The $165 per pupil cut is now state law. Granholm drops unexpected hammer on GP Schools with elimination of 20J funds. Detroit News takes poorly researched position on Sinking Fund ballot question.
Amidst all the drama surrounding the various state budget bills, the House and Senate approved a School Aid Act bill that cut funding by $165 per pupil. The Grosse Pointe Public School System has roughly 8,400 students so this cut amounts to a loss of roughly $1,400,000 in annual revenue. (See previous post for details on Michigan budgets and school funding.)
Last night Governor Granholm signed this bill into law. Many districts were clamoring for Granholm to take action so the state aid payments to public schools would not be delayed any longer. Well, the good news is she signed it. The bad news, for Grosse Pointe Schools and about 40 other districts like us, is that Granholm exercised her right of a line item veto on Section 20J funds.
20J funds allows districts to receive their full and fair share of the Foundation Allowance established as part of Proposal A. 20J is not “pork” for school districts. We are rightfully owed that money. For Grosse Pointe, 20J funds amount to $198 per pupil. So Granholm’s line item veto is an even harsher cut to school aid than the $165 per pupil cut. In total, Grosse Pointe has now officially lost $363 per pupil or $3,000,000 in total revenue. That in-year shortfall does not even comprehend the organic shortfalls we can expect to experience from rising human resources costs.
No one anticipated this additional reduction by Granholm, a move that smacks of political gamesmanship where the local districts and their students are the pawns. In case you did not realize, in their infinite wisdom state lawmakers require school districts to adopt their budgets by the end of June, but the state itself is not required to do the same until the end of September – a task that even they could not complete. With absolutely no guidance on these cuts from state lawmakers at the time of local district budget development, this last second move by Granholm may be legal, but an abject failure in leadership.
But wait! There’s (unfortunately) more…
If you read Granholm’s press release she makes it clear that “if the Legislature fails to secure the revenues needed to fully fund the budget that has passed, state law requires a proration of payments to school districts beyond the $165 per pupil mid-year reduction.” How many would take bets as to whether the legislature will enact new revenue measures quickly enough (or even ever) to avoid further mid-year cuts? Not me. This is going to get worse.
Yet even further, a Detroit News editorial today encouraged voters in the
Grosse Pointe Public School System to reject the Sinking Fund millage on the basis of calling it a tax increase of 0.0262 mills (or the equivalent of less than 3 cents per $1,000 of taxable value.) The basis of the claim is that originally taxpayers approved a 1 mill Sinking Fund. Over the course of 5 years, the state’s Headlee Amendment reduced that rate by the above mentioned 0.0262 mills. (Here’s a good piece Huron Valley Schools developed on this issue.) So this is a semantic claim by the News since voters actually approved 1 mill before and that is all we are asking for now.
The Detroit News further marginalizes the request by calling out as frivolous certain projects which have been targeted for completion if the Sinking Fund is approved – one of them being what they call “playground improvements.” This is NOT the addition of new swings at playgrounds, but moving the playground at Poupard Elementary from the front of the building, which inconveniently runs along the I-94 service drive, to the back of the building. It is simply unsafe to have that playground there. There have been instances of high speed chases in front of the school, but in the interest of “saving” 3 cents per $1,000 of taxable value, the Detroit News encourages us to reject the measure thus jeopardizing plans that allow us to maintain our historic buildings that are, on average, 68 years old and that could actually save the lives of our students. Nice logic, Detroit News.
Would the News further argue for us to fund such projects out of the General Fund? Probably – the same General Fund that has now officially been reduced by $3,000,000 (and adding other human resources cost increases yielding a projected shortfall of $7 to $8 million). The loss of the Sinking Fund would bump that number up at least another $2 million. My advice to those who agree with the Detroit News’ logic is this: Be careful what you wish for because I can guarantee you won’t like the cuts that will result.
What the Detroit News further fails to take into account is that taxable values are already decreasing. The odds are very good that the same 1 mill levy will naturally reduce tax payments as a result. (Tax payments are the function of millage rate applied against taxable value.) This was a very poorly researched position by the Detroit News and I encourage voters to dig deeper than they have.
The state’s economic correction we have been anticipating is underway. The form these corrections take on the local level, as I have been saying for my 4+ years on the Board, will be painful. I believe as a district we stand ready to make some tough decisions, but I only ask that voters take all of these factors into consideration on November 3rd.