Michigan’s communities are engaged in a high stakes game, wrestling with the lethal combination of rising costs and falling revenues. Despite the urgency of the situation, a long-term view is critical for long-term health.
New reports surface daily chronicling how communities are responding to the financial trauma plaguing Michigan public schools. Here is a sampling of articles from Dearborn, Saugatuck/Portage, Wyoming, Wayne-Westland/Livonia, Bloomfield Hills, Allendale, Coopersville, Grand Haven, Hudsonville, West Ottawa, Spring Lake, Charlevoix, Grand Ledge, Hemlock/Saginaw/Chesaning, Escanaba, Fenton/Holly/Linden, Lansing, Utica, Northville, Three Rivers, East Jackson, Adrian, Muskegon, Detroit, Walled Lake, and Birmingham.
What’s the point? The list runs the gamut of the wealthiest districts to those that receive the lowest per pupil revenue. Some are very large and some are very small. Some are urban, some suburban, and some rural. Some were previously receiving section 20J funds and some never received them in the first place.
The point is that if you’re a school district in the state of Michigan you are certain to be experiencing financial distress. There are no exceptions.
Welcome to Michigan - a great state, but great times? Not so much.
The state’s financial health is the primary determinant of local school district funding. We were once a wealthy state, but the events of the past decade have rendered us a poor state. Yes, some districts could be charged with financial mismanagement, but only very few. The challenges facing local school districts have been brought about primarily by state level financial issues, not local ones.
Consider these Michigan tax revenue sobering factoids compiled by the House of Representatives Fiscal Agency:
- In actual dollars, general fund revenue has dropped from $9.79 billion in fiscal 2000 to $6.95 billion this year, a 32% reduction. In inflation-adjusted dollars, revenue is down nearly 43%.
- General fund revenue has fallen $2.4 billion in the past two fiscal years alone, a drop of nearly 27%.
- School Aid Fund revenue (the predominant source of per pupil funding) is nearly $1 billion lower than it was two years ago, a fall of about 9%. In inflation-adjusted dollars, net school aid fund revenue is down nearly 14% since fiscal 2000.
- General fund spending is at its lowest level since 1996 in actual dollars — and its lowest level since 1969 in inflation-adjusted dollars.
In the same breath that we acknowledge state issues and decisions are the source of most of the problems, we must also accept the need to respond locally. The problems are not of our doing yet they are real, serious, have long-term implications, and are now in our backyards.
Economic forecasters from Moody’s Economy.com said they do not expect Michigan to see another peak in its business cycle during their entire 30-year forecasting horizon. (Source: The Pew Centers’ “Beyond California: States in Fiscal Peril”
The excerpt from The Pew Study referenced above is critical to comprehend. We must analyze each budget decision as permanent because it will take decades for Michigan to recover from the revenue losses of the last ten years. This is why the phrase “the new normal” is so appropriate. Local school district responses to state level woes will define their service offerings for years to come.
Considering the importance of schools to the residents within the Grosse Pointe Public School System that “new normal” had better be more than just acceptable. It had better be able to delight the consumers of this public service. Use the high school day schedule as an example. Yes, the seven period day is a more expensive schedule, but is going to a six period day a decision we want to live with for the next couple of decades? Does going to a six period day address the root cause of our financial problems? If not, by the same logic, is the next step a five period day?
I receive a great deal of feedback from community members on these matters, which I always appreciate. But as is always the case, it will be difficult to agree on all of them. In my four plus years on the Board I have worked very hard to improve the process whereby we can make these evaluations in an organized and transparent fashion. I developed the document below to summarize the process and it was agreed upon by the full Board:
[scribd id=24373233 key=key-240nhpnvtu2ecn50ruum]
As we have followed this process and timeline we are now at the point where the Board will approve the guidelines we will require the administration to follow in their development of the budget. Our next Work Session (tentatively scheduled for Jan. 11th) will use the document below to guide that discussion. Each one of the items listed will be evaluated individually and then in the context of the whole. Each member of the Board will be asked to take a position on each of the items and the final product will serve as the official direction of the Board to the administration.
[scribd id=24316031 key=key-1whijtd9bme6g10196aj]
This is where the lens of the long-term view, the new normal, must be applied. I will be asking myself many questions before I reach my decisions, among them:
Is the outcome of this decision something I am prepared to accept as permanent for the Grosse Pointe Public School System?
Is the funding and/or staffing requirement supported by valid business and decision logic? Is the cut supported by the same?
Does this decision impact the root cause of recurring shortfalls or does it treat the symptom?
Is the function under review represent a service that is fundamental to the role of a public school system?
What alternatives exist if I don’t support this?
When it’s all said and done, as I have said for years, decisions will be made that will be unpopular. That’s just the way it’s going to be. But to end where we began – looking at all the districts across the state – the vast majority of them have flourished with less revenue than Grosse Pointe Public Schools. This is why I value benchmarking so much. It shows us precisely how other districts have done this.
There’s no reason GPPSS cannot flourish with less revenue than what we have had until now. As I testified before the State Board of Education, this is a lesson we can take away from the Proposal A experiment. It has demonstrated that per pupil revenue alone is not the primary determinant of success. If that were the case, it would have been reformed years ago.
It just so happens that I will publish this blog on the day of the Winter Solstice – a day with less sunshine than any other day of the year. The sun has not shone so brightly, figuratively, for the state of Michigan and its public schools as of late. But as I have written before, acknowledging and coming to grips with our reality, the new normal, is the first step towards recovery and a brighter future.