop-gap measure, a temporary fix. One of the people involved in designing Proposal A says that's just not true. Doug Roberts was Treasurer under Governor Engler and is considered by some to be one of the architects of Proposal A.

"It wasn't a stop-gap. It was meant to be exactly what it was: a fairer way of dealing with schools. And in my opinion, the way we fund schools is fairer than yesterday and will be fairer tomorrow simply because the way we redistribute the funds," Roberts said.

And Roberts says the fact that schools are not getting as much money right now is simply a reflection of the state's economy. We're all hurting.

But many educators say schools should be better protected from the ups and downs of the economy. Kids should expect and get a top notch education regardless.

Brad Biladeau is with the Michigan Association of School Administrators. He says if not a complete overhaul of the tax structure, at the very least we need to broaden tax support for schools.

"As our tax base continues to change, we may want to look for a more stable revenue source. There are various groups across the state that are looking towards expanding the sales tax towards services because our state is becoming a more service-based state. I think those are realistic goals and something that we need to look at long-term," Biladeau said.

And the state's top educator, Michael Flanagan, supports that idea.

"I do think things like a sales tax on services would help schools and should be dedicated to schools and I'm a big proponent of that as State Superintendent."

Now, taxes for schools were broadened a bit when Michigan changed its business taxes a couple of years ago. But, that's not prevented a stall and cuts in state support for schools. And so more and more people are floating the idea of an expanded sales tax on services because economic growth is in the service sector.

Former Treasurer Doug Roberts thinks Michigan taxes could change a bit to reflect the changes in the state's economic base just not all at once. Instead of a sales tax on all services, maybe just on recreational services.

"Regrettably, the last time the legislature and again then repealed it almost within two days, they had a tax on bowling, but no tax on golf. I mean, that makes absolutely no sense. So, I mean, I think if you had an across the board, honest sales tax on recreational services, I certainly think that would be something that could be supported," Roberts said.

But certainly not supported by everyone. Bob LaBrant at the Michigan Chamber of Commerce says schools should concentrate on cutting costs. More taxes are not necessary. Michael VanBeek at the conservative think tank the Mackinac Center for Public Policy says more taxes for schools is just not appropriate in this economy.

"School groups are calling for more taxes and more revenue into the school system when compared to our relative to our state wealth, we are contributing a significant amount," VanBeek said.

Educators say this struggle over whether to fund education well or fund education just good enough', whether to pay teachers well or expect them to take cuts in benefits and pay, should be at the heart of a discussion we should have in this state.

But for right now the state legislature isn't really interested in making any drastic changes.

"I believe that though it's difficult, I think that they can make it on what they're getting right now," said Republican Senator Ron Jelinek, head of the Senate subcommittee on K-12 School Aid and Education. He says the legislature has protected education from the kinds of cuts other government services have endured, and there's no way the legislature is going to levy more taxes on an already struggling economy, especially in an election year.

"Nobody is going to go around bragging that they just raised your taxes, please, vote for me. The problem is this economy is slow in Michigan and you can't fix it by raising taxes. You can't say Well, I know you don't have a job, but I need more money out of your pocket.' This is just not the climate or the time to do that," Jelinek said.

Educators say without more stable funding for schools, it will mean more staff layoffs and more cuts to classrooms. They note the Census Bureau reported for the first time Michigan recently dropped below the national average for spending per pupil.

Kathy Hayes is the Executive Director of the Michigan Association of School Boards. She says as schools start to cut more staff and more programs, voters will get behind the idea of changing how we pay for schools.

"It's going to take the public understanding the need for this and them getting angry enough and concerned enough to really talk to the legislature, to address the legislature because they've (legislators) heard from us. They know where we stand on this and it hasn't really done a whole lot of good. I think it's when they know that the public out there says Wait a minute, I'm willing to pay the taxes that are necessary in order to have a stable funding system for education," Hayes said.

But lawmakers in Lansing are not hearing that from their constituents, at least not yet. Right now they're hearing from business people who want help and from people out of work, not a groundswell of parents and taxpayers who are willing to pay more taxes to support their schools.

RELATED LINKS:
Grand Rapids Press story on Michigan Board of Education calling for more taxes for schools
Ballotpedia entry on Michigan Service Tax
About.com on service tax history