The state’s ongoing budget crunch continues to threaten the quality of education in Michigan. Across the state, school officials are preparing for a third consecutive year of cuts to the state per-pupil grant provided to local districts. Adding to school officials’ angst is the fact that no one is quite sure how much the budget will be cut, as the state’s method of school financing relies on unstable sources of funding, such as the sales tax. In order to fulfill its commitment to public schools, the state would do well to re-examine the current, unreliable system of school funding established after the passage of Proposal A 10 years ago.
The Senate Fiscal Agency is estimating a shortfall in the state’s School Aid Fund that would correlate to cuts of $30 to $60 per pupil. Last year’s cut was $74 per pupil, and some estimate this year’s cut could be as high as $150 per pupil. These budget cuts correspond to real cuts in educational services. The Detroit Public Schools, facing falling enrollment as well as falling state aid, may have to cut 4,000 jobs; in Wayne County, the Van Buren Public Schools may close Haggerty Elementary School. Because districts in affluent areas are able to spend more per student overall by raising money through local fundraising, uniform cuts to the per-pupil grant disproportionately harm poorer districts that rely more heavily on state funds.
If cuts in state funding are unavoidable, officials should adjust them to correspond to the needs of individual districts, so as not to further hurt struggling schools. Just as there are significant, detrimental effects of such continual budget cuts on higher education, there are similar effects on K-12 education. Rather than focusing on innovative ways to improve the education students receive, constant cuts leave school officials struggling to decide where they should cut so as to hurt students least. Weakening public education makes the state less attractive to both residents and businesses considering moving here. Cutting education funding is not a viable way to develop the highly educated workforce and encouraging the innovation and investment that state leaders say the state needs to compete in the 21st century.
School officials’ decisions regarding how to handle the budget cuts are made all the more difficult by the uncertainty over the size of the eventual cut. This is the legacy of Proposal A, which sought and to a certain degree succeeded in remedying inequalities in school funding between poor and affluent districts. The proposal shifted the source of school funding from local property taxes to other revenue sources, primarily an increased sales tax. The increase in the regressive state sales tax, which places a disproportionate burden on lower-income individuals, did indeed help reduce funding inequalities between districts, though it certainly did not eliminate the gap. It also reduced property taxes that were 30 percent above the national average at the time. Unfortunately, Proposal A sought to achieve greater funding equality by making the state’s tax system less equitable.
In addition to the regressive nature of the sales tax, it is also an irresponsible way to fund education. Sales tax revenues fall precipitously in times of economic downturn because of decreased consumer spending. Proposal A might have worked well while the economy was healthy, but its reliance on inherently unreliable sources of funding is threatening the state’s education system. In addition, the passage of Proposal 1, which will prevent the state lottery from introducing new games, is sure to reduce the massive funding stream the lottery provides to the state’s public schools.
Despite these rising concerns, The Ann Arbor News recently quoted a spokeswoman for Gov. Jennifer Granholm brushing off concern about budget cuts, saying “Education remains the governor’s top priority. All of this is speculation, and it’s way too soon to be speculating.” But after two consecutive years of education cuts, it is becoming difficult to dismiss worries over education funding as mere speculation.