Your Legislative Committee has a list of concerns about the funding of public education, but before we can share those concerns, we need to review some basic terms that define the funding of public education currently so that we are all on equal footing as changes occur.
First, I want to give a little history of where we have come from. Before the mid-1990’s, Michigan funded schools using local property taxes. Everything was decided on the local level then. Michigan was prosperous at the time. Even with periodic recessions, Michigan’s economy was healthy overall. As the years went by, however, property taxes became burdensome. There was also a significant disparity between wealthy districts and poor districts on the amount that was spent to educate children. All of this had become uncomfortable but nothing changed until a crisis occurred. Kalkaska schools closed their doors early due to a lack of funds. This was the wake up call that was needed to implement change.
Change came in the form of Proposal A which was passed by voters in 1994 and implemented the next school year. K-12 school funding was taken out of the hands of local authorities and given to the state. This is why the state budget crises affect schools so much. Each district, with a few exceptions, now receives roughly the same amount of money per student to educate them. The money received from the State of Michigan is called The Foundation Grant. This money came from an expansion of the sales tax by 2% as well as a list of other small taxes, including the lottery, real estate transfer taxes and some sin taxes. This pot of taxes or revenue is called The School Aid Fund which is supposed to be dedicated to K-12 school funding.
Once the Foundation Grant is received by the school district, restrictions are made on the district as to how the dollars can be spent, under Proposal A. These funds can only be used for teacher salaries, benefits and classroom materials. No other monies can be used for these expenses which are called Operational Expenses. EGRPS’s Operational Expenses are 85% of our budget. Local school boards can ask the voters for bonds, such as the Athletic Bond to pay for new buildings or athletic facilities and for sinking fund money to cover maintenance expenses. We also receive some money from the federal government for special populations, such as special education. These monies are called Title funds.
One thing to keep in mind as we discuss the School Aid Fund and the Foundation Grant is that the federal stimulus and Edujobs money have been propping them up. We are receiving federal dollars this school year and will be using the last of the federal dollars next school year and then they will be done. Those missing federal dollars the following year will be a structural deficit which has to be dealt with.
So, with those basics, here are our current concerns.
1. Although the budget projections show that the School Aid Fund is well funded for this school year and next, we are concerned about that structural deficit for the following year.
2. At the end of last school year, $200 million in the School Aid Fund which had not been anticipated was moved out of the School Aid Fund to pay for Community Colleges. While this is a noble cause, under Proposal A, no funds are to be moved out of the School Aid Fund. Now that this precedent is set, the School Aid Fund will look pretty attractive to politicians who are trying to balance a $1.8 trillion deficit in the rest of the budget.
3. Governor Snyder reported in his State of the State address that he plans to close the structural deficits all over the state budget. While we applaud this, we would like to know how K-12 will be affected.
4. Governor Snyder mentioned in his State of the State address that he values education from early childhood through adulthood. This is great from an education advocate’s point of view, but what does this mean for the School Aid Fund? How are K-12 schools going to compete with community colleges or universities for funding?
If any of this interests you, please follow the blog from your PTA pages. I also encourage you to check out Grassroots which is a parent and educator education advocacy group which meets monthly during the school year. The next meeting is Thursday, February 17, 2011 at 7pm at the KISD building at Knapp and the East Beltline. The Legislative Committee will keep you posted.