February 15, 2013 at 3:56 pm
Michigan's school aid increase may actually leave districts with less
Proposed 2% hike for education going mostly for pensions, preschool classes
Lansing — A proposed 2-percent increase in public education spending next year could in reality leave many school districts with less money than they're getting this year.
Just a fraction of the extra $227 million Gov. Rick Snyder included in his proposed budget will end up in K-12 grade classrooms. And an extra $34 per student equity payment the governor proposes making to the state's lowest-funded schools is not guaranteed to continue in future years, according to the budget plan.
Instead, the governor proposes using most of the money to cover rising employee retirement costs for districts and to expand a public preschool program for low-income children.
Nearly 300 of Michigan's 549 school districts and 277 charter schools that meet Snyder's "best practices" management criteria could see a net reduction of between $2 and $36 per pupil, depending on their state funding, a Detroit News analysis shows.
"The actual dollars districts have to spend are less next year than this year," said David Martell, executive director of the Michigan School Business Officials group.
"The state's certainly spinning a real positive message with the 2 percent (figure)."
School leaders say Snyder's 2-percent increase proclamation misled them, teachers and taxpayers.
"The headline says one thing and the reality is clearly another — and then the board and the administration deal with the aftermath," said Don Wotruba, deputy director of the Michigan Association of School Boards. "He's not the first governor to do it."
Snyder is proposing lawmakers slashing the pool of "best practices" money districts can tap into for up to $52 per student to $25 million next year from $80 million. That would be on top of $6,966-per-pupil minimum state funding allowance.
Snyder's first budget in 2011-12 initially made $152 million available. But after getting school districts to privatize services, offer open enrollment and post financial and academic data online, the governor wants to eliminate the funding in the 2014-15 school year.
The administration warned schools not to depend on the grants, state budget director John Nixon said.
"It was very clear it was one-time (funding) and we presented it as one time," Nixon told The News. "We said it until we were blue in the face."
Critics say the governor is stringing districts along with a carrot-and-stick approach to funding that doesn't help them meet rising utility, health care and personnel costs.
"It totally undercuts a school district's ability to plan," said David Hecker, president of the American Federation of Teachers Michigan.
Funding formula criticized
While Snyder is giving the lowest-funded schools a one-year $34-per-student raise, he is proposing a cut in the "best practices" grants by $36 per pupil, resulting in a net loss of $2 per student for classroom expenses.
Schools receiving more than the $7,000 annual per-pupil state funding will be getting no base funding increase under Snyder's plan and could lose the $36-per-pupil grant if they participated in the best practices program, and even more if they fail to continue meeting the criteria.
Hartland Consolidated Schools in Livingston County is one of the nearly 450 districts that receives the minimum $6,966-per-pupil allowance and will qualify for the $7,000 per-student annual base funding next year. But the gain will be eroded by the loss of $36 per student for meeting the state's "best practices" criteria, said Scott Bacon, assistant superintendent for business and operations of the 5,500-student district.
"All I can pick out is plus $34 and minus $36, which is clearly not a 2 percent increase," Bacon said. "It's an actual loss of $2 per pupil."
Under Snyder's proposed budget, Hartland's "best practices" grant could fall from about $286,000 this year to $88,000 next year.
Approximately 275 school districts and charter schools have qualified for the best practices grants this year, according to Department of Education data.
Schools receiving less than $7,000 that did not participate in the "best practices" program would be the only districts to see a net $34 per pupil increase in funding, Martell said.
"It's kind of a perverse funding formula," said state Rep. Brandon Dillon, D-Grand Rapids. "It's going to reward schools who didn't do the best practices this year and punish the districts that did go along with the strings attached."
Nixon counters school districts are getting the equivalent of $250 more per child next year through the state covering a $403.3 million increase in employee retirement costs.
Instead of putting the extra $250 per pupil into the district's base funding, the state is covering the costs for rising pension and retiree health care costs in the Michigan Public School Employees Retirement System, Nixon said.
Under retirement system reforms the Legislature adopted last year, Nixon said, the state has locked in retirement contribution rates for school districts at 24.5 percent of salary to stop the pension system from "suffocating" classroom spending.
"They would have had to just return that payment to the state in lieu of a MPSERS payment," Nixon said.
'Investors in kids'
Although they're thankful for the Legislature's retirement system reforms, school leaders contend the Snyder administration's recent investments in K-12 education don't make up for the $300 per student — or $466 million — the governor and Legislature slashed from classroom spending in 2011.
"Even if it was a true 2 percent across-the-board increase … it can't be talked about out of the context of the $1 billion cut two years ago," Hecker said.
Lawmakers restored $120 per student this school year, but the minimum funding remains at about 2006 levels.
Since taking office in 2011, Snyder has sought to make education funding more results-oriented and reward school districts for certain management behaviors and academic achievement.
Snyder's proposed budget also calls for $65 million more to enroll 16,000 4-year-olds in free preschool next year and increase half-day allotments to districts from $3,400 per kid to $3,625. He also proposes keeping a $30 million pot of money available for schools to earn up to $100 per student for showing rising test scores.
"We've been investors in kids," Snyder said during his Feb. 7 budget presentation to lawmakers.
"We're doing it through different ways than have been done in the past, not just through (the) foundation allowance. I don't believe that's the best answer."
From The Detroit News: http://www.detroitnews.com/article/20130215/POLITICS02/302150359#ixzz2LM7uboAl
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